Revenue unable to contact thousands of IRNRs

The Revenue Commissioners has been unable to contact thousands of Irish registered non-resident companies (IRNRs) to inquire about their tax status.

In reply to a Dail question, the Minister for Finance, Mr McCreevy, reported that while the rate at which IRNRs were being incorporated in the Republic had begun to slow down, it would be some time before the Registrar of Companies could begin strike-off proceedings against bogus firms.

According to Mr McCreevy, some 13,975 IRNRs were incorporated in the nine months to the end of September 1999, compared with 17,004 in the same period in 1998.

More than 40,000 IRNRs are understood to have been incorporated in the Republic to date, many of which are being operated for the benefit of individuals involved in fraud, money laundering and other illegal activities.

Several of these companies have been established to appear as though they are operating as part of Dublin's International Financial Services Centre, causing credibility problems overseas.

The Government has responded with the introduction of stricter registration requirements to weed out the companies being used for dubious activities.

The 1999 Finance Act deems all companies registered in the Republic to be resident for tax purposes unless their activities fall within certain categories which are tax exempt.

Where companies fail to register with the Revenue for tax purposes they can be referred to the Registrar of Companies to be struck off.

Mr McCreevy said the Revenue had written to 8,397 companies incorporated between February and August 1999 which had not already filed the required particulars. Following the adoption of the 1999 Finance Act, the Revenue also wrote to 38,996 companies incorporated before that date which were not carrying on a trade in the State and had not registered for tax.

The Revenue's next step is to notify the Registrar of Companies of those firms which fail to provide the required information to have them struck off.

The Minister said those concerned were written to in October 1999 and by January 27th, just 5,512 out of 38,996 had made the required returns.

A further 9,389 were sent back to the Revenue indicating the addressee was unknown.

The statistics show that in total some 24,095 have failed to respond to the Revenue to date.

Mr McCreevy said the Revenue intended to complete this examination shortly and to forward a list of the companies which had failed to provide the required information to the Registrar of Companies to begin strike-off procedures.

"I believe the measures to deal with the IRNR problem and the changes to company law will prove to be effective in containing and eliminating the problem," the Minister said.

Fine Gael deputy leader, Mrs Nora Owen, who tabled the Dail questions, said it was disappointing that these companies were continuing to be abused on such a large scale.