Dáil debates

Tuesday, 9 October 2018

Financial Resolution No. 2: Capital Gains Tax

 

10:10 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour) | Oireachtas source

The Minister made a presentation as if this was all new. He referred to the Minister for Finance's publication, Ireland's corporation tax roadmap, a copy of which I have with me. The roadmap, which was published on 5 September, states this would be done by 2020. What happened in the past few weeks that requires this to be done tonight? There is no indication in this document that this must be done by way of a Financial Resolution.

We talk about having a more transparent way of budgeting. We are all for making the House more responsible for budgeting but this is not the way to do it. The Minister referenced discussions at European Union level. I was involved in discussions on the BEPS process at EU level. Discussions on anti-tax avoidance measures at that level were not limited to the BEPS reports.

They were expanded to include the introduction of exit taxes for all member states. The anti-tax avoidance exit tax regime is designed to ensure that where a taxpayer moves assets or migrates his or her tax residence out of a state, that state taxes the value of any latent capital gain accrued during the period of residence in that state. That is the point I make to the Minister. We are taxing the latent capital gain accrued during the period of residence in Ireland if people move their intellectual property out of Ireland even though that gain has not yet been realised at the time or point of exit. That is what is included in the discussions at EU level. We have to have some debate about the tax regime that should be applied. The notion the Government has decided it should be 12.5% and announced it tonight without any discussion or debate at the finance committee and without any grounding documentation or any chance for others to look at what is happening elsewhere and what is the tax applying in analogous EU countries is not the way to do it. It is wrong. The financial resolution should be withdrawn and the debate should be allowed to proceed in the discussions on the Finance Bill in the normal way.

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