Michael D Higgins (Galway West, Labour)
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Question 87: To ask the Tánaiste and Minister for Finance the estimate of the number of residents here owning foreign, income generating properties; the number paying tax on such income; the amount of such tax received annually by the Exchequer; the expected instance of non-payment of such tax; the amount of tax expected to be foregone to the Exchequer through non-payment; the expected impact on Exchequer revenues of the measures proposed in the Finance Bill 2008 to combat non-payment of tax due; and if he will make a statement on the matter. [7746/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that, based on information derived from personal income tax returns for the tax year 2005 (the latest year for which the most complete data is available), some 4,450 individuals returned rental income of €56 million from foreign properties. This figure of €56 million was the profit rent, net of allowable expenses such as interest, repairs, insurance, etc.

I am advised that Revenue cannot identify the amount of income tax specifically attributable to income from foreign property, because this will depend on the particular circumstances in each case, including the amount of double taxation relief to be credited for any tax paid in the other jurisdiction.

Revenue is also not in a position to estimate the number of instances of non-payment of Irish tax on income from foreign property or the amount of tax expected to be foregone through such non-payment. As with all categories of undeclared income, estimating the scale of non-declaration is very difficult; this is particularly so where foreign sources are involved.

However, Revenue has set up a specialist Offshore Assets Group and one of the objectives of this unit is to develop systems to identify persons who use or have used offshore properties as a means of evading tax. So far, the Unit has identified more than 2,000 Irish owners of foreign properties. This has been done through the exchange of information with foreign tax administrations; by monitoring advertisements and websites; by registering with foreign land registries; and by looking at returns of foreign bank information under the EU Savings Directive. All of these cases are referred for examination to ensure that there is no Irish tax evasion involved either in relation to the source of the purchase money or any income being generated from renting the property.

Section 126 of the Finance Bill 2008 (as initiated) extends the Revenue reporting obligations of agents to include rent from foreign property; previously, this obligation was confined to Irish property. It is hoped that this will contribute to the identification of non-payment of tax on foreign property income, but the impact of this new measure will not be known until the first returns are submitted.