Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I have already asked parliamentary questions on this matter. The replies are clear that Green REIT will not pay the 6% stamp duty on this transaction. Instead, it can avail of a loophole in the tax code that will allow it to pay 1%. The latter means that the taxpayer is being screwed over to the tune of €67 million on foot of this one transaction. This is a structure which does not pay capital gains tax on the disposal of assets. We also have limited taxes on these structures in the first instance. We know, for example, that rental income is paid out in dividends which are then paid to investors. The Central Bank believes that half of the total equity in Irish REITs is held by overseas investors. The dividend withholding tax - the introduction of which I argued for - is set at 20%. We know, however, that this is only a rate on paper because many of these companies, as a result of double tax treaties, can reduce their rate to on average 15% and, indeed, that many more can reduce it even further.

As far back as 2012, the Department of Finance was forecasting significant tax leakage as a result of the REIT structure. I have pointed out three different areas in which that leakage is happening. The Minister needs to close these loopholes in the finance Bill.

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