Pearse Doherty (Donegal, Sinn Fein)
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507. To ask the Minister for Finance the estimated revenue that would be raised by increasing the IREF withholding tax to 25%, 30%, 33%, 35% and 40%, respectively. [45097/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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An IREF is an Irish regulated investment fund, or sub-fund where at least 25% of the value of its assets is derived from Irish real estate. As an investment fund, the income and gains of an IREF are not subject to corporation tax or capital gains tax, instead under the IREF regime, a withholding tax ("WHT") at a rate of 20%, is generally applied at the point in time where the value of profits generated within the IREF are passed to a non-resident unit holder. When value passes from the fund to Irish resident investors, investment undertaking tax ("IUT") is generally applied.

In certain circumstances non-resident investors can make a claim to Revenue for the IREF WHT to be refunded or reduced, for example, under the terms of a double taxation treaty.

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

I am advised by Revenue that the yield from changes to the rate of IREF WHT would be dependent on the level of future distributions by IREFs, or other occasions where the value of profits generated within the IREF are passed to a non-resident unit holder. There is no basis available to provide a reliable estimate of such future activity. *However, the Deputy may be interested to note the information published in Table 31 of a Revenue research report which shows information on IREFs for 2019 - 2024 based on returns filed with Revenue.

*Link: www.revenue.ie/en/corporate/documents/research/ct-analysis-2025.pdf

Pearse Doherty (Donegal, Sinn Fein)
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508. To ask the Minister for Finance the estimated revenue raised by applying the IREF withholding tax to REITs instead of the investment undertaking withholding tax; and if he will make a statement on the matter. [45098/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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An IREF is an Irish regulated investment fund, or sub-fund where at least 25% of the value of its assets is derived from Irish real estate. As an investment fund, the income and gains of an IREF are not subject to corporation tax or capital gains tax, instead under the IREF regime, a withholding tax (“WHT”) at a rate of 20%, is generally applied at the point in time where the value of profits generated within the IREF are passed to a non-resident unit holder. When value passes from the fund to Irish resident investors, investment undertaking tax (“IUT”) is generally applied.

In certain circumstances, non-resident investors can make a claim to Revenue for the IREF WHT to be refunded or reduced, for example, under the terms of a double taxation treaty.

The Real Estate Investment Trust (“REIT”) regime was introduced in 2013 to provide a framework for collective investment in Irish property. Its purpose is to allow for a collective investment vehicle that provides a comparable after-tax return to investors to that which would be obtained from direct investment in rental property, by eliminating the double layer of taxation at corporate and shareholder level which would otherwise apply. This double layer of taxation is avoided by providing that REITs are not subject to corporation tax on their rental profits or corporation tax on chargeable gains on any gains that arise from the disposal of rental properties. Instead, provided the REIT distributes at least 85% of its property income, a single layer of taxation is applied at the investor level by means of dividend withholding tax (“DWT”) at 25% on the distributions, as opposed to IUT, which is generally applied to Irish resident investors in investment funds.

Similar to the IREF regime, foreign investors resident in treaty countries may be able to reclaim some of this DWT under the terms of the relevant tax treaty.

Of note, whilst there are similarities between the two regimes, IREF WHT applies to certain non-resident investors (with IUT applying to Irish residents), however, DWT on a distribution from a REIT is applied more broadly to encompass both resident and non-resident investors.

I am advised by Revenue that due to the small number of REITs operating in Ireland (fewer than 10) and Revenue’s obligation to maintain taxpayer confidentiality, it is not possible to provide information on applying IREF WHT to REITs. However, as publicly listed companies, REITs are required to publish information such as annual accounts online, which may be of assistance to the Deputy.

Pearse Doherty (Donegal, Sinn Fein)
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509. To ask the Minister for Finance further to Parliamentary Question No. 284 of 5 February 2025, to outline all circumstances under which the non-resident can make a claim to the Revenue Commissioners for the IREF withholding tax to be reduced under the terms of a double taxation treaty. [45099/25]

Pearse Doherty (Donegal, Sinn Fein)
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510. To ask the Minister for Finance the number of claims to the Revenue Commissioners for the IREF withholding tax to be reduced each year since 2016; the number rejected and accepted; and the withheld tax foregone each year, in tabular form. [45100/25]

Pearse Doherty (Donegal, Sinn Fein)
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511. To ask the Minister for Finance the estimated revenue raised by removing any ability by unit holders of IREF to reduce their withholding tax. [45101/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 509, 510 and 511 together.

In order to counter the use of Irish funds as tax-free vehicles for the development and leasing of Irish property, Finance Act 2016 introduced a tax regime for certain Irish regulated funds that invest in Irish real estate. Up until December 2016, income and gains arising on Irish real estate distributed by certain Irish regulated funds to non-resident investors were outside the scope of Irish taxation. Irish resident investors are generally subject to a separate investment undertakings tax (IUT) at a rate of 41% for individuals and 25% for companies, on distributions received from the fund, and the changes did not impact on the position for Irish resident investors.

The changes in Finance Act 2016 introduced the concept of an Irish real estate fund (IREF). An IREF is a fund or a sub-fund where 25% or more of its assets is derived from real estate assets in the State. With some exemptions, unit holders in an IREF are subject to 20% withholding tax (IREF WHT) on defined IREF taxable events. Certain categories of non-resident investors such as pension funds, life assurance companies and other collective investment undertakings are generally exempt from having IREF WHT applied provided the appropriate declarations are in place, prior to the happening of the IREF taxable event.

In certain circumstances, non-resident investors may reclaim IREF WHT under Double Taxation Agreement (DTA) provisions. Non-resident investors who directly own less than 10% of the units in an IREF can make a claim for a repayment of IREF WHT if they are entitled to a lower rate of withholding tax under a DTA. All such repayment claims must be made within four years from the end of the calendar year in which the tax was deducted. 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 WHT deducted cannot be reduced. Relief under a DTA does not apply at source.

The table below sets out details of the number and quantum of IREF WHT refunds processed by Revenue and the corresponding impact on IREF WHT Tax Receipts. The 'Gross IREF WHT' figure sets out the estimated IREF WHT that would be raised if there was no recourse to refunds of IREF WHT in specific circumstances. However, Ireland has obligations under DTAs and must comply with the protocols that are in force for tax relief.