Pearse Doherty (Donegal, Sinn Fein)
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162. To ask the Minister for Finance if dividend withholding tax, DWT, is exempted under tax legislation, Revenue Commissioners guidance and the Ireland-Malta double tax treaty, in the circumstances in which the recipient of the dividend, shareholder 29.9%, is a Maltese tax resident shareholder with a 29.9% shareholding in the Irish resident company that is quoted on the Irish Stock Exchange (details supplied); and if he will make a statement on the matter. [39635/16]

Pearse Doherty (Donegal, Sinn Fein)
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163. To ask the Minister for Finance if DWT is exempted under tax legislation and Revenue Commissioners guidance in the circumstances in which the recipient of the dividend, shareholder 15%, is an Irish investment fund that is regulated by the Central Bank with a 15% shareholding in the Irish resident company that is quoted on the Irish Stock Exchange (details supplied); and if he will make a statement on the matter. [39636/16]

Pearse Doherty (Donegal, Sinn Fein)
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164. To ask the Minister for Finance if DWT is exempted under tax legislation and Revenue Commissioners guidance in the circumstances in which the recipient of the dividend, shareholder 15%, is an Irish limited company with a 15% shareholding in the Irish resident company that is quoted on the Irish Stock Exchange (details supplied); and if he will make a statement on the matter. [39637/16]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 162 to 164, inclusive, together.

The primary purpose of Dividend Withholding Tax (DWT) is to collect tax at source from dividend payments and other distributions made by Irish resident companies to Irish resident individuals who are chargeable to income tax on such distributions (with a credit allowed for DWT deducted).

The legislation dealing with DWT, which is contained in Chapter 8A of Part 6 of the Taxes Consolidation Act 1997, provides for a number of exemptions from the requirement to operate DWT. These statutory exemptions apply where the recipient of a dividend from an Irish resident company would not be subject to Irish tax in respect of that income. In those cases, if exemptions from DWT were not available, any DWT deducted would have to be refunded. Deducting DWT in cases where there is no liability to Irish tax on the dividend income would result in an unnecessary burden for the recipient of the dividend, with no net additional yield to the Exchequer.

A dividend paid by an Irish resident company to another Irish resident company is not subject to corporation tax in the hands of the recipient company on the basis that the profits from which the dividend is paid will already have been subject to corporation tax in the hands of the paying company. Therefore, Irish tax legislation does not require DWT to be applied in respect of dividends paid by one Irish resident company to another. In circumstances where the paying company is not a '51% subsidiary' of the company in receipt of the dividend, the exemption from DWT is not automatic and must be established by means of an appropriate declaration of entitlement to exemption completed by the applicant company.

DWT also does not apply where a dividend is paid by an Irish resident company to a shareholder that is a collective investment undertaking such as an investment fund regulated by the Central Bank. In order for the exemption to apply the collective investment undertaking must make an appropriate declaration of entitlement to the exemption.

 Certain non-resident persons, who are not chargeable to tax in respect of the dividend income concerned, are also specifically exempted from DWT under the legislation. An individual shareholder who is resident in a country with which Ireland has a double tax treaty, such as Malta, and who is neither resident nor ordinarily resident in the State, is exempt from income tax, under Irish tax legislation, in respect of dividends received from an Irish resident company. Similarly, the individual would also be exempt from DWT in respect of such dividends provided he or she makes an appropriate declaration confirming entitlement to the exemption.