Oireachtas Joint and Select Committees

Thursday, 22 February 2018

Public Accounts Committee

Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts (Resumed)

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail) | Oireachtas source

Leaving aside the insertion of a sunset clause because the Department of Finance does not want companies to come back after ten or 15 highly profitable years to say they lost money 20 years ago and want it offset against future profits, has any country placed a monetary ceiling on the value of losses that can be carried forward? Have any of the witnesses from the Department heard of that? The inclusion of a ceiling and a sunset clause should be examined. The witnesses will say the European Union would not like that, and members are aware of that, but do the witnesses appreciate my point in that regard? It is extraordinary to hear of the concentration in a small number of companies of much of the €200 billion in losses carried forward. It is not good for a country the size of Ireland to have that level of losses carried forward in the hands of a small number of companies because, as has been pointed out, it would give such companies a higher takeover value. For a company with a big corporation tax liability seeking to take over another company, a loss of hundreds of millions carried forward would probably be a more valuable asset than the takeover company itself. Ireland is in an odd position in that regard. We are here to discuss the level of risk this poses to the Exchequer because that is the essence of the report of the Comptroller and Auditor General. Has any thought been given to a ceiling or a sunset clause? "Not really" is the answer.

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