Willie O'Dea (Limerick East, Fianna Fail)

I did not receive the specific letter to which Senator Twomey referred but I am aware of what is being said and who is saying it. I disagree with the Senator's argument. The current position is that where an employer gives an employee shares in the company, those shares are taxable at their current market value. What is happening in many cases is that companies are giving shares, securities or other types of financial interest in the company to employees at a certain market value, which is quite low, which these employees have an immediate right to transfer to a different type of security that is much higher in value. However, the tax applies only on the lower value. This represents straight tax avoidance. The shares might as well be given tax-free.

On the other hand, to encourage high-powered people in the software industry and so on to come to Ireland, there are various stock option schemes for which tax relief is available provided one receives the prior approval of the Revenue Commissioners. The Revenue will give that approval if certain conditions are met. The stock options schemes in place, although specific and requiring the prior approval of the Revenue Commissioners, are also generous and wide-ranging. There is no need to allow people concoct their own schemes which may represent nothing other than undiluted tax avoidance.