Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

While I had not planned to speak until I introduced my next amendment, I will do so in light of the focus on charities, which is an issue I raised some time ago. I welcome the Minister's statement because I never claimed that the charitable status of section 110 companies was in any way used to reduce their tax liability. As the record will show, I made it clear that the reasons for seeking this status were to ensure these companies were not part of the accounting process of their parent companies and to deal with the issue of bankruptcy. At the time, I wrote to the charities regulator providing information on the conflict of interest in respect of the legal firms that have set up the charities and section 110 companies. In my view, this is the aspect of the matter that is being investigated and, in fairness, it has been highlighted by the Department and Revenue or questioned by individuals within both entities. It is important to make that point.

An issue arises from the fact that the only vehicle that can be used for this purpose is a charitable vehicle. Members of the public find it extremely distasteful that vulture funds are using charitable vehicles. While it should be made clear that these companies do not obtain tax relief and do not enjoy tax benefits as a result of this status, in the Irish psyche the term "charitable" is associated with helping someone else, whereas many people take the view that vulture funds do the opposite. While this approach is part of an international trend, the position elsewhere is not identical to the position here. It may be necessary to examine whether a vehicle other than charities is available that could satisfy this type of purpose and activity. It is wrong that Matheson has set up a charity that is being used by vulture funds.

The Minister has clarified that these companies are not benefiting from a tax perspective and that it is the structure of the section 110 company, originally provided for in the 1997 Act, which allowed them to pay as little tax as they have been paying in recent years .

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