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 Header Item Financial Resolution No. 4: Stamp Duties - Rates (Continued)
 Header Item Financial Resolution No. 5: Stamp Duties
 Header Item Financial Resolution No. 6: Capital Gains Tax - Exit Tax

Tuesday, 8 October 2019

Dáil Éireann Debate
Vol. 987 No. 4

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Deputy Danny Healy-Rae: Information on Danny Healy-Rae Zoom on Danny Healy-Rae Vótáil.

(Interruptions).

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher We are moving on.

Deputy Sean Sherlock: Information on Seán Sherlock Zoom on Seán Sherlock With respect, I heard a Deputy say "Vótáil".

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher In future, I ask Deputies not to be so shy. I did not hear the Deputy in question. I thank Deputy Sherlock for his assistance. Will the Deputies claiming a division please rise?

  Deputies Joan Collins, Michael Collins, Michael Fitzmaurice, Seamus Healy, Danny Healy-Rae, Thomas Pringle, Eamon Ryan and Peadar Tóibín rose.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher As fewer than ten Members have risen, I declare the question carried. In accordance with Standing Order 72, the names of the Deputies dissenting will be recorded in the Journal of the Proceedings of the Dáil.

  Question declared carried.

Financial Resolution No. 5: Stamp Duties

Minister for Justice and Equality (Deputy Charles Flanagan): Information on Charles Flanagan Zoom on Charles Flanagan I move:

(1) THAT, for the purposes of stamp duty charged by virtue of the Stamp Duties Consolidation Act 1999 (No. 31 of 1999), that Act be amended by the insertion of the following section after section 31C:
“Cancellation schemes of arrangement 31D.
(1) In this section—
‘Act of 2014’ means the Companies Act 2014;

‘agreement’ includes any arrangement, contract, compromise, understanding, scheme, offer, transaction or series of transactions;

‘company’ means a company formed and registered under the Act of 2014 or an existing company within the meaning of that Act;

‘registrar’ has the same meaning as it has in the Act of 2014;

‘scheme order’ has the same meaning as it has in Chapter 1 of Part 9 of the Act of 2014.
(2) Where—
(a) there is an agreement to effect the acquisition of a company (in this section referred to as the ‘target company’),

(b) the target company enters into an arrangement—
(i) That has become binding in accordance with section 453 of the Act of 2014, and

(ii) in accordance with which there is a cancellation of shares in the target company pursuant to Chapter 4 of Part 3 of that Act,
and

(c) the shareholders of the target company receive consideration for the cancellation of those shares held by them,
the agreement referred to in paragraph (a) shall be—
(I) chargeable with the same stamp duty as if it were a conveyance or transfer on sale of those shares, and

(II) deemed to be executed on the date on which a copy of the scheme order relating to the arrangement is delivered to the registrar in accordance with section 454 of the Act of 2014.
(3) Where subsection (2) applies, the consideration for the purpose of charging stamp duty shall be the consideration received by the shareholders of the target company for the cancellation of shares held by them.

(4) For the purposes of this Act, the accountable person shall be the person paying the consideration for the cancellation of the shares by the shareholders of the target company.”.
(2) THAT paragraph (1) of this Resolution shall apply in relation to a scheme order (within the meaning of Chapter 1 of Part 9 of the Companies Act 2014 (No. 38 of 2014) made on or after 9 October 2019.

(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

  Financial Resolution No. 5 agreed to.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher Financial Resolutions Nos. 6, 7 and 8 may be discussed together.

Financial Resolution No. 6: Capital Gains Tax - Exit Tax

Minister for Housing, Planning and Local Government (Deputy Eoghan Murphy): Information on Eoghan Murphy Zoom on Eoghan Murphy I move:

(1) THAT section 627 of the Taxes Consolidation Act 1997 (No. 39 of 1997) be amended, as respects disposals deemed to have been made (that is to say, deemed to have been made by virtue of subsection (2) of that section) on or after 9 October 2019—
(a) in subsection (2)—
(i) by inserting “or, in the case of paragraph (c), at the time specified in subsection (2A)” after “event concerned”, and

(ii) by deleting “, being a company that is resident in a Member State (other than the State),” in paragraphs (a) and (b),
and

(b) by inserting the following after subsection (2):
“(2A) Notwithstanding anything in subsection (2), as respects the event referred to in paragraph (c) of that subsection, the time immediately before the company referred to in that paragraph ceases to be resident in the State is to be taken as the time at which the company shall be deemed to have disposed of all its assets (other than assets excepted from that paragraph by subsection (6)) and to have immediately reacquired them at their market value.”.
(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Financial Resolution No. 6 provides for two necessary amendments to the anti-tax avoidance directive, ATAD, exit tax regime for companies introduced last year in budget 2019, in line with our commitments under the directive. The exit tax provision imposes a charge to tax at the rate of 12.5% on unrealised gains arising where a company migrates its residence or transfers its assets offshore such that it leaves the charge to Irish tax.

  The first amendment relates to a potential avoidance opportunity identified by Revenue whereby it could be argued that the exit tax charge arising on the migration of a company's residence could not be imposed by Ireland as the company is no longer resident in Ireland when the exit tax event occurs. This argument is clearly not within the spirit of the ATAD, but could be used to circumvent the charge to exit tax. The amendment puts beyond doubt the application of the exit tax charge in such cases.

  The second amendment corrects a transposition error which was noted following enactment of the Finance Act 2018 and brings the provision fully in line with the provisions of the anti-tax avoidance directive. In order to provide certainty and to avoid creating a window of opportunity for avoidance transactions, these amendments will apply from budget night. These amendments will be placed on a permanent statutory footing in the forthcoming finance Bill.

  Financial Resolution No. 7 provides for several amendments to the Irish real estate fund, IREF, regime. An Irish real estate fund is an investment undertaking other than undertakings for collective investment in transferable securities, UCITS, where 25% or more of the value of that undertaking is made up of an Irish real estate asset. The tax framework for IREFs was introduced in the Finance Act 2016 to address concerns that had been raised regarding the use of funds to avoid the responsibility to pay tax where Irish property is concerned.


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