Pearse Doherty (Donegal, Sinn Fein)
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284. To ask the Minister for Finance the total direct taxation raised from the investments funds sector in 2023; and if he will make a statement on the matter. [3057/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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There are a range of collective investment vehicles within the investments funds sector, and I am advised by Revenue that it is not possible to separately identify the tax associated with that sector.

However, the aggregate amounts of taxes paid by entities within the investment funds sector, and other entities within the financial and insurance sectors for 2023 is contained in a statistical publication, entitled ‘Revenue net receipts by Sector’, which is available on the Revenue website:

www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-sector.aspx.

By way of information for the Deputy, Irish collective investment vehicles (investment funds), which are authorised and regulated by the Central Bank of Ireland, are generally taxed under the gross roll-up regime. This means that the investment undertaking is exempt from tax on the profits it earns on behalf of its unit holders. The profits are allowed to grow on a tax free basis within the fund and are taxed at the level of the investor rather than the fund, as is standard international practice.

Under the gross roll-up regime, investment undertakings are subject to Investment Undertaking Tax (“IUT”). This tax is deducted at source by the investment undertaking and paid over to Revenue on behalf of the unitholder. The amount of exit tax to be deducted is calculated by applying a rate of tax to the gain arising on the chargeable event. One example of a chargeable event that would give rise to IUT is the making of a distribution to a unitholder. In general, IUT does not apply to non-resident investors provided the relevant declarations are in place with the investment undertaking.

Irish Real Estate Funds (“IREFs”) are collective investment undertakings where 25% or more of the value of their assets is derived from real estate in the State. These special types of investment fund have a specific withholding tax applied such that unit holders in an IREF are subject to IREF withholding tax at a rate of 20% on payments made to them by the IREF. As with IUT, the IREF withholding tax is deducted by the IREF and paid to Revenue on behalf of the unit holder. Unlike IUT, non-resident unit holders are also be subject to IREF withholding tax. In some circumstances the non-resident can make a claim to Revenue that the IREF withholding tax can be reduced under the terms of a double taxation treaty. However, if a unit holder in an IREF holds more than 10% of the assets of the IREF, any payment from the IREF will be regarded as from immoveable property and the IREF withholding tax deducted cannot be reduced.

In addition to a 20% IREF withholding tax on distributions, Finance Act 2019 introduced a charge to income tax at the level of the IREF in certain circumstances in order to prevent the use of excessive debt and other payments to reduce distributable profits as an anti-avoidance measure.

For both the gross roll-up regime and the IREF regime, certain categories of investors such as pensions schemes, companies carrying on life business and charities are exempt from IUT and IREF withholding tax provided the appropriate declarations are in place. This exemption is provided as these categories of investor are more generally tax exempt.

Pearse Doherty (Donegal, Sinn Fein)
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285. To ask the Minister for Finance the total number of funds domiciled in Ireland; the total number of funds domiciled and under administration in Ireland; and if he will make a statement on the matter. [3058/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am informed by the Central Bank of Ireland that, as of September 2024, there were 9,041 funds domiciled in Ireland. The total number of funds under administration in Ireland, including non-Irish funds, is 13,926. The Central Bank has advised that it is not possible to provide a breakdown of these figures by funds domiciled and under administration in Ireland within the time available. However, arrangements will be made to provide the information to the Deputy as soon as this analysis has been completed.

Building on a strong initial offering of fund administration and fund servicing, Ireland has now developed into a global centre of excellence for the funds and asset management industry. Ireland is the second largest domicile for regulated investment funds in the EU and is the market leader for both Exchange Traded Funds (ETFs) and Money Market Funds (MMFs) in Europe. The funds and asset management sector in Ireland directly employs around 19,500 people throughout the country who provide a range of specialist services and activities across the funds ecosystem.

The Funds Review Report, published in October 2024, recognises Ireland’s potential to benefit from continued growth in the funds and asset management sector. It sets out a series of recommendations to ensure that, in pursuit of this growth, Ireland’s funds sector framework remains resilient, future-proofed, supportive of financial stability and a continued example of international best-practice.

Finally, the recently published Programme for Government includes a commitment to progress and publish an implementation plan taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow the funds sector in Ireland.