AIB to pay no corpo tax for 20 years: CEO

AIB will not pay a cent in corporation tax for more than 20 years, despite making €814m profit in the first half of this year.

The situation was branded “an absolute disgrace” by Pearse Doherty of Sinn Féin, who was questioning AIB bosses at the Oireachtas Finance Committee yesterday.

“We have a significant deferred tax asset, which is the guts of €3bn,” said the bank’s CEO, Bernard Byrne. When asked by Mr Doherty as to when he expected the bank to start paying tax on its profits, Mr Byrne said: “In excess of 20 years on a current basis. Yes.”

The anomaly has come about because the bank has a so-called deferred tax asset of €3bn, which under tax and accounting rules allows it to offset previous losses against future tax bills.

In 2009, the then finance minister Brian Lenihan sought to prevent bailed-out banks carrying massive historic losses into the future as assets. However, in 2013, Michael Noonan reversed the rule change.

Responding to Mr Doherty, Mr Byrne sought to defend the deferred tax asset, saying that, without it, AIB’s bailout could have been €3bn bigger — because it was able to count the loss as a tax asset. AIB’s profit for the first half of this year was €814m, effectively tax- free.

Earlier this year, the State sold a 25% stake in the bank, yet taxpayers retain 70% of the bank’s shares.

Mr Doherty told the Irish Examiner that Mr Noonan changed the rules for one reason and one reason only — to make the bank more attractive for sale.

“This is shocking and is a major issue for the taxpayer. This bank will not pay any tax on huge profits,” he said.

Attempts to contact Mr Noonan for comment last night were unsuccessful.


More in this Section

Megan Halvey-Ryan to run half-marathon after scoliosis surgery success

Three people killed as Ireland feels the full force of Storm Ophelia

Government urged to seek emergency cash from EU crisis fund

Schools closed again as building inspections set to begin in earnest


Breaking Stories

Hard to understand what UK wants from Brexit, says Leo Varadkar

Four arrests, including ‘senior leadership figure’, after police searches target UDA

Retired Cork soldier pleads guilty to raping daughter and abusing another daughter

Ireland records second lowest Eurozone inflation in past year

Lifestyle

Remembering the dead: Poignant reason behind Cork’s Zombie Walk

Eight events around Ireland to check out for some frightful fun this Halloween

Massacre at mass on Scariff Island

Ask Audrey: 'It’s like I’m in a horror movie called Revenge of the Norries'

More From The Irish Examiner