Eric Byrne (Dublin South Central, Labour)
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Question 122: To ask the Minister for Finance the liability to corporation tax of financial institutions in each of the years 2005, 2006, 2007, 2008 and 2009; and the cumulative tax losses being carried forward by financial institutions as at 31 December 2009. [15145/11]

Eric Byrne (Dublin South Central, Labour)
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Question 123: To ask the Minister for Finance the cumulative tax losses being carried forward by the 100 largest financial institutions as at 31 December 2009. [15146/11]

Eric Byrne (Dublin South Central, Labour)
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Question 125: To ask the Minister for Finance the number of financial institutions carrying tax losses forward at 31 December 2009 of greater than €5,000 million, between €1,000 million and €5,000 million, between €500 million and €1,000 million, between €250 million and €500 million, between €100 million and €250 million, and between €50 million and €100 million. [15147/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 122, 123 and 125 together.

I am informed by the Revenue Commissioners that information in relation to the corporation tax yield from financial institutions in the calendar years 2005 to 2009 inclusive is as shown in the following table:

It should be noted that the classification of companies into the 'financial' sector is done by reference to the primary area of economic activity reported by the company and the taxes collected are allocated to the category without reference to the precise economic activity which generated them. While this information is sufficient to underpin broad sector-based analyses there will undoubtedly be some inaccuracies at individual level. This should be borne in mind when considering the information provided .

Information in relation to cumulative tax losses being carried forward by financial institutions is derived from corporation tax returns filed for the year 2009, the first year for which this information is available . The available information is the amounts of unused losses and capital allowances that are available for carryover to years following 2009 and is estimated at €34,306 million. For technical reasons, it was necessary to derive as an estimate an amount of approximately €1,003 million for losses and capital allowances that was used in the computation of group relief to be offset against the gross amount of unused losses and capital allowances figure before arriving at the net total of €34,306 million. It is not possible to separately identify the amounts of unused losses from unused capital allowances in tax returns.

The 100 largest financial institutions have been identified as those companies in the financial sector with the 100 largest amounts of cumulative tax losses available for carryover to years following 2009.

The available information from the 2009 tax returns is the amount of unused losses and capital allowances that are available to the top 100 financial institutions for carryover to years following 2009. The amount of such unused losses and capital allowances, taking into account an estimate for any losses and capital allowances that are used in the computation of group relief, is estimated at €34,039 million. It is not possible to separately identify the amount of unused losses from unused capital allowances in tax returns. In relation to a distribution by range of tax loss of the number of financial institutions carrying tax losses forward, the information requested is set out in the following table. However, because of the Revenue Commissioners' obligation to observe confidentiality in relation to the taxation affairs of individual taxpayers and small groups of taxpayers, the breakdown by bands of losses is provided in a less detailed format than that requested by the Deputy.

Tax Losses carried forward by financial institutions 2009

The figures in the table are based on the amounts of unused losses and capital allowances as derived from the 2009 tax returns as being available for carryover to years following 2009 before deduction of any losses and capital allowances that are used in the compilation of group relief. For technical reasons, it is not possible to provide a breakdown at company level of unused losses and capital allowances that are surrendered to other companies within a group structure and then claimed as group relief. An estimate of this figure for all financial institutions is €1,003 million. It is not possible to separately identify the amount of unused losses from unused capital allowances in tax returns.

It should also be noted that Ireland follows the international norm in that losses incurred in the course of a business are taken into account in arriving at the appropriate amount of tax that a company should bear. Under existing legislation, companies are entitled to carry forward unrelieved trading losses for offset against trading profits in future accounting periods until the losses are fully relieved.

However, special arrangements apply in the case of financial institutions, in the context of dealing with impaired loan assets. In this regard, provisions were included in the National Asset Management Agency Act 2009 to limit the amount of relief that can be claimed by participating institutions for losses carried forward from earlier years. This measure, which is provided for in section 396C of the Taxes Consolidation Act 1997, has the effect of restricting the amount of a participating institution's group trading income which can be reduced by losses brought forward from earlier periods to 50 per cent of such income. The measure will ensure that, when the institutions return to profitability, a minimum of 50% of their trading income will remain chargeable to tax in an accounting period notwithstanding claims for relief for losses carried forward into that period.