In a speech on 22 March 2023, the Irish Minister for Finance provided an update on the long awaited review of the taxation of investment products, Real Estate Investment Trusts (REITs), Irish Real Estate Funds (IREFs) and section 110 companies.
He confirmed that officials in the Department of Finance are currently finalising the parameters for these reviews and noted that stakeholder consultations will be a feature.
The reviews, which were announced in October 2022, are being closely monitored by investment managers and investors. In each case, there is scope for simplification and clarification of these areas.
Historically, the issue of IREFs and REITs has been the subject of political controversy, but the sector has persisted to make a meaningful contribution to the Irish property market. The industry will be hoping this recognition is reflected in a simplification of the regime.
Section 110 companies are now predominantly used in the structured finance space for international capital markets transactions and related transactions. These entities are within the scope of recent EU law changes which restrict the deductibility of interest. However, they remain subject to pre-existing Irish anti-avoidance provisions which are aimed at the same point. There is an obvious overlap between domestic and internationally derived provisions which could be aligned.
The release of the consultation documents is expected shortly and Maples Group's Irish tax team will be actively involved through Irish industry groups in the consultation.
I know these are issues that are of interest to attendees here this morning, officials in my department are currently finalising the parameters for these reviews, and stakeholder consultations will be a feature of the reviews, as they progress.