€218bn in losses to be recovered before corpo tax paid

Banks and other large corporations have a staggering €218bn in losses to recoup before they have to pay any corporation tax, it has been revealed.

€218bn in losses to be recovered before corpo tax paid

After it emerged that AIB would not have to pay any corporation tax for 20 years because of the losses accrued during the 2008 financial crash, the Dáil’s Public Accounts Committee (PAC) heard evidence yesterday from the Revenue Commissioners.

The PAC was told that of the €218bn in losses that can be carried over and offset against tax, €124bn of that related to the banks and other financial institutions.

PAC chairman Seán Fleming asked officials from the Revenue Commissioners and the Department of Finance whether a sunset clause had ever been considered.

He also asked had they thought about how a ceiling on how much tax relief could be applied.

“This is probably not fair to the taxpayer. I think a ceiling and a sunset clause should be considered in the interest of the State,” he said.

“It is not good for a country to have such losses in the hands of such a small group of companies.”

Finance officials appearing before the committee said such measures were not in keeping with international norms and have not yet been considered. It was then pointed out that the UK has a €5m ceiling above which a lower rate of relief applies.

The committee also heard that the Government expects the final disputed tax bill that the European Commission ordered it to collect from Apple to be close to the €13bn estimated.

“It’s in that ballpark,” Revenue chairman Niall Cody told the PAC when asked if the bill his office is obliged to calculate will be in line with the record EU estimate, which both Dublin and Apple are appealing.

“Over 95% of the calculations are completed and we have agreed with the Commission that all our calculations will be with them before the end of April.”

Payments into Ireland from Apple should commence from the beginning of April, the committee heard.

Earlier at the committee, it emerged that “relatively few” of the 175,000 companies registered in Ireland pay corporate tax due to a series of gaps and complex rules within the tax system.

The director of public policy and taxation at Chartered Accountants Ireland, Brian Keegan, confirmed that almost a third of Ireland’s top 100 firms pay the official 12.5% corporate tax rate — with 10 of the top 100 paying 66% of the total corporate tax figure.

Mr Keegan — who last week gave the PAC a separate private breakdown of Irish corporate tax issues — said just over 175,000 companies are registered in this country.

Under questioning from Social Democrats TD Catherine Murphy, Mr Keegan said that while the 12.5% official corporate tax rate applies across the board, differences in how it legally affects individual companies means “relatively few companies in Ireland pay it and those that do pay small amounts”.

The independent figures came after Revenue Commissioners chairman Niall Cody and Department of Finance officials told the PAC last November that eight of the 100 most lucrative Irish-based multi-nationals are effectively paying no corporation tax, five have a tax bill under 1%, and others are using loopholes to be paid by the State.

Despite accepting the figures, Mr Cody and Department of Finance officials defended the current tax system, with Mr Cody insisting: “I don’t believe Ireland is a tax haven.”

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