Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I thank Deputy Donnelly for his comments and question. I acknowledge his assistance with the Finance Act and other matters, particularly with section 110, which the Deputy raised and to which some changes were made and brought about in this House. I recall the comments that were made at the US Senate committee indicating that Ireland was alleged to be a tax haven. That was later disproved and commented upon. I am aware of the action taken by Brazil. Ireland is not the first country that that has been applied to. We reject that as well. In respect of the Deputy's comments on the international trade treaties, corporation tax is a matter for each individual country. National competence is enshrined in the European treaties. The Deputy is right that this is Ireland's business. In respect of the profit-sharing issue the Deputy raised, he also referred to the third charge which was about tax incentives to avoid paying tax. There was an appeal lodged by the Attorney General on behalf of the Government in respect of a finding or ruling made by the European Commission in this regard.

Irish collective asset management vehicles, or ICAVs, as they are called, are one of a range of legal structures which regulated collective investment schemes can take. Others include investment limited partnerships, common contractual funds, unit trusts and investment companies. Of these, only the investment companies are obliged to publish their accounts in accordance with the Companies Act. ICAVs are still obliged to keep proper books of accounts that must be audited and be made available to persons who have a right to inspect the accounts, including the competent authorities for investment funds, which are the Central Bank of Ireland and the Revenue Commissioners. Failure by the directors of an ICAV to ensure this happens is subject to very serious consequences, including the possibility of prosecution and administrative sanction. I have also noticed that ICAVs are subject to additional layers of regulation that most other companies are not. These are not only additional domestic rules but European rules that also apply to such structures under the requirements imposed by the undertaking for collective investment of transferable securities, UCITS, directive and the alternative investment fund managers, AIFM, directive.

In the Finance Act, the Minister for Finance also made changes to the taxation of Irish funds that hold Irish real estate. Irish real estate funds must deduct a 20% withholding tax or certain property distributions to non-resident investors. The legislation there addresses the concerns raised regarding the use of fund vehicles to invest in Irish property. The Finance Act also introduced legislation to address concerns that had been raised by Deputy Donnelly in respect of the section 110 regime whereby some investors minimise their Irish tax liabilities on Irish property transactions. This will close off the unintended use of the section 110 regime for Irish property transactions.

The Irish funds industry is obviously a key part of the internationally traded financial services sector, often referred to as the IFSC. Some 12,500 people are employed directly and indirectly, both in Dublin and in a number of locations throughout the country. There is some €2 trillion of assets under the management of funds in Dublin. The sector services a further €2 trillion in assets domiciled elsewhere. This area of IFSC remains by some margin its biggest sector of employment. Clearly, the funds may be structured in different ways, as the Deputy has pointed out. The Minister has moved in the Finance Act to address two issues-----

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