The 1pc stamp duty on Irish share transactions has put companies here at a disadvantage compared to their counterparts in the US and Europe, the operator of the Irish Stock Exchange says. In a pre-Budget submission, Euronext Dublin has called for the 1pc tax to be abolished as it is making Irish shares more expensive and less attractive to investors. Euronext highlights a particular issue with Irish-incorporated companies that take out a listing in America, where no stamp duty has to be paid on share
transactions. “This is directly incentivising trading to migrate offshore, and penalising domestic investors,” Euronext says. The different stamp duty rules for Irish companies depending on whether their listing is here or in the US has contributed to “a decline in Irish listings, reduced domestic investment, and weakened Ireland’s capital markets’ ecosystem”, it claims. “Companies seeking a US listing typically cancel their home listing, and tend to gravitate operationally away from Ireland – resulting in a loss of economic activity, employment, and intellectual property.” Euronext has
told Finance Minister Simon Harris that the departure of several blue-chip companies from the Irish stock market in recent years shows the long-term damage being done to the economy. Among the Irish incorporated companies that have moved their listing to the US are CRH, Flutter and Smurfit Westrock. They moved in search of higher valuations and greater liquidity, and their departure has weakened the Irish Stock Exchange. The Dublin exchange is now down to 24 companies, from over 100 at its peak. The last major
addition was the healthcare group Uniphar, which raised €150m from an IPO in 2019. Last October’s budget introduced a stamp duty exemption for trading in the shares of Irish SMEs. There is now also a tax relief for IPO expenses. Euronext says the Government needs to go further and abolish the tax on trading in the shares of all Irish companies. It also suggests that in the case of companies with dual listings, scrapping the stamp duty on trades would remove a key disincentive to
staying listed in Ireland for high-growth companies that want to list in America. Euronext stresses there would be no cost to the Exchequer from making this change. “A solo listing of an Irish company on a US securities market does not give rise to any stamp duty revenue. Accordingly, where an Irish company delists from its home market in order to pursue a US listing, stamp duty receipts for the Irish Exchequer fall to zero,” it says. Euronext also makes the point that even if
there were a way to collect stamp duty on trading in Irish companies listed in the US, investors would simply buy and sell there, rather than pay the 1pc tax. “In this scenario, all trading activity would quickly move to the US and no stamp duty revenue would arise in Ireland in any event.”
Euronext Dublin, Irish Stock Exchange, stamp duty, share transactions, Simon Harris, Irish SMEs, IPO expenses, CRH, Flutter, Smurfit Westrock, Uniphar