Seán Fleming (Laois, Fianna Fail) | Oireachtas source

We received information from the Department of Finance on close companies, which are companies controlled by five individuals or fewer. I wish to put on the record, because people are watching these proceedings, that we have been told that approximately 175,000 companies are registered for corporation tax in Ireland but this document also states that 116,000 of those are close companies.

As such, the vast majority of the companies involved are very small. The witness estimated that the liability paid in PAYE by the subscribers to those companies was approximately €134 million. Appendix 5 states, "The number of returns for these companies for the tax year 2015 is 116,000 companies, and the estimated corporation tax liability is €632 million". At a of 12.5%, I calculate that there is approximately €5 billion worth of profits in those small companies. Am I right in saying that? That is right. The briefing we received this morning held that the majority of tax connected with a close company is paid by way of salaries when the owners of the company withdraw it. From what Mr. Cody is saying, however, it seems that the vast majority of tax is paid by the companies directly.

I asked Mr. Cody about the surcharge he said that it amounts to €20 million, so quite a lot is retained that way. Why would companies let money sit there and pay a surcharge on it? Maybe Mr. Cody is not the one to answer that. The Revenue Commissioners are happy to get the surcharge. Is it clever tax planning for a firm to allow itself to be liable for a surcharge in a close company? Mr. Cody said that 4,600 companies returned surcharges of €21.4 million in 2015. Has he any observations on that? I know that he cannot speak for the taxpayer.