Retention and examination of documentation

Declaration of PRSA Administrator

Declarations of investment undertakings

Section 22 provides for the introduction of a tax regime for IREFs, by inserting a new Chapter 1B into Part 27 and a new Schedule 2C into the Taxes Consolidation Act 1997. Amendments are being made simultaneously to section 21 of the Bill, which amends section 110 of the Taxes Consolidation Act 1997, to ensure there is no scope for arbitrage between the two areas. This has proved to be a difficult and complex issue, and the amendments required to address this issue in the Bill as published, in the first instance, and the new replacement Chapter which I am proposing, indicates the complexity of this topic. In order to provide coherent legislation to the committee, the original section 22 is being deleted and replaced with a new section. These amendments reflect further consideration of the provision in the light of feedback and commentary received by my Department and the Office of the Revenue Commissioners since publication. Further stringent anti-avoidance provisions have been included. These changes will act to ensure the provisions operate as intended and that the Irish tax base is protected. The objective of these provisions is to provide for the introduction of a taxation regime for investment undertakings, where 25% of the value of that undertaking is made up of Irish real estate assets. These amendments do not in any way reduce the tax payable by funds and any exemptions provided for in the provision are merely a restatement of existing exemptions. The IREF must deduct a 20% withholding tax on certain property distributions. The amendment addresses the issue of non-resident investors who have been investing in Irish property through fund structures, thus avoiding a charge to tax on profits arising from Irish real estate. The 20% withholding tax will not apply to certain specific categories of investors who provide appropriate declarations, including pension funds, life assurance companies and other collective investment undertakings. This mirrors similar exemptions set out in the tax code for investment by these entities generally. In the new section, I am extending the list of exempt entities to include charities and credit unions. I will outline the other additions to the section.