Dáil Éireann - Volume 535 - 03 May, 2001

Written Answers - Non-resident Companies.

43. Mr. McDowell asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress being made regarding the regularisation of the position of Irish-registered non-resident companies; the number of such companies still registered here; the number of companies which have been struck off the register; if she has satisfied herself that these companies are not being used for criminal purposes; and if she will make a statement on the matter. [12192/01]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy): The package of taxation and company law measures introduced by us in 1999 and 2000 to address problems arising from the use of Irish registered non resident companies – IRNR's – for undesirable purposes, provide that all companies have to be linked more closely to the State and interface more fully with the Revenue Commissioners and the Registrar of Companies, in compliance with a range of new requirements in company and taxation law.

The key change is in the taxation area as a result of which all companies registered under the Companies Acts are now regarded as being resident in the State for tax purposes, except for companies meeting specific criteria specified in the Finance Act, 1999. The effect of this is that the IRNR structure is no longer generally available. Going forward, therefore, only companies meeting Revenue's criteria can qualify for the IRNR status under the 1999 Finance Act.

In relation to the position of companies in existence prior to the coming into operation of the new measures Revenue has written to approximately 80,000 such companies. These are companies which are incorporated in the State but which had not made contact with Revenue for the purposes of registering for tax.

Approximately 35,000 of these companies have been struck off the Companies Office register, either voluntarily or on foot of that Office's procedures. 1,100 companies have been struck off the register following notification, under the 1999 Finance Act provisions, to the registrar by Revenue that the companies had failed to furnish Revenue with the required information. In addition, Revenue has recently forwarded to the registrar a further list of 7,000 companies which have failed to furnish Revenue with information. The registrar has commenced strike-off proceedings against these companies.

Approximately 16,500 companies have registered for tax while 6,000 companies have given the required information to Revenue but have indicated that they have not commenced trading. [1019] The position of the remaining companies remains under consideration by Revenue.

There is no information available in the Companies Office on the number of IRNR's. Essentially, an IRNR is a company which is incorporated in Ireland under Irish company law but which is not deemed to be resident here for tax purposes because it qualifies for the exceptions provided in the 1999 Finance Act. Consequently, Revenue alone determines which companies incorporated under the Companies Acts qualifies for IRNRs status under the 1999 Finance Act.

Last year, 41,217 companies in total were struck off the register in comparison to 37,850 companies struck off in 1999. The number of companies struck off the register in the first four months this year, was 2,521.

While I have seen newspaper reports in recent months in relation to alleged illegal activity by IRNRs, our Department has no direct involvement in any of these cases. It was the potential damage, which such activity had that prompted the Government to take the measures that I have already described and which have so far borne the results outlined.

I assure this House that the current legislative measures will continue to be effectively enforced through the ongoing co-operative efforts on the part of Revenue and the Registrar of Companies and the Office of the Director of Corporate Enforcement, when established, to ensure that the IRNR problem is eliminated over time.