Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Section 110 of the Taxes Consolidation Act of 1997 sets out a regime for the taxation of special purpose vehicles set up to securitise assets. This regime is an important part of Ireland's offering as a location for the conduct of financial services. Ireland is not unique in having a securitisation regime. A number of other EU countries have such a regime in place as part of a competitive financial services offering.

The importance of securitisation has been recognised by the European Commission through their work on capital markets union, one of the aims of which is to seek to build a sustainable securitisation regime across the European Union. Securitisations are useful, both for banks in freeing up capital to allow them to continue to lend to individuals and businesses, and for the productive economy as it can underpin the supply of capital market financing to industries and companies in Ireland, Europe and further afield.

The purpose of the section 110 regime, as with other similar regimes worldwide, is to enable noteholders to invest through one structured vehicle without giving rise to an additional layer of tax as compared to a direct investment in the underlying assets. I am advised by Revenue that it is not possible to calculate the amount of tax that would be paid if a company had not submitted a notification to Revenue that it is a qualifying company for the purposes of section 110 of the Taxes Consolidation Act of 1997. This would in any case be an entirely hypothetical estimation as it is unlikely that such transactions would take place here in the absence of securitisation legislation. It is for that reason I cannot accept the amendment.