Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

I thank the Minister of State for that outline. The investment undertaking is one that I have been trying to get my head around for some time. The Minister of State referred to that in his amendment. The list of groups that are exempt from the withholding tax includes investment undertakings but it is the Government's position that Irish collective asset management vehicles, ICAVs, qualifying investment funds, QIFs, and others will not be exempt from the withholding tax. Can the Minister of State square this circle for me? We have a list of exempted investor types, which he has run through - the pension funds, life assurance funds, unit trusts, credit unions and so forth and included in that are investment undertakings. On a first reading, it suggests investment undertakings will not pay the withholding tax. I sought clarification on this and the advice I have, if I understand it correctly, is that QIFs and ICAVs, both resident and non-resident, will have the withholding tax applied but QIFs and ICAVs can be owned by investment undertakings. The standard tax avoidance practice is that one would set up an investment undertaking in Luxembourg, and there are various reasons one would set up two of them and transfer money back and forth before one would sent it out to the Caymans. Can the Minister of State clarify whether investment undertakings are exempt and, if they are, are ICAVs and QIFs exempt if they are owned by an investment undertaking? It may be relevant as to whether the investment undertaking is inside or outside the EU as there may be treaty laws that mean we do not apply here and they do not apply there. Are investment undertakings exempt from the withholding tax? Are QIFs and ICAVs exempt from the withholding tax? My understanding is they are not, but are they exempt if they are owned by an investment undertaking?

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