Ms Josephine Feehily:

It is a loss on their balance sheet. It is not a debt. It is just a loss they have. They can offset it against profits. The committee might be interested to know in the context of our audit programmes we challenge large claims for losses all of the time.

In the past five years, for example, we have restricted losses and not always in the case of large businesses. This resulted in a figure of €500 million. We have not allowed businesses to claim losses because we deemed they were artificially generated. This also features in our work on avoidance. The creation of artificial losses to be offset against capital gains is a feature of avoidance schemes promoted by practitioners. The issue of losses is tricky and the sums concerned are valuable. In this context, the chapter is simply stating there is now information available to us on losses that have the potential to reduce the tax yield from the various sectors legally and properly in accordance with the current tax law.