Section 110 to be amended to curb ‘aggressive tax practices’

Section 110 was introduced in 1997 with the intention of boosting Dublin’s International Financial Services Centre, allowing for the creation of companies, known as Special Purpose Vehicles which could undertake certain international transactions effectively tax-free. Most of the assets held by these companies were non-Irish.

But according to research by The Sunday Business Post, vulture funds have exploited Section 110 to pay as little as 250 euros a year in tax – prompting widespread public anger.

The proposed amendment, if approved in October, will come into immediate effect from yesterday and is aimed at taxing profits made on Irish home and business loans.

Mr Noonan said: “A number of concerns have been raised recently about the possible use of aggressive tax practices by some Section 110 companies to avoid paying tax on Irish property transactions. In light of these concerns, and due to the highly technical and complex nature of the amendment, I am now publishing a proposed amendment to (the) Section 110 Taxes Consolidation Act 1997.”

He added, “The proposed amendment targets the issues that have been raised and will ensure that the Irish tax base is appropriately protected.”