Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

The context for the changes to the section came about when it came to light the vulture funds were essentially paying no taxes in the country. I took a look at the total assets managed by the vulture funds and the yields they were making on them. This is based on their own accounts and the profits they state they are making. By my calculations, were they allowed to continue to avoid paying all taxes, the State would lose in the region of €10 billion to €20 billion over the next ten years or more. The amount of money at stake here is off the scale.

I recognise that significant progress has been made by the Minister. The mark to market inclusion is very welcome, the 20% withholding tax application is very welcome, and the notification to Revenue, to which the Minister of State has alluded and is updating again, is also very welcome. The word I have from the industry, from advisers to the vulture funds, is they are still very confident they will be able to help their clients avoid all, or nearly all, taxes in the country. I want to go through various loopholes they have identified. These are not loopholes I believe are errors in the amendment proposed to the committee by the Minister of State, these are loopholes the lawyers and accountants advising the vulture funds have identified. They are quite bullish about these. They are advising their clients privately they will be able to use any number of these to continue to get around paying tax in the country.

Before we go into them, I would like clarity on the Government's policy position. I believe we are lined up, but just to be clear, my understanding of the policy position as articulated by the Minister, Deputy Noonan, is that profits generated from economic activity in Ireland would be fully taxed in Ireland as per normal companies and in this case, therefore, a company managing a loan book, which is what the vulture funds do, be they mortgages, commercial or unsecured debts, would pay full capital gains tax and full withholding tax. Before we get into the detail, just so there is no confusion, will the Minister of State confirm the Government's position is still that the profits generated by the vulture funds here will be fully taxed and they will not be allowed to continue to avoid paying taxes in the country?