Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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86. To ask the Minister for Finance whether he is aware of any other EU member state or comparable OECD jurisdiction that operates a deemed disposal or equivalent forced realisation taxation mechanism on unrealised gains in Exchange Traded Funds or equivalent collective investment products held by individual retail investors; if so, to identify those jurisdictions; if not, whether he considers it appropriate that Ireland operates a taxation mechanism with no equivalent in comparable economies; and if he will make a statement on the matter. [17598/26]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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87. To ask the Minister for Finance whether his Department has conducted any comparative analysis of the taxation treatment of Exchange Traded Fund investments by individual retail investors across EU member states; whether such analysis informed the decision to retain the deemed disposal regime in recent budgets; whether this analysis has been published; and if he will make a statement on the matter. [17599/26]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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88. To ask the Minister for Finance whether he accepts that Ireland's deemed disposal regime, which imposes a 41% tax on unrealised gains in EU-domiciled Exchange Traded Funds every eight years with no provision for loss relief against other income, represents a materially more punitive taxation environment for retail investors in collective funds than that which applies in any comparable EU member state; and if he will make a statement on the matter. [17600/26]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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89. To ask the Minister for Finance the reason the exit tax rate applicable to gains on Exchange Traded Funds and other collective investment undertakings subject to deemed disposal is set at 41%, exceeding the 33% capital gains tax rate applicable to direct shareholdings and other assets; whether he considers it appropriate that an individual who invests in a diversified EU-regulated fund product is taxed at a higher rate on gains than an individual who invests directly in equities; and if he will make a statement on the matter. [17601/26]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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90. To ask the Minister for Finance the reason losses arising on Exchange Traded Funds and other collective investment undertakings subject to the deemed disposal regime cannot be offset against gains on other assets or against other income for the purposes of income tax; whether he considers this prohibition on loss relief to be equitable relative to the treatment of losses on direct equity investments under the capital gains tax regime; whether he has received any advice from the Tax Strategy Group or Revenue on the rationale for this asymmetry; and if he will make a statement on the matter. [17602/26]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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92. To ask the Minister for Finance whether he has considered introducing a provision allowing losses realised under the deemed disposal regime on Exchange Traded Funds to be offset against capital gains tax liabilities on other assets; the estimated cost to the Exchequer of such a provision; and if he will make a statement on the matter. [17648/26]

Simon Harris (Wicklow, Fine Gael)
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I propose to take Questions Nos. 86, 87, 88, 89, 90 and 92 together.

Section 58 of Finance Act 2000 introduced the gross roll-up taxation regime for investments in domestic funds. While Finance Act 1990 had introduced anti-avoidance rules that are known as the “offshore funds” regime, Finance Act 2001 (in section 72) amended the offshore funds regime to provide for gross roll-up in certain offshore funds that were similar to the Irish funds within the gross roll-up regime.

There is no separate taxation regime for Exchange Traded Funds (“ETFs”). As collective investment funds, they generally fall within the gross-roll up regime applicable to regulated domestic and offshore funds.

The general thrust of the gross roll-up regime is that there is no annual tax on income or gains arising within the investment. However, IUT or exit tax as it is commonly known must be deducted on the occurrence of a “chargeable event”, which generally includes instances where value passes from the fund to the investor or on a deemed disposal every 8 years.

Finance Act 2006 introduced the above-mentioned eight-year deemed disposal rule for all investments that benefit from the gross roll-up regime. This amendment was designed specifically to prevent the avoidance of tax by way of indefinite deferral of tax under the gross roll-up regime. This ensures that income isn’t being rolled up in funds without being taxed. On the ultimate disposal of the investment, any tax paid which arose as a result of a deemed disposal is allowed as a credit against any final tax liability on disposal.

Exit tax is withheld by the investment fund where there is a gain on the happening of a chargeable event. However, for certain investment funds where the units are held on a recognised clearing system, such as the case with ETFs, the fund is not required to deduct exit tax and the investor must self-assess the tax due. Whether the investment fund accounts for exit tax or that tax is collected through self-assessment, the amount of the gain is subject to tax at a rate of 38% for individuals, or 25% if the investor is a company (a higher rate can apply where the investment fund is a personal portfolio investment undertaking).

The rates of exit tax applicable to ETFs (and other investment funds) may be distinguished from the rates applicable to income and gains from other investment products, such as direct investment in equities or property, due to the availability of the gross roll-up regime, where the income and gains can roll-up tax free within the investment fund and given the fact that tax is applied to a combination of both the income and gains from the underlying investments in the investment fund.

Loss relief is not available in respect of losses arising on disposals of units in ETFs which are subject to the gross-roll up regime. IUT is not a tax on investors, but on the fund itself and the fund is required to compute the tax, deduct the tax and return it to Revenue. Irish tax legislation specifically provides that IUT is a liability of the fund. Therefore, as the investor is not taxed on the gain arising on a chargeable event, the investor is accordingly not entitled to relief in respect of losses arising.

ETFs are not subject to a harmonised system of taxation at EU level. While ETFs are commonly established under the UCITs regulatory framework, taxation of investors and funds remains a matter for individual Member States. As such, the tax regimes applicable to the taxation of ETFs varies across Member States, and across OECD members.

The EU Savings and Investments Union aims to create better financial opportunities across the EU, providing people with more opportunities to invest and provide for their current and future prosperity. The project also aims to deepen the pools of capital available for investment in businesses across Europe, grow the European economy and benefit our strategic objectives. In March last year, the European Commission launched the SIU Strategy, which included a number of measures to advance the Capital Markets Union project. In September 2025, the European Commission adopted a Recommendation on increasing the availability of Savings and Investment Accounts in Member States which would facilitate participation in capital markets, including investments in ETFs. This Recommendation is being considered as part of the work underway to set out an approach to the taxation of retail investment which will be published in the coming months.