MINISTER QUERIES REGULATOR'S BREXIT ATTITUDE - The Central Bank has been accused of adopting an "unhelpful attitude" when it comes to processing Brexit-driven inward investment and relocation queries and of "unclear processes" that often result in "lengthy delays" for financial services firms considering relocating or expanding their businesses in Ireland.
The stinging criticisms are contained in a letter written by Financial Services and Insurance Minister Michael D'Arcy and seen by the Irish Independent. The minister said he wanted to investigate the claims, which had been put to him by some potential investors. The Central Bank rejected the criticism, and said its approach was in line with "sound regulatory practices agreed across Europe". In a statement, the Central Bank said it dealt with all enquiries in an "open, engaged and constructive manner". However, the letter has been circulated to the Central Bank, IDA and industry bodies within the sector in an effort to investigate the claims. While the minister is careful not to criticise the Central Bank, he details a list of frustrations relayed to him by corporations and questioned whether a formal "mechanism" should be established to "enable companies to articulate their concerns".
GOVERNMENT MOVES TO CLOSE STAMP DUTY LOOPHOLE IN FINANCE BILL - A late change to the Finance Bill has been introduced to try to stop people who are selling commercial property from avoiding the new higher 6% stamp duty rate by making the transfer via a company sale.
A much lower 1% stamp duty rate applies to the sale of shares and the measure is designed to stop people setting up artificial transactions involving the placing of property assets into companies, with the intention of making the transfer via a share sale, says the Irish Times. The new measure became effective on Wednesday, December 6th, assuming the Dáil approves a Government recommendation passed through the Seanad late on Tuesday. In a highly unusual move, the Government introduced the measure in the Seanad, which voted it through as a "recommendation". As it is a "money Bill", it must now return to the Dáil before being enacted. The move is understood to have followed a recommendation from the Revenue Commissioners, presumably sparked by evidence of people structuring transactions to avoid the new commercial property stamp duty rate, which rose in the budget from 2% to 6%.
CONCERN OVER LEVEL OF MORTGAGE RESTRUCTURING - A mortgage expert has expressed serious concern after Central Bank research showed the number of home loan accounts - possibly well over 120,00 and as many as 200,000 - that needed some sort of modification or restructuring was much higher than officially recorded, writes the Irish Examiner.
Michael Dowling, chair of the mortgage committee at the Irish Brokers’ Association, said the discrepancy in the figures raised concern because the new figures suggest the household debt crisis to be larger than first thought and that the challenges were greater in tackling the debt distress faced by many households. He called on the Central Bank to provide more details over how the discrepancy could have occurred. The Central Bank said that the new figures on non-performing loans in the Irish market showed that "the scale of mortgage modification in the market is larger than previously measured". The research by Fergal McCann showed that AIB, Bank of Ireland, Permanent TSB and KBC issued almost 100,000 temporary modifications between 2009 and 2016, and issued around 100,000 modifications on a sustainable, or long-term basis, over the same period. Double counting will likely mean that there were fewer than 200,000 modifications but that the number was nonetheless higher than the official figures suggest.
APPLE IN LINE FOR $47 BILLION TAX WINDFALL - Apple will see as much as $47 billion slashed from its expected tax liability if Republicans push through their current tax plan, making it the biggest beneficiary of the legislation now working its way through Congress.
The massive scale of the tax cut, based on calculations by tax experts and the Financial Times, has come into focus in recent days as the Senate and House bills have converged over their treatment of the estimated $1.3 trillion of cash American companies hold offshore. The details of the tax legislation have yet to be finalised. The potential windfall for the world’s most valuable company stems from the reduced tax rate that would be applied to foreign earnings that it currently holds outside the US. Like many US companies, Apple has opted to leave the bulk of its overseas earnings abroad rather than pay the 35% corporate tax rate that would apply if the money were brought home under the current regime. The Republican proposals call for taxing that money at rates of no more than 14.5%, whether or not it is returned home. Apple has $252 billion in foreign cash and investments, about a fifth of the total overseas holdings for all US companies, according to rating agency Moody's. Apple's total dwarfs the $132 billion held by Microsoft, the US company with the second biggest foreign cash pile.