Joan Burton (Dublin West, Labour)
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Question 168: To ask the Minister for Finance the position in respect of the payment of stamp duty by brokers on shares they buy to underpin contracts for difference; the purpose of the announcement by the Revenue Commissioners, on St. Patrick's Day, of their intention to collect stamp duty on such contracts; if he received representations from the Irish Stock Exchange, brokers, bankers or other interests; if he has postponed the Revenue's changes, the likely loss of stamp duty from the review and postponement of the Revenue measures; and if he will make a statement on the matter. [14157/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Following the announcement by Revenue clarifying the stamp duty treatment on purchases of shares underpinning the contracts for differences, CFDs, my Department received strong representations that there would be severe consequences for the liquidity of the Irish stock market and thus, on the ability of Irish firms to raise capital and potentially on the viability of stockbroking here.

I considered these representations carefully and, as they seemed to have some substance, I came to the view that the matter needed to be examined in more depth to assess the full consequences of any change, taking account of the international nature of stock markets and the fact that stamp duty on shares traded in Ireland and the UK is collected for the Exchequer via a payments system common to both jurisdictions, CREST.

In the circumstances, and having regard to the fact that the relevant stamp duty legislation predates the development of the CFD market, I decided to have the matter reviewed in advance of the next budget, and issued a statement to that effect.

I am advised by the Revenue Commissioners that, in the light of the planned review, with a view to budget 2007 announcements, and of the surrounding circumstances, they decided to allow the existing practices of CFD issuers to continue pending the review. They further advise that, as CFD business could otherwise have simply transferred to non-Irish equities, there is unlikely to be any net loss of stamp duty.