Bankers Federation welcomes provisions in Finance Bill

The leading representative body for the banking sector in this country, the Irish Bankers Federation (IBF) has welcomed the inclusion in today’s Finance Bill of a new regime for the taxation of dividends received by companies here from non-resident companies.

The federation views this change as an important step in making Ireland an important location for holding companies to be located.

To date, Irish companies have been taxed at 25% on dividends received from non-resident companies, with a credit for foreign tax. But most countries with whom Ireland competes for mobile financial services projects exempt foreign dividends from corporation tax.

While this country’s credit system frequently produces the same result of no additional tax, there is significantly greater administration, complexity and uncertainty such that companies can find it more attractive to locate their holding companies outside the state.

The IBF believe this measure will better attract headquarters and holding company operations to these shores, with consequent add-on value to the wider economy in terms of business activity and employment.

The IBF will closely examine today’s Bill including new provisions on VAT and property which could increase the cost of leasing buildings for businesses that have only partial VAT recovery.

The Irish Banking Federation currently represents over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.