Dáil Éireann Debate, Tuesday - 1 July 2025
264. Deputy Aidan Farrelly asked the Minister for Finance the revenue raised from the dividend withholding tax applied to real estate investment trusts in each of the past ten years, in tabular form; and if he will make a statement on the matter. [35702/25]
View answer266. Deputy Aidan Farrelly asked the Minister for Finance the revenue raised in each of the past ten years from capital gains tax paid by real estate investment trusts, in tabular form; and if he will make a statement on the matter. [35704/25]
View answerI propose to take Questions Nos. 264 and 266 together.
The rules relating to Real Estate Investment Trusts (REITs) in Ireland are contained in Part 25A of the Taxes Consolidation Act 1997. The purpose of the REIT regime is to allow for a collective investment vehicle which provides a comparable after-tax return to investors as direct investment in rental property, by eliminating the double layer of taxation at corporate and shareholder level which would otherwise apply on a property investment via a corporate vehicle.
A REIT is generally exempt from corporation tax on the income and gains from its property rental business, which are instead taxed in the hands of the investor, provided the REIT distributes at least 85% of its property income.
In order to qualify as a REIT, a number of conditions must be satisfied including (but not limited to) the requirement that at least 75% of the aggregate income of the REIT must derive from its property rental business. The residual or non-property rental business is subject to corporation tax in the normal manner.
A further condition is the requirement for the REIT to be listed on the main market of an EU stock exchange within three years of becoming a REIT.
Dividend Withholding Tax (DWT) at the standard rate of 25% is generally deducted by the REIT from dividends paid to shareholders. The DWT is available as a credit against the shareholder’s Irish tax liability.
For Irish investors:
• Individuals are liable to tax at their marginal rates on dividends received, with credit for the DWT deducted;
• Corporates will be liable to tax at 25%, with credit for DWT; and
• Institutional portfolio investors are liable to tax on REIT dividends at 12.5%, this being the rate generally applicable to trading income.
Foreign investors are subject to the DWT at 25%. Those resident in treaty-partner countries may be able to reclaim some of this DWT under the relevant tax treaty. Tax treaty rates on dividends vary from treaty to treaty, but the most common rate applicable to small shareholdings would be 15% - this means that Ireland would retain taxing rights of 15% on dividends paid from Ireland.
In relation to questions 35702/25 and 35704/25, I am advised by Revenue that due to the low number of real estate investment trusts (REITs) operating in Ireland and Revenue’s obligation to observe confidentiality, it is not possible to provide the data requested.
Further detail is available in Revenue’s Statistical Disclosure Control Protocol, published on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/about/statistical-disclosure-control.aspx
