AIB markets tax avoidance scheme to universities

REVENUE officials have uncovered a complex tax avoidance scheme, which AIB has been marketing to universities.

Under the scheme, rental income from newly built student accommodation, which should have been subject to 42% tax, was diverted to a charitable company, where it was exempt from tax. This means the exchequer has lost millions of euro, while the banks and third-level institutions have made substantial profits.

Internal correspondence from the Revenue describes the tax avoidance scheme as "totally unacceptable" and an "abuse of tax relief". But an AIB spokesperson rejected any allegation of abuse of the tax laws and insisted it was a legitimate scheme they had been operating under the 1999 Finance Act for a year-and-a-half.