Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

I may not have caught the answer. Will the withholding tax apply to profits from capital gains? If an apartment company makes €10 million by selling apartments, will that be captured? No capital gains tax will be applied to it but will the gain be captured by the withholding tax? The Minister said the Government retains taxing rights in Irish property but it has given them all away. It is saying that we retain taxing rights but we are not going to apply corporation tax or capital gains tax. We have given these rights away over the past five years.

The Minister said that funds did not pay capital gains tax but companies do. These are not really funds. A fund does not pay capital gains tax because the fund owns shares and the company has paid capital gains tax on the profits derived to the fund from those shares. That is not what this is. In this case, the funds directly own the properties and the incomes are coming directly to the funds. That is the misunderstanding on which the suggestion is made that we are removing double taxation or that the charging of capital gains tax or corporation tax to a hotel would be double taxation. It is not. Calling them funds does not mean their income is based on shares, like many funds. This is mixing up the taxation of shares with taxation and profits from assets. Can the Minister confirm whether the withholding tax will apply to capital gains profits within the funds?

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