State owned IBRC bank, formerly Anglo Irish Bank, and the National Treasury Management Agency both used a controversial tax structure, part of which was recently closed by the Government. 

The information emerged in a Dáil reply to Fianna Fáil's finance spokesman Michael McGrath from the Minister for Finance Michael Noonan, which was seen by RTÉ News.

However, this evening the Department of Finance has defended the use of the structures and said there was no loss to the taxpayer. 

Last year the Government restricted the use of Section 110 companies following concerns they were being used by investors to avoid paying tax on property transactions.

This was contrary to the original intention of the Finance Act.

While the use of the provision was legal it caused huge controversy.

Foreign investors were using section 110 companies for property related investments. This meant profits were subject to the tax rules of the investors' home country instead of Ireland. 

The Government changed the law to address that. 

In his Dáil reply, Mr Noonan said IBRC used section 110 before it was put into liquidation in 2013. 

He added the National Treasury Management Agency (NTMA) was also involved in a number of investments which involved similar tax structures. 

He said this had occurred through the NTMA's involvement in the Ireland Strategic Investment Fund - a sovereign investment fund which has €8 billion under management. 

Last week it emerged that the National Assets Management Agency (NAMA) had also used Section 110.

Its accounts showed it had to make a €158m preliminary payment to the Revenue Commissioners when the Government shut down the use of the section 110 provisions. 

In a statement this evening, the Department of Finance said section 110 had been used in the past to help job creation and investment. 

"The use of Section 110 companies by Irish investors (including banks such as IBRC) is not a concern as profits from these vehicles are ultimately taxable in Ireland," the statement said

"Recent payments by NAMA to the Revenue in compliance with the 2016 amendment simply brings forward a portion of the ultimate dividend NAMA is expected to deliver to the taxpayer," it added.

However, Michael McGrath said that while the use of Section 110 companies by NAMA may well have been tax neutral for the exchequer, the same is not necessarily true in the case of investments made through Section 110 companies by the State's investment vehicle - Ireland Strategic Investment Fund.

"We need to know the extent of ISIF investments that have used this Section 110 tax structure and the financial implications now that the legislation underpinning Section 110s has changed," Mr McGrath said. 

"In addition, the use of Section 110 companies by IBRC prior to the appointment of a Special Liquidator is intriguing and warrants a full explanation by the Minister for Finance and the current Special Liquidator," he said.
 
In a statement, Ireland's Strategic Investment Fund said that ownership of the fund vests in the Minister for Finance on behalf of the State.  

"Any profits generated from ISIF investments are used to provide capital to new investments on behalf of the State in accordance with ISIF's legislative mandate.

"Based on the information currently available and provided to ISIF, the recent changes to Section 110 legislation will have no impact on the tax position of these ISIF investments and we do not envisage any additional tax liability arising from these legislative changes," it added.