The State is being deprived of “very valuable” funds because of companies in control of billions of euro using charities to avoid paying taxes, the Dáil has heard.
Social Democrats TD Stephen Donnelly said charitable status should not be available to hedge funds or special purpose vehicles.
He outlined how a mortgage company called Mars Capital had bought up distressed debts of thousands of Irish borrowers.
Mars Capital’s accounts show that for an investment of €80m, the company expects to see a return of almost €400m, the TD said, amounting to over €300m in profits.
The profits from buying the distressed loans needed to be taxed, he said. Instead, the money would be paid to an “unknown company in an unknown location”.
He said Mars Capital’s first year figures showed they made €14m in revenue, but after making payments to this “unknown location”, their tax last year amounted to just €250.
The TD said Mars Capital had three shares which were owned by charitable trusts, each called Badb, Eurydice, and Medb.
These three trusts were controlled by corporate law firm Matheson, which works for companies doing business “in and through Ireland”.
All three of the trusts have charitable status and so are tax exempt. All three owned a lot of companies here, including Mars Capital, the Dáil heard.
“We know that the companies that the charities control have billions of euro in assets,” Mr Donnelly said. But he also asked: “Why are Irish charities being made the shareholders of firms that are legally avoiding paying their taxes in Ireland?”
The Wicklow TD’s
comments came as the Government accepted proposals to strengthen the regulation of charities but questioned calls for one single agency to tackle corruption.
Tánaiste Frances Fitzgerald said enhanced powers were being made available to the charities regulator in September.
In total, the charities regulator is working with in excess of 12,500 charitable organisations. It has received around 300 concerns raised against 132 entities, the majority of which were charities, the Dáil was told during a debate about the regulation of charities.
The Social Democrats and the Green Party want improved powers to regulate charities.
While the minority government is prepared, in principle, to accept the recommendations, Ms Fitzgerald raised questions about calls for an overall agency to tackle corruption.
© Irish Examiner Ltd. All rights reserved