Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

We also know that dividends paid out by a REIT on its rental income are subject to 20% dividend withholding tax. We also know that in many cases that 20% does not apply because of tax treaties. The Ireland-US tax treaty holds less than 10% of REITs and the dividend withholding tax goes down to 15% and so on. I have looked at the three REITs in the State and their annual reports and accounts for 2016 and 2017. Their annual reports for 2016 showed they had a combined value of €2.637 billion. That increased according to their 2017 accounts to over €3 billion. It showed that the profit within the three REITs - I can individualise them but there is no point in going through that - was €329 million. It showed that their rent profit, which is a part of their overall profit, was €117 million.

We have been able to deduce that 85% of ownership of these real estate investment trusts, REITs, are foreign owners. This was confirmed by the Department of Finance through a parliamentary question. It was also confirmed that the dividend withholding tax for these three REITs in 2016 totalled €8 million. According to their own accounts, they recorded profits of €329 million. As 85% is attributable to foreign ownership, it means they only paid €8 million in tax, an effective rate of 3%. We know the reason is because most of the profit recorded in their accounts is actually gains and assets appreciation. None of that is taxed within the fund, which is an issue. Even if one strips the gains out, one would have €117 million of rental income profit. The dividend withholding tax paid against that was €8 million, an 8% effective tax rate.

These are multi-million euro funds making, according to their own accounts, in one year €329 million of profit. Of that, 15% will be dealt with differently because it is residential but 85% of it is foreign owned. On the foreign portion, they only paid €8 million tax.