Stephen Donnelly (Wicklow, Fianna Fail)
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128. To ask the Minister for Finance the quantum of tax in 2018 estimated to be paid due to changes to section 110; the quantum inclusive of the asset base and the estimated tax from that base; and if he will make a statement on the matter. [43640/17]

Stephen Donnelly (Wicklow, Fianna Fail)
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129. To ask the Minister for Finance his plans to conduct a review of the impact of changes made in budget 2017 inclusive of the estimated tax take from the asset base of funds companies which purchased loan books since 2010; and his plans to issue a report on this matter. [43641/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 128 and 129 together.

In the 2016 Finance Act, my predecessor introduced provisions to address concerns raised in both the media and the Dáil regarding the use of section 110 companies and certain Irish collective investment vehicles by international investors to minimise their tax payments on Irish property transactions.

Section 22, Finance Act 2016 made certain changes to the taxation of qualifying companies, within the meaning of section 110 Taxes Consolidation Act 1997.  The changes related to the taxation of profits which were derived from Irish land and buildings.  Those changes took effect from 6 September 2016.  I am advised by Revenue that as typically qualifying companies have a 31 December year end, these changes will impact approximately 4/12s of the 2016 taxable profits for these companies, with the full effect of the changes being seen in the 2017 taxable profits.

Revenue further advise me that the corporation tax return - the CT1 - for accounting periods ending in 2017, which for most companies will be due for filing by 23 September 2018, requires certain information from qualifying companies in respect of their Irish property businesses.  When the qualifying companies file those returns, Revenue will be in a position to quantify the Irish property base of qualifying companies.  Allowing for late returns and processing of data, data from returns filed in September 2018 will be available for analysis in early 2019.

The Irish Real Estate Fund (IREF) legislation was also to address the issue of non-resident investors, who have been investing in Irish property through fund structures, avoiding a charge to Irish tax on profits arising from Irish real estate. The IREF regime, which was introduced by section 23 Finance Act 2016, took effect from 1 January 2017. IREFs must operate a 20% IREF withholding tax on the happening of certain taxable events (such as a distribution of profits or a redemption of units). Any withholding tax deducted in respect of distributions made during 2017 must be returned to Revenue by the end of July 2018. Therefore, I am advised by Revenue that they are not yet in a position to identify the amount of withholding tax relating to IREF taxable events that have happened so far in 2017.

 As the measures were implemented in Finance Act 2016, it is still too early for the Department or Revenue to assess the impact of the changes and would be impracticable to review the impact of the changes at this time. 

 In relation to the two measures, a yield of €50 million was included in Budget 2017. This estimate was both conservative and prudent. Regarding the estimates for 2018, my Department forecasts overall Corporation Tax receipts for a particular year and these forecasts do not include separate component elements for section 110 companies or IREFs.