288. Deputy Ged Nash asked the Tánaiste and Minister for Finance if he is considering introducing a tax equivalent to Luxembourg's long established "taxe d'abonnement" in relation to funds domiciled in Ireland; and the amount that would be raised on an annual basis if the Luxembourg system was adopted by Ireland (details supplied). [67880/26]

As the Deputy may be aware, following its introduction in Finance Act 2000 investments in domestic funds are taxed under the gross roll-up regime. Irish resident investors investing through investment funds and life assurance policies are subject to tax through the gross roll-up regime. Under the gross roll-up regime, no annual tax on income or gains arising to a fund is charged but the fund is responsible for deducting Investment Undertaking Tax (IUT) on the triggering of a chargeable event. Chargeable events include:

• the making of relevant payments;

• the redemption of the investment;

• the transfer by an investor of their investment; and

• the ending of an eight-year period following the acquisition of the investment and then every eight years thereafter (deemed disposal).

Finance Act 2006 introduced the above-mentioned eight-year deemed disposal rule for all investments that benefit from the gross roll-up regime. This amendment was designed specifically to prevent the avoidance of tax by way of indefinite deferral of tax under the gross roll-up regime. This ensures that income isn’t being rolled up in funds without being taxed. On the ultimate disposal of the investment, any tax paid which arose as a result of a deemed disposal is allowed as a credit against any final tax liability on disposal.

Exit tax is withheld by the investment fund where there is a gain on the happening of a chargeable event. However, for certain investment funds where the units are held on a recognised clearing system, such as the case with ETFs, the fund is not required to deduct exit tax and the investor must self-assess the tax due.

Whether the investment fund accounts for exit tax or that tax is collected through self-assessment, the amount of the gain is subject to tax at a rate of 38% for individuals, or 25% if the investor is a company (a higher rate can apply where the investment fund is a personal portfolio investment undertaking).

I note that 'Taxe d'abonnement' is a tax levied in Luxembourg on the net assets of certain types of investment funds domiciled in Luxembourg. The tax is levied at different rates on investment funds depending on how they are constituted and regulated.

As there is no requirement for Irish domiciled investment funds to notify or to make a return of their net assets to Revenue, or to specify how they are regulated or constituted, it is not possible for Revenue to provide an  estimate of the amount that would be raised on an annual basis if the Luxembourg system was adopted by Ireland.

Officials continue to monitor developments internationally in the fund taxation space and work is ongoing on recommendations made in the Funds Review Report 2030 to ensure Ireland remains a premier global location for investment funds.