Dáil Éireann Debate, Tuesday - 1 July 2025
265. Deputy Aidan Farrelly asked the Minister for Finance the revenue raised from the dividend withholding tax applied to Irish real estate funds in each of the past ten years, in tabular form; and if he will make a statement on the matter. [35703/25]
Amharc ar fhreagra267. Deputy Aidan Farrelly asked the Minister for Finance the revenue raised in each of the past ten years from capital gains tax paid by Irish real estate funds, in tabular form; and if he will make a statement on the matter. [35705/25]
Amharc ar fhreagraI propose to take Questions Nos. 265 and 267 together.
The Irish Real Estate Fund (“IREF”) regime was introduced by Finance Act 2016 and amended by Finance Act 2017 to address concerns over the use of collective investment vehicles by certain non-resident investors to minimise their exposure to Irish tax on Irish property transactions. IREFs are Irish funds, or sub-funds where the fund is an umbrella scheme, where at least 25 per cent of the value of the assets held by the fund is derived from Irish real estate assets (subject to certain exclusions).
IREFs are not subject to capital gains tax or dividend withholding tax. The tax code provides that the funds are subject to an IREF Withholding Tax (WHT) at a rate of 20% on distributions and redemptions to non-resident investors. Where appropriate declarations are in place, the legislative provisions exempt from IREF WHT, certain categories of investors such as life assurance companies, pension funds, investment undertakings and their EEA equivalents, charities, credit unions and Section 110 companies.
In addition to a 20% IREF WHT on distributions, a charge to income tax at the rate of 20% at the level of the IREF to counter the use of excessive debt and other payments to reduce distributable profits applies since the anti-avoidance measures were introduced in the Finance Act 2019. The three anti-avoidance measures introduced in the Finance Act include (i) a debt cap, to limit excessive leveraging and resulting interest, (ii) a property financing cost ratio, to limit excessive interest rates, and (iii) a “wholly and exclusively” test to limit excessive expenses.
The following table sets out the gross level of IREF Withholding Tax and Income Tax paid since the introduction of the IREF regime and subsequent measures.
Gross IREF WHT and Income Tax charge paid in the respective years
|
For Accounting Periods Ending 1st January to 31st December |
Year IREF Tax Paid |
Gross amount of IREF WHT deducted (€m) |
Income Tax Charge (€m) |
Total Gross IREF WHT Tax Deducted & Income Tax Charge Paid (€m) |
|
2017 |
2018 |
8.3 |
N/A |
8.3 |
|
2018 |
2019 |
28.5 |
N/A |
28.5 |
|
2019 |
2020 |
65.7 |
6.4 |
72.1 |
|
2020 |
2021 |
36.8 |
17 |
53.8 |
|
2021 |
2022 |
30.9 |
12.2 |
43.1 |
|
2022 |
2023 |
27.6 |
10 |
37.6 |
|
2023 |
2024 |
20.7 |
11.2 |
31.9 |
|
Total |
|
218.5 |
56.8 |
275.3 |
