Thursday, 4 July 2019

Ceisteanna (107, 108)

Michael McGrath

Ceist:

107. Deputy Michael McGrath asked the Minister for Finance the amount of dividend withholding tax paid by REITs here each year since REITs were established in Irish legislation; the amount of dividend withholding tax refunded to shareholders in each of these years; and if he will make a statement on the matter. [29021/19]

Amharc ar fhreagra

Michael McGrath

Ceist:

108. Deputy Michael McGrath asked the Minister for Finance the amount of dividend withholding tax paid by IREFs here each year since IREFs were established in Irish legislation; the amount of dividend withholding tax refunded to shareholders in each of these years; and if he will make a statement on the matter. [29022/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 107 and 108 together.

In relation to the Deputy's question on Real Estate Investment Trusts (REITs), the rules on REITs in Ireland are set out in Part 25A of the Taxes Consolidation Act 1997 and were introduced by Finance Act 2013. Irish REITs are collective investment vehicles which invest in Irish property. The income and gains from Irish property are not taxed within the REIT but are instead taxed in the hands of the investor when distributed. REITs must distribute at least 85% of their property profits and gains to shareholders each year. A REIT is subject to corporation tax on any income or gains arising from any other business (i.e. non-property business) that it carries on.

Dividend Withholding Tax (DWT) at 20% must be applied to all distributions from REITs, other than those distributed to certain limited classes of investors such as pensions and charities as they are more generally exempt from tax. I am advised by Revenue that the available information is the net DWT collected in respect of dividends paid by REITs for 2015 onwards and is set out in the following table. Identification of the refunds of DWT specific to REITs payments is not readily available as it would require a review of the returns of individual taxpayers.

Year

Amount of DWT Collected

2015

€4.0m

2016

€7.8m

2017

€11.8m

2018

€12.4m

In relation to the Deputy's second question, Section 23 Finance Act 2016 introduced, and Section 18 Finance Act 2017 amended, the Irish Real Estate Fund (IREF) regime, which took effect for accounting periods commencing on or after 1 January 2017. Unit holders in an IREF are subject to IREF withholding tax at a rate of 20% on payments made to them by the fund. IREFs are required to declare and pay this withholding tax on an annual basis. I am advised by Revenue that the first return and payment of IREF withholding tax was due 31 July 2018, for funds having accounting periods that ended in the second half of 2017. The amount of IREF withholding tax collected on the distribution of profits by relevant IREFs was approximately €9m for this period.

Returns were due to Revenue in January in respect of funds with accounting periods ending in the six months to July of 2018. These returns are currently being analysed and information will be available in due course. As is the case with REITs, identification of the refunds of DWT specific to IREF payments is not readily available as it would require a review of the returns of individual taxpayers.