Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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41. To ask the Minister for Finance his views on recent reports (details supplied) of so-called vulture funds being able to pay a small amount of tax; the measures he will take to close tax loopholes; if he will consider an increase in tax or new taxes on these funds; and if he will make a statement on the matter. [1747/17]

Eamon Ryan (Dublin Bay South, Green Party)
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72. To ask the Minister for Finance if his attention has been drawn to a recent documentary on vulture funds (details supplied); and his plans to address the issues raised. [1721/17]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 41 and 72 together.

The Finance Act 2016 has introduced provisions to deal with the issues concerning the use of the section 110 regime by international investors for Irish property transactions.

The amendments made in Finance Act 2016 will ensure that tax will be payable by section 110 companies on their profits from Irish property transactions from 6 September 2016 onwards.  The measure has the effect that for the purposes of section 110 TCA 1997 the use of profit participating loans will be restricted where they are used by qualifying companies relating to Irish property transactions.  

The final proposal does not permit the section 110 companies to 'mark to market' or revalue their assets on the 5 September 2016.  This ensures that unrealised gains will be captured in the charge to tax.

In early 2016, officials from the Revenue Commissioners made my Department aware of the use of the regime by international investors to reduce their Irish tax liabilities on Irish property backed transactions.  Although officials acted swiftly to investigate the issues, careful examination of the legislation and the market was needed prior to proposing an amendment.  It was necessary to find a balance, giving due consideration to companies who are using the section 110 legislation for legitimate securitisation purposes and the structured finance vehicles which are being used to hold Irish distressed debt.  

The recent media coverage has not revealed anything new in relation to the use of the section 110 regime by international investors.  The amendment that I proposed and that was passed as part of the Finance Act ensures that section 110 companies will no longer be able to be used to minimise Irish tax in relation to Irish property transactions.