Last year, we went to much trouble to shut down tax avoidance by vulture funds. The then Minister, Deputy Michael Noonan, stated clearly that the funds were using the loophole called section 110 in a way that was not intended. Critically, they were using section 110 to avoid paying taxes on profits generated in the Irish economy. This week, we have new revelations that other investment funds are using section 110 to avoid paying taxes on Irish profits, that they are doing so with the full blessing of the Government, or at least the former Minister, Deputy Michael Noonan, when he was in situ, and that they are working directly with the State via the Ireland Strategic Investment Fund, ISIF. Not only is public money being used in a tax avoidance scheme, so too, potentially, is money from the European Investment Bank. In response to parliamentary questions by Deputy Michael McGrath, the Government has admitted that the Ireland Strategic Investment Fund is availing of four section 110 companies. The journalist, Mr. Jack Horgan-Jones, has obtained the accounts for two of these companies, and reported on the same in The Sunday Business Post. Earlier this week, we received copies of those accounts.

The first company is called WLR Cardinal Mezzanine Fund. "WLR" stands for Wilbur Ross, the current United States Secretary of Commerce. It is a new investment fund in Ireland, with €70 million in assets and its notes are listed on the stock exchange in the Cayman Islands, for obvious reasons. In 2015, it took in €3 million from its activities, and it paid €250 in tax. The second company is called BlueBay Ireland. BlueBay has €160 million loaned out. Between 2015 and 2016, it took in €36 million, and each year, it paid €250 in tax. Both of these funds make their profits from the domestic economy, including real estate, renewable energy, forestry, restaurants, televisions and so on. Both are able to get their profits out of the country completely tax free, other than a notional payment of €250. I am aware of no other country that allows investors to make money on the domestic economy and to then export those profits tax-free out of the country. My understanding from the work we did on the vulture funds was that this type of thing was going to be stamped out, and if one made profit on domestic activity, one would pay taxes here.

My questions are as follows. Is the Minister aware that no other European country tolerates tax avoidance of this kind? Does his Government stand over this practice? Does his Government stand over the State investing money from the European Investment Bank in this way? If not, will he, as a matter of urgency, initiate a full independent review of the use of section 110 companies in Ireland? Will he commit to this House that profits made in the domestic economy in Ireland will be taxed in Ireland?

I thank Deputy Donnelly for raising this issue. The position is that every year, in the Finance Bill, we review tax avoidance. As long as I have been here - which has been a long time - we have seen loopholes being closed each year when they are being abused or exploited in a way that was never intended. In all cases, initiatives in the tax code - which I have seen over many years - are designed by politicians with the best of intentions. Others employ armies of accountants to find ways of using them for other purposes and, every year, one has to deal with that. We have given the Revenue very strong powers not only to pursue abuses, but to put those who are designing schemes that might be anticipating abuses under threat as well. We have a very strong code in this respect.

On our international position, we are taking a leading role in the base avoidance and profit-shifting initiative of the Organisation for Economic Co-operation and Development, OECD. We have moved ahead of the posse to deal with issues in our tax code that could be construed as being abuses in the international arena. We have moved very rapidly to do that and that is absolutely right. We need to ensure that this process is done properly and that we do not have unintentional avoidance or abuse of provisions where companies play one country off against another. We are very committed to that process. The ISIF has a dual-role. One is to earn money and the second is a developmental role. It does not have a responsibility for revenue issues. I assure the Deputy that I will ask the Minister for Finance to examine the issues that he raises and if they are areas where there is a need for initiative, I have absolute confidence that he will take those initiatives in the appropriate manner.

I thank the Minister for his response. I appreciate it and his acknowledgement that this could be seen as an abuse and that we must always look at how the tax code is being used. The problem is that I have seen the responses from the Ireland Strategic Investment Fund to Mr. Jack Horgan-Jones and we have on the record the response from the then Minister, Deputy Michael Noonan, to Deputy Michael McGrath. Both the former Minister and the ISIF maintain that the current use of these section 110 companies is absolutely legitimate.

That is why we want an independent investigation. The Government's stated position may have changed with the new Minister, Deputy Donohoe, but as of February, in response to Deputy Michael McGrath, the Government's stated position is that the section 110 companies are being used properly. ISIF stated to Mr. Jack Horgan-Jones only a few days ago that as far as it is concerned they are being used properly. As far as I, Fianna Fáil and everyone involved in the vulture fund tax loopholes are concerned, this is an improper use and it needs to be shut down.

I appreciate the Minister will raise this with the Minister, Deputy Donohoe, but we are asking that he goes further. We are asking that the Government commits to a full independent review of the use of section 110 companies in the Irish economy and that it makes a commitment to the House that, as a policy principle, profits generated in the Irish economy must be taxed in the Irish economy as they are in every other country on earth.

First, I am strongly of the view that we should use the Revenue to ensure that everyone pays their fair share of tax and that has always been the case. The Government and, indeed, predecessors have dramatically reformed Revenue. I remember when the Revenue system was leaking, and even people had a sneaking regard for the sort of abuses that took place. That has been entirely changed. There is a very strong culture of compliance enforced properly by the Revenue Commissioners.

To suggest we need an independent investigation is something Deputy Donnelly would need to put to the Minister for Finance.

I did yesterday.

From my considerable experience in this House, the Revenue Commissioners are the most effective at identifying abuses of this nature and identifying the way in which they can resolve them, and every year they come forward with the closing down of areas where there is abuse. The idea that we need to have someone overseeing the Revenue Commissioners or some independent assessment does not strike me as being in accordance with the approach we have taken. By all means, Deputy Donnelly should present his case politically of what changes or study of these cases he wants to see to the Minister for Finance, but I am strongly confident that we have the competence within the Revenue to deal with any such abuses and to develop our tax policy in accordance with the highest international standards.