Louise O'Reilly (Dublin Fingal, Sinn Fein)
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51. To ask the Minister for Finance the estimated revenue that would be generated by setting a minimum withholding tax of each of 15% and 25% on all royalty payments leaving the State for a non-EU country; and if he will make a statement on the matter. [40711/20]

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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52. To ask the Minister for Finance the estimated revenue that would be generated by setting a minimum withholding tax of 15% and 25% on all dividend payments leaving the State for a non-EU country; and if he will make a statement on the matter. [40712/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 51 and 52 together.

In relation to question 40711, I am advised by Revenue that tax returns do not separately identify the amount of royalty payments leaving the State for non-EU countries. Furthermore, if Irish tax legislation was amended to provide for a minimum withholding tax on all royalty payments leaving the State for a non-EU country, this would also be subject to the rules for the taxation of such payments as agreed in double taxation treaties with the counties of receipt. For this reason, it is not possible to provide an estimate of the revenue to be generated by applying a withholding tax on such payments.

Regarding Question 40712/20, 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 resident individuals who are chargeable to income tax on such distributions. A credit is then allowed against the individual's income tax liability for the DWT deducted on the distributions. Non-resident persons, who are not chargeable to tax in respect of the dividend income concerned, are generally exempt from DWT. There are certain exceptions to this general treatment, such as REIT dividends in respect of which foreign shareholders may be subject to DWT.

Deducting DWT in cases where there is no ultimate liability to Irish tax on the dividend income would result in any DWT deducted being refunded, creating an additional administrative burden for the recipient of the dividend and for Revenue, with no net additional yield to the Exchequer. Also, as with royalty payments, if the Irish legislation was amended to provide for a minimum withholding tax on all dividend payments leaving the State for a non-EU country, any amounts withheld would be subject to the relevant tax treaty rules on such payments.