Peadar Tóibín (Meath West, Sinn Fein)
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I move amendment No. 100:

In page 95, between lines 35 and 36, to insert the following:“85. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on options available to ensure that international and institutional investors in REITs pay a comparative amount of taxation on income and gains upon receipt of dividends as an Irish resident company or individual investor would have to pay. ”.

This is a difficult matter to understand. A real estate investment trust, REIT, can be set up in this State and can invest in retail properties and collect income from rental properties - and possibly the sale of the rental properties - without paying corporation tax. If the beneficiary is resident in this State, that beneficiary will then pay tax on the dividends.

If the beneficiary were living in the United States, for example, that beneficiary, because of international taxation treaties, could manage not to pay tax on the dividends, or at least could have a significantly reduced tax on the dividends. First, this is obviously a cost with regard to potential taxation that could be received into the State. Second, it has the effect of distorting the property market in real terms, because the REITs can become an efficient way to dodge tax responsibility. A selling point for a REIT built in that fashion would be that it was very tax-effective. It could create distortion in the market. In the long term we would see more internationally owned REITs than Irish people owing properties and dealing with them in that fashion.