AIB won't pay tax on its profits for 20 years, CEO says
AIB won’t have to pay tax on profits for 20 years, CEO Bernard Byrne has told TDs and senators.
At current levels the bank won’t be liable for tax on profits for decades thanks to the huge losses it racked up during the financial crisis, Mr Byrne told the Oireachtas Finance Committee.
Responding to questions from Sinn Fein’s Pearse Doherty, the AIB chief said its could be 20 years before his bank starts to pay corporation on tax again.
That’s because the bank has a so called deferred tax asset (DTA) of €3bn, which under tax and accounting rules allows the lender to offset previous losses against future tax bills.
Rules changes in 2009 had initially prevented banks carrying massive historic losses into the future as assets, but in 2013 Michael Noonan reversed the rule changes to the benefit of lenders including AIB.
Bernard Byrne defended the deferred tax asset, saying without it AIB’s bailout could have been €3bn bigger – because it was able to count the loss as a tax asset at the time.
AIB’s profit for the first half of this year was €814m, effectively tax free. The bank remains just over 70pc State owned.