Sinn Féin spokesperson on Finance Pearse Doherty TD has called on the Minister for Finance to undertake an urgent review of the tax status of Section 110 companies, or vulture funds.
His comments come following reports that three such funds connected to Goldman Sachs paid no corporation tax in 2019 despite collecting €390 million from their portfolios in the same year.
Teachta Doherty said:
“It was reported by Mark Paul in the Irish Times this morning that three vulture funds connected to Goldman Sachs paid no corporation tax in 2019 despite collecting €390 million from their portfolios in the same year.
“For years, Fine Gael have allowed vulture funds buying up distressed mortgages to engage in aggressive tax avoidance and reduce their tax liabilities to zero, despite making huge profits.
“This has resulted in a huge loss of revenue to the Irish public.
“In October 2016, I made a submission to then Finance Minister, Michael Noonan, on the operation of these Section 110 companies and changes that should be made to end the tax avoidance practices that had been facilitated by Fine Gael.
“In 2019, some changes were made, responding to my submission, that restricted the ability of these funds to write off taxable income against certain interest payments.
“These changes came into effect in 2020, however, we need to assess how effective they have been in tackling aggressive tax avoidance by vulture funds.
“Serious gaps remain and have been allowed to remain by government.
“For example, over two years from 2018 to 2019, a subsidiary of vulture fund Cerberus, called Promontoria Oyster DAC, was able to reduce its tax liability by €27 million by writing off its income against asset management fees.
“It just so happens that these fees were paid to a company affiliate in the Netherlands.
“The tax code of vulture funds continues to allow them to use complex company arrangements to reduce their tax liabilities against the interests of the Irish taxpayer.
“The Minister for Finance should review their tax structure, and the gaps that continue to exist, and close them down.”