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

I thank all Deputies for their comments on this section. I will address each in turn, and I will begin with Deputy Doherty's comments. I take his point about the stage of the process at which we are introducing the amendment. It is a fair point. On Committee Stage I had indicated that a further measure would be necessary. It took my Department some time to make sure we could bring in an amendment we believed would be adequate to deal with a potential vulnerability that could lead to tax avoidance. On Committee Stage I said that I would come back to do this, which I have done. Clearly, in the future if we are in a position to deal with this matter on Committee Stage, that is what we would want to do.

With regard to the Deputy's comment on the yield, we have exchanged views on this on Committee Stage and on Report Stage. Early indications on transactions that have taken place since budget day are that the 6% rate has not deterred or significantly affected the number or value of transactions. We continue to believe that the yield estimate for this measure in 2018 will be delivered. The overall additional yield, however, to be delivered by this measure is a very small percentage of the total tax take we expect to collect next year. There are other reasons for implementing this measure, especially indicating very clearly that we should move into a place where, if we change a rate to stimulate a part of the economy and the part of the economy recovers, we should then be willing to review what that rate should be. A figure of 2% is unsustainably low given that for most of our recent history that rate was at 9% and then moved to 6%.

I am glad that the note we shared was of help to colleagues and it is hoped it will play a role in facilitating the passage of this message here tonight. I heard the views of Deputies about the role of notes such as this into the future.

On Deputy McGrath's questions around double taxation agreements, he is correct. We have one stamp duty double tax agreement with the UK. Other than that particular agreement, stamp duty is outside Ireland's double tax agreements. Do we think this will yield a risk of double taxation? It is our view that it will not because stamp duty is a jurisdictional tax.

In other words, tax is levied where the transaction takes place. The Deputy is correct in saying that we only have a single double taxation agreement.

On possible compliance difficulties that might be caused as a result, this regime will apply to companies or funds located outside Ireland but where the property transaction takes place in Ireland. We do not believe that any compliance costs will be incurred by virtue of obeying this change in our law.

Deputy Burton referred to how, when changes in price levels are apparent, that the taxation regime should reflect that. I agree with her entirely which is why I believe this is the correct measure. It will deliver the yield I mentioned and it is the right measure to take because of the price levels we are now seeing in the economy for commercial property. On Deputy Burton's question about the resting issue, I am told the legislation which deals with this is the Finance Act 2013. My understanding is that the correct legal provisions are in place to deal with this matter but if the Deputy has any concerns on its implementation she should let me know and either myself or the Revenue Commissioners will respond.

Deputy Fitzmaurice and another Deputy asked if we believe that in the period between the stamp duty measure being implemented and my bringing this measure to the Oireachtas this evening we might have lost tax and if we believe any companies might have taken advantage of that period. The answer is "No" because if one looks at the length of time that has elapsed between the change on budget night and where we are now, that period was not sufficiently long to facilitate the setting up of any entities that could have led to the avoidance of the 6% rate. We do not believe that any tax has been lost due to the time which has elapsed but we believe that if we had not introduced this measure, we could see entities being formed that would lead to the avoidance of the 6% rate which is why we are making this change. In terms of clarity regarding transitional periods, it was, by and large, the point when a contract was signed. If a contract was signed before this measure was implemented, it is liable to the lower tax rate. If the contract was not signed, it is liable to the higher rate of 6%. The Revenue Commissioners published a note on this on its website and I can have it passed on to Deputies Fitzmaurice and Mattie McGrath, if it would be helpful.

On the points made by Deputy Mattie McGrath, it is in recognition of the danger of loopholes and vulnerabilities that we are making this change.

In regard to Deputy Michael Healy-Rae, I will leave a debate on the merits or demerits of Seanad abolition to another day. Suffice to say, it is still there. I said that when I was in the Dáil, we would return to this. While the Seanad has much wisdom and many virtues, we said it was an issue we would come back to but I thank the Deputy for his contribution.

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