Michael McGrath says Ireland will support changes introduced following ‘cum-ex’ fraud revelations
Minister for Finance, Michael McGrath tod reporters in Brussels Ireland would back the proposed changes. Photograph: Nick Bradshaw for The Irish Times
Loopholes and mismatches in tax regimes were taken advantage of by traders and funds in a fraudulent scheme that was estimated to have cost European tax authorities billions of euro over two decades. The scheme, known as cum-ex, saw a network of traders, hedge funds, asset managers and banks claiming multiple refunds on dividend withholding tax that was only paid once, or not at all, through a complex series of trades.
Speaking on Tuesday, Minister for Finance Michael McGrath said Ireland was supportive of the reforms. “It will lead to greater harmonisation in terms of the treatment of withholding taxes across member states in the European Union, particularly when it comes to refunds,” he said. Separately, new figures show the vast majority of businesses who warehoused tax debt during the Covid-19 pandemic have engaged with Revenue to start repayments.
A further €120 million has been written off by Revenue as uncollectible given businesses fell into insolvency or went bankrupt. “It was always expected that there would be some proportion of the overall amount that would not be collectible, but in the context of €3.2 billion of tax debt warehoused, in very dark times during Covid-19, I think that is a relatively modest overall proportion,” Mr McGrath said.
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