Michael Noonan confirms plans to amend controversial tax loophole used by funds
Vulture funds registered in Ireland have gathered around €300 billion in assets, with only a fraction liable for tax here, it has been revealed.
Central Bank chief economist Gabriel Fagan told TDs at the Dáil’s new budget oversight committee that "significant progress" had been made in measuring the activities of these firms.
"We have carried out a major data collection exercise on special purpose vehicles, covering an area of the balance sheet of these entities of maybe €300 billion," he said.
Mr Fagan added that the bank was only "starting to try to get to grips with what exactly is going on" in the sector.
Under section 110 of the 1997 Finance Act, many funds pay little or no tax on profits made from the sale of Irish assets.
The news came as Minister for Finance Michael Noonan announced plans to amend the controversial tax loophole.
Mr Noonan today confirmed his intention to clamp down on misuse of section 110, while keeping it open for its intended purpose in the IFSC.
"A number of concerns have been raised recently about the possible use of aggressive tax practices by some section 110 companies to avoid paying tax on Irish property transactions,” he said.
"In light of these concerns, and due to the highly technical and complex nature of the amendment, I am now publishing a proposed amendment to section 110.
"The proposed amendment targets the issues that have been raised and will ensure that the Irish tax base is appropriately protected.
"Further targeted proposals in relation to the use of funds in the Irish property market are also being considered."