Emer Currie (Dublin West, Fine Gael)
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617. To ask the Minister for Finance the total receipts from exit tax on domestic funds over the past eight years, including any breakdown of the type of funds being taxed; and if he will make a statement on the matter. [21112/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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There are a range of collective investment vehicles within the investments funds sector. Irish collective investment vehicles (investment funds), which are authorised and regulated by the Central Bank of Ireland, generally operate under what is known as the “Gross Roll-Up” regime. This means that monies invested in such funds can grow on a tax-free basis within the fund. Taxation only occurs at the level of the investor upon receipt of distributions from the fund. This is standard international practice for collective investment funds.

To ensure that the appropriate tax is collected from Irish residents, funds are generally obliged to operate an exit tax regime, which means that the fund deducts the appropriate tax from the distribution to the Irish resident investor and remits the tax deducted to Revenue on behalf of the unitholder. The exit tax deducted by Irish regulated funds under the Gross Roll-Up Regime is called Investment Undertaking Tax (“IUT”). In general, IUT does not apply to unit holders who are non-resident provided that the relevant declarations are in place with the investment undertaking, and the taxation of such investors, if any, is a matter for their country of residence.

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 subject to IREF withholding tax.

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 pension 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.

I am informed by Revenue that exit tax on domestic funds is returned in three ways:

• Life Assurance Exit Tax (LAET)
• Investment Undertaking Tax (IUT)
• Form 11 Returns (Individuals account through their Form 11, for exit tax on the happening of a chargeable event in respect of offshore funds and certain Irish funds that could not have deducted exit tax, such as Irish Exchange Traded Funds where the chargeable event is the sale of the share on a stock exchange).

** The estimate of Income Tax is derived by multiplying the reported gains relating to Offshore Funds in Panel F, row 322, in Form 11 regarding Gains taxable at 41%.

*** 2024 income tax amounts are not yet available.

**** All estimates are provisional and may be subject to revision in, particularly 2023 Income Tax and 2024 IUT amounts.