Martin Mansergh (Tipperary South, Fianna Fail)

I will give the House the gist of it. Hong Kong has a territorial taxation system under which foreign-sourced income including interest will not be sourced in Hong Kong. Furthermore Hong Kong does not have a withholding tax on interest payments paid to non-residents. These features of its tax system could open up possibilities of aggressive tax planning involving the Ireland-Hong Kong double taxation agreement. Ireland's usual treaty policy is to seek nil withholding rates for interest payments. However, to avoid double non-taxation a 10% rate was agreed to be included in the treaty. I am afraid there has been no consideration of this, but like everything else the next Government will be free to have a look at it if it wishes.

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