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

353.To ask the Minister for Finance the estimated revenue raised by introducing a 25% or 50% cap, respectively, on corporation tax relief utilised in a single year by NAMA-participating banks, in first- and full-year terms, and had it been introduced in the years 2022 and 2023. [32138/24]

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

354.To ask the Minister for Finance the estimated revenue raised by introducing a 25% or 50% cap, respectively, on corporation tax relief utilised in a single year by all banks, in first- and full-year terms, and had it been introduced in the years 2022 and 2023. [32139/24]

Jack Chambers (Dublin West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 353 and 354 together.

As the Deputy is aware, loss relief for corporation tax is a long-standing feature of the Irish corporate tax system and a standard feature of corporation tax systems in most OECD countries. It recognises the fact that a business cycle runs over several years and that it would be unfair to tax income earned in one year and not allow relief for losses incurred in another. Loss relief works by allowing a deduction for losses incurred in one accounting period against profits earned in another period.

The value of these tax losses to the State is realised through share sales. The banks’ share prices recognise a certain value for the tax losses and, as such, the State receives value for the balance of tax losses as share sales are completed.

I am advised by Revenue the estimated revenue raised by introducing a 25 percent and 50 percent cap, respectively, on corporation tax loss relief utilised in a single year by NAMA participating banks and all banks would be dependent on the profitability of the banks in any particular year and the amount of losses available to the banks. Having regard to its confidentiality obligations under section 851A of the Taxes Consolidation Act, 1997, Revenue is not able to provide a breakdown between NAMA participating banks and all banks.

The estimated amount that would have been raised in 2022 is presented in the table below:

It is not possible to provide data for 2023 as most banks have not yet submitted their tax returns, which for most are due on 23rd September 2024.

In 2018, Department of Finance officials produced a detailed technical note for the Committee on Finance, Public Expenditure and Reform and Taoiseach on the subject of both bank losses and corporation tax losses more generally (see ). The technical note considered in some detail the potential implications of restricting the use of losses carried forward, or the introduction of a specific time limit or “sunset clause” on loss relief, for Irish banks, for the wider banking sector, or for the corporate sector as a whole.