Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I assume the Deputy is referring to a recent Circuit Court decision regarding the tax treatment of the transfer of share rights from a company to its shareholders. I am advised by the Revenue Commissioners that section 130(3)(a) of the Taxes Consolidation Act 1997 provides that the transfer of an asset by a company to its members constitutes a distribution for tax purposes. In regard to the case in question, the view of the Revenue Commissioners is that the transfer of rights attaching to shares owned by a company to shares owned by its members amounts to a transfer of an asset and, as such, is a distribution pursuant to section 130(3)(a).

Both the appeal commissioner and the Circuit Court have ruled in favour of the Revenue Commissioners and determined that the transfer of share rights is chargeable to income tax as a distribution in the way I have outlined. It is, therefore, considered by the Revenue Commissioners that the current legislation operates as intended and is sufficiently robust to provide for distribution treatment on such share rights transfers. The Revenue Commissioners will continue to challenge taxpayers who attempt to extract cash from companies in a tax-free manner.

The Revenue Commissioners carry out a robust programme of compliance interventions to minimise the burden on the compliant taxpayer and tackle the non-compliant taxpayer. This involves taking account of all risks that apply to a taxpayer across all taxes and duties. The role of the Revenue Commissioners is to recover any unpaid tax or duty along with interest and penalties.

The anti-avoidance units of the Revenue Commissioners specifically deals with the identification and challenging of aggressive tax-avoidance schemes in the way I have outlined.

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