Minister Donohoe launches public consultation on review of stamp duty charge on share transactions

Minister Donohoe launches public consultation on review of stamp duty charge on share transactions

Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, today (Friday) launched a public consultation on stamp duty regime that applies to share transactions in Irish incorporated companies.

The “Getting Ireland Brexit Ready” document, published in conjunction with Budget 2017, committed to conduct such a review of the application of stamp duty on share transactions. The objective of this consultation is to examine the rationale for retaining Stamp Duty on share transactions in its current form in the context of a changing financial and economic environment and in the context of the sustainability of the stamp duty yield and the future relationship between the EU and the UK.

The consultation invites interested parties to make submissions regarding:

  • Whether stamp duty on share transactions continues to be justified as part of our overall taxation system;
  • The extent to which Brexit related developments should influence policy on reducing or eliminating stamp duty on share transactions;
  • What alternative revenue streams from the financial services area or elsewhere could be considered to replace the revenue forgone in the event of a reduction or elimination of stamp duty on shares;
  • What direct impact stamp duty on share transactions would have on Ireland’s competitive position post-Brexit;
  • Is there any evidence that reduction or elimination of stamp duty on shares will result in an increase in availability of equity finance for corporate entities;
  • What impact, if any, will a reduction or elimination of stamp duty on shares have on trading in equities in terms of volume and share price volatility and;
  • Will a reduction or elimination of stamp Duty on shares have any impact for pension funds or wealth management activity?

Commenting on the review Minister Donohoe said: This consultation provides an opportunity for interested parties to input their views to my Department’s review of the stamp duty regime that applies to share transactions in Ireland. This is another element of our on-going examination of the changing financial and economic environment in the context of Brexit’.

Interested parties are invited to make submissions on the matter via email: StampDutyConsultation@finance.gov.ie or by post to:

Public Consultation – Review of Stamp Duty on Share Transactions

Tax Division

Department of Finance

Room 2.1

14-16 Upper Merrion Street

Dublin 2, D02 K728

The consultation period will run to 5pm on 31 October 2017. Any submissions received after this date may not be considered.

 

ENDS

Notes to Editors

Stamp duty is generally a tax on documents or instruments. To be liable, an instrument must be listed in Schedule 1 to the Stamp Duties Consolidation Act 1999. It must also be executed in Ireland or, if executed outside Ireland, it must relate to property situated within Ireland or something done or to be done in Ireland. Some instruments may benefit from an exemption or relief.

Stamp duty chargeable in Ireland falls into two main categories:

  1. The first comprises the duties payable on a wide range of legal and commercial documents, including (but not limited to) conveyances of property, leases of property, share transfer forms and certain agreements.
  2. The second category comprises duties and levies payable by reference to statements. These duties and levies mainly affect banks and insurance companies and include a duty in respect of financial cards e.g. Credit, ATM, Laser and Charge cards, and levies on certain insurance premiums and pension schemes.

The objective of this consultation is to review the rationale for retaining stamp duty on share transactions in its current form in the context of a changing financial and economic environment. Any such move would be to encourage the development of businesses listed on the Main Securities Market of the Irish Stock Exchange. In approaching this question, it is of course important to conduct an assessment of the potential impact such a change may have on the Irish economy.

The table below shows the receipts from stamp duty on shares in the years 2007 – 2016. The annual receipts ranged from €609 million in 2007 to €392 million in 2016, which were 19% and 33% of the respective total stamp duty receipts for those years.

 

Year Total Stamp Duty Receipts Stamp Duty on Shares % of Total SD Receipts from Share Transactions
2007 €3224m €609m 19%
2008 €1763m €419m 24%
2009 €1003m €208m 21%
2010 €962m €182m 19%
2011 €1383m €195m 14%
2012 €1426m €171m 12%
2013 €1333m €251m 19%
2014 €1680m €282m 17%
2015 €1276m €424m 33%
2016 €1196m €392m 33%