Banks want concessions for those participating in NAMA
Published 26/01/2010 | 05:00
The country's banks have applied for three tax changes as part of their participation in NAMA, the toxic loans agency. The banks claim granting the changes will help lower the administrative burden on them.
The Irish Banking Federation (IBF) is looking for concessions in the areas of capital gains tax, professional services withholding tax and mortgage interest relief.
The organisation, which represents banks like AIB, Bank of Ireland and Anglo Irish, said allowing the changes would help the banks and the Revenue Commissioners.
The banks said they would be providing "debt collection services'' for NAMA, but there was a danger this activity could attract what is known as professional services withholding tax, charged at 20pc on those who get paid for providing professional services.
The banks are now looking for further clarity on this issue or a Revenue declaration that taking part in NAMA will not trigger this tax.
The banks are also concerned that when they transfer loans to NAMA this could trigger capital gains tax or withholding tax.
They are now seeking to have loans transferred to NAMA exempted from these taxes. The final area the banks are seeking clarity about concerns the possible transfer in future of residential mortgages to NAMA.
The banks want to know whether NAMA, which technically is not classified as a "qualifying lender'', will still be able to allow customers mortgage interest relief at source in the normal way.
"This provision should be applicable in the event of residential mortgage loan transfers to NAMA,'' the banks have told the Government.
Mortgage interest relief is known as Tax Relief at Source or TRS.
IBF spokesmanFelix O'Regan said: "Clarity on the issue of tax relief at source is important, where there is a transfer of residential mortgage loans to NAMA, in providing ongoing certainty to mortgage holders currently in receipt of the relief."