New measures aim to make Irish finance industry more attractive
Published in Irish Times and Irish Times.com
February 9, 2012
IFSC: THE GOVERNMENT has introduced a package of 21 measures in the Finance Bill to help improve the attractiveness and competitiveness of the international financial services industry.
The Minister for Finance Michael Noonan has said that any one of the measures on their own would not have a major effect but taken together they would help improve the industry in Ireland.
He described the measures as “small, nuancing adjustments” to the attractiveness of the financial services industry package.
“They certainly will give a boost to the attractiveness of the financial services sector and we would hope they would lead to the creation of jobs,” said the Minister.
Most of the measures were aimed at simplifying how complex financial transactions are treated for tax purposes to make it easier to do business in Ireland, he said.
Among the measures are a reduction in double taxation in the corporate treasury and aircraft leasing sectors, enhancing the tax regime for Islamic finance, which was introduced in the 2010 Finance, and allowing Irish structured finance companies to invest in “forest carbon credits” to support the “Green IFSC” initiative.
The Government is also introducing changes to ease the administrative burden in relation to non-resident investors in Irish investment funds and extending relief for losses in groups to their companies outside the European Union and the European Economic Area.
The measures also address tax issues for investment funds arising from the UCITS IV EU directive introduced last July which allows funds to operate across the EU with authorisation from one state.
Accountants Deloitte said that the measures would allow financial services firms to expand their business in a competitive market.
“There are no major new initiatives that will impose a cost on the Exchequer,” said Deirdre Power, a partner at Deloitte. “Nonetheless, all the measures make it easier to do financial services business in Ireland.”
Fianna Fáil finance spokesman, Michael McGrath TD, welcomed some measures in the Finance Bill, including the moves to support the financial services sector, but said that overall the proposals lacked ambition and had “a distinct lack of creative thinking”.
The Government announced a strategy last July to create 10,000 jobs in the financial services industry over the next five years.
There are more than 30,000 employees working in the International Financial Services Centre in Dublin, while financial services accounts for about 7 per cent of GDP and 10 per cent of staff in multinationals based in Ireland.