Written answers

Tuesday, 14 February 2017

Department of Finance

Ireland Strategic Investment Fund Investments

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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165. To ask the Minister for Finance further to Parliamentary Question No.193 of 7 February 2017, the details of the use of section 110 companies by the Ireland Strategic Investment Fund, ISIF, including the number of section 110 companies that ISIF was and remains party to; the purpose of setting up these companies; when they were set up; if third parties were involved in these companies; the tax implications of using this tax structure; and if he will make a statement on the matter. [7433/17]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, all investments made by the Ireland Strategic Investment Fund (ISIF) are assets of the State and any profits generated from ISIF investments are used to fund new investments on behalf of the State in accordance with ISIF's legislative mandate.  The use of Section 110 companies by Irish Investors, including entities such as ISIF, is not a concern as profits from these vehicles are ultimately taxable in Ireland.

Of its 56 investments to date, ISIF, as a commercial investor on behalf of the State, is party to four investments which involve Section 110 structures.  These investments were made in the period since 2013.  These investments are consistent with the purpose of ISIF which is to invest in a commercial manner designed to support economic activity and employment in Ireland.   

A fundamental aspect of ISIF's mandate is to act as a catalyst for co-investment in the Irish economy from private sector capital.  In that context, ISIF structures its investments in a commercial manner, and it is essential that it do so if it is to be successful in attracting private sector capital to co-invest alongside it in Ireland.

Having checked with the independent managers of these investments, ISIF does not currently anticipate any additional tax liability arising from the legislative changes to Section 110 for any of the investors in these investments. 

These investments are also consistent with the original purposes of the Section 110 securitisation regime, which has been a long standing deliberate feature of the Irish tax code and is a legal way for investments to be made in a wide variety of asset classes. It has helped job creation and investment in the Irish financial services sector for many years.

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