Willie O'Dea (Limerick East, Fianna Fail)

I understand the thinking behind Senator Kelly's amendment. Where a tenant is paying rent to a foreign landlord, even if he or she is in receipt of rental allowance from the HSE, the law requires that the tenant must deduct tax at the standard rate from the rent paid against the liability the foreign landlord will ultimately have for tax. This imposes an onerous burden on tenants. I am not sure how many tenants are paying rent to absentee landlords but I suspect few of them are aware of this provision. Nevertheless, I am informed by the Revenue that a certain of money is incoming under this scheme, where tenants hang onto the portion of the rent and pay it over at the end of the year.

It is a difficult issue. The purpose of the provision is to protect the Exchequer. The information available to the Revenue Commissioners is that if this requirement is removed, any or all Irish landlords could set up offshore entities to rent out their properties and there would be no obligation on the tenant to disclose this situation or make returns to the Revenue Commissioners. This would facilitate the avoidance of tax on the part of landlords. Nevertheless, I accept it is not a satisfactory arrangement. The Minister is conscious of this and he and the Revenue Commissioners are working to see if a more acceptable system can be devised which still protects the Exchequer.