Written answers

Thursday, 10 November 2022

Department of Finance

Real Estate Investment Trusts

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

113. To ask the Minister for Finance the assessment his Department has made regarding the significant fall in dividend withholding tax paid by Irish real estate funds in 2021; the proposals his Department is considering to ensure Irish real estate funds are taxed equitably; and if he will make a statement on the matter. [55911/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am aware that there has been a reduction in withholding tax paid by Irish Real Estate Funds (IREFs) in 2021 in respect of taxable events that occurred in accounting periods ended in 2020, relative to the amount paid in the preceding year. Revenue is currently undertaking a review to identify the reason(s) for this change.

I am advised that the initial focus of the review is to analyse the information contained in the 2020 IREF Financial Statements, IREF Withholding tax Returns and Form 1 (IREFs) Income tax returns. The review encompasses the consideration of various risk factors, and a key focus is the identification of cases for compliance interventions to ensure perceived risks are properly and robustly addressed.

The analysis involves detailed examination of tax returns and financial statements for a number of years and will include a review of the transactions undertaken by IREFs and of distributions made, to ascertain if distributions have been treated in accordance with the legislative provisions. If, as part of the review, possible non-compliance with the relevant legislation is identified, Revenue will undertake appropriate compliance interventions. In addition, should any deficiencies in the legislative provisions be identified, they will be brought to the attention of my Department.

Separately and more broadly, the Deputy will be aware that I have welcomed a recommendation of the Commission on Taxation and Welfare in its recently published report, “Foundations for the Future: Report of the Commission on Taxation and Welfare”, to undertake a review of the Real Estate Investment Trust and Irish Real Estate Fund regimes. Both regimes have been part of our property investment ecosystem for a number of years and I believe it is now time to take stock of the impact of both structures on the property market

Accordingly, I intend to commence a review to consider those structures and how best they can continue to support housing policy objectives. The parameters of this review and timelines have yet to be fully decided, but it is expected to commence early in the New Year.

Comments

No comments

Log in or join to post a public comment.