Alice-Mary Higgins (Independent) | Oireachtas source

I thank Dr. Stewart for joining us. A number of the issues I was going to raise have been raised by Deputy Farrell but I will follow up on a few points. I am interested in the issue of double non-taxation. Perhaps Dr. Stewart could comment further on that point in the context of the conversation around the effective tax rate. There is a push on the idea of an international effective tax rate. It was out of step with proper processes in the past but perhaps Dr. Stewart could comment further in the current context where there is meant to be that push towards a global effective tax rate.

Are section 110 vehicles onshore entities? They are marketed as such but seem to meet the criteria the IMF has set out for offshore financial centres. The IMF describes those as countries or jurisdictions providing financial services to non-residents on a scale that is incommensurate with the size and financing of the domestic economy. That is important because, as was touched on, there is a danger of their distorting the measurement of our financial economy. Should section 110 vehicles be recognised as offshore in that context? If they are being treated as onshore but do not touch the real domestic economy in any meaningful way, that will throw off our foreign direct investment, FDI, figures. Perhaps Dr. Stewart would comment on that onshore or offshore piece.

I am also interested in the beneficial ownership piece. The following is related to but does not touch directly on section 110. Investment limited partnership legislation went through approximately a year and a half ago. What was particularly notable was that it seemed for that particular form of company the legislation increased the powers of non-beneficial ownership while diminishing liabilities. One was not considered to be a beneficial owner unless one hit the 25% threshold, yet one was allowed to sit on the board, make decisions and engineer hiring, which one would not have been allowed to do in the past. How is control measured? We only have the blunt measures around the 25% ownership and the control of 25% of voting when there are other mechanisms for control such as, for example, seats on boards. I would love for Dr. Stewart to elaborate further on the case he mentioned because this issue extends beyond the question of Russian assets. There are also questions around parent companies and group companies, and the control a group may exercise on a charitable trust that comes under that group even though the trust is registered as a charity. Are we monitoring control effectively and in the right ways? Do the beneficial ownership rules, the 25% rules and even the 25% voting rights rules evade the proper monitoring of control?

How section 110 companies lend their money seems to be one of the main mechanisms over which there is little monitoring. There seems to be little monitoring of what section 110 companies do with their money in respect of things such as loans. This is not my normal area to expertise but we know that in the past a sanctioned company was able to receive loans through a section 110 structure. Will Dr. Stewart comment in respect of loans from a section 110 company to another entity?

Dr. Stewart touched in his opening statement on the aircraft leasing sector. That is an interesting sector which requires much more scrutiny. I am a member of the Joint Committee on Environment, Climate and Communications and, in an area that is slightly related, I am aware that one of the major beneficiaries of financial subsidy from the State is jet kerosene. Some €600 million goes to jet kerosene tax relief every year. That is an enormous subsidy for fossil fuels and public moneys are forgone in tax in that sector.

Given that the Joint Committee on Environment and Climate Action is considering this matter, I am very interested in the scrutiny of aircraft leasing structures and those company structures. Dr. Stewart touched on the issue briefly and I would appreciate hearing more. He will be able to take the more useful questions from my questions.