Dublin has moved to boost its attraction for investment management firms through a number of measures contained in the Irish Finance Bill published last week, according to consultants Deloitte.
The main measures of the Bill, which affect the investment management industry, include changes to facilitate UCITS IV, the remittance basis of taxation, a new transfer pricing regime and new rules on non residency declarations.
Under provisions related to the introduction of Ucits IV, proposals include protecting the tax residency and existing tax position of any foreign UCITS managed by Irish investment management companies.
The Bill also clarifies that unitholders in such foreign funds will be treated in the same manner as unitholders in offshore funds and no Irish exit tax needs to be applied by the fund. Other proposed changes include practical ways to achieve fund reorganisations, reconstructions and amalgamations including changes to facilitate master/feeder structures and re-domiciliation of offshore funds.
Non-Irish domiciles with foreign employments will be able to benefit from an extension of the remittance basis to include EU/EEA nationals (other than Irish nationals).
The Bill also introduces a formal transfer pricing regime from 1 January 2011. The measures were expected, as most financial services companies have accomodated transfer pricing for many years. The new law should not be a significant additional burden to them.
The Bill also proposes changes to permit funds that are sold and marketed to non Irish residents only to seek approval from the Revenue to exempt the fund from having to collect non residency declarations from investors. Deloitte said the removal of this administration burden is a very helpful and pragmatic initiative.
Commenting on the measures, Deirdre Power, Financial Services Tax Partner, Deloitte Dublin, said: "Overall, the Finance Bill introduced a number of "pro-enterprise" taxation measures to build on Ireland's existing strengths in the investment management sector. The changes, coupled with the new legal framework introduced before Christmas, which facilitates non-Irish funds companies re-domiciling to Ireland in a simple and business friendly procedure, all add to the advantages Ireland can offer as a location of choice.
"Ireland has an excellent regulatory framework and a wealth of quality service providers with proven expertise. It also has a proven track record in offering innovative solutions to the needs of fund houses. In addition, the Irish Government has reaffirmed its commitment to the 12.5% corporation tax rate. These developments should now position Ireland as the favoured global hub location of the investment management world."
Further analysis on the Finance Bill is available on www.deloitte.com/ie/financebill2010.
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