Tax refunds worth more than €200m were paid out to developers and construction companies in the first 11 months of last year, the Sunday Tribune has learned. The figure does not include a further €37.5m in income tax refunds made to construction workers.
Figures compiled by the Revenue Commissioners last week show that income tax refunds of just under €84m were made to those working in "property/real estate activities". Corporation tax refunds of more than €51m were also made to those involved in that sector, an average refund of nearly €23,500. Construction companies claimed back more than €77.9m in corporation tax.
Meanwhile, "banks and other financial intermediation companies" received more than €250m in corporation tax refunds during the period. Just under 720 refund claims had been made by the finance sector by 24 November of last year and the median returned to them was nearly €353,000.
In addition, a further 1,176 people in the sector claimed income tax refunds totaling €3.2m, an average of more than €2,700.
A number of developers are known to be living on the tax refunds and they are one of the main reasons why some still show outward trappings of wealth. Since 2008, they have been advised by their auditors, financial advisers and their banks to seek refunds on their tax bills from the Revenue after writing down the value of their land banks and other property assets.
The average paid back for overpayment of income tax to those involved in "property/real estate activities" was nearly €3,300 with more than 25,700 refunds in total being paid out.
Some developers are also being paid €100,000 a year by the banks to manage projects in which they were involved which have now been quietly seized back by the bank. In one case last year a developer who was ordered to sell his Bentley by a bank was dragged back in by the lender the following week after he replaced it with a Range Rover.
The average paid back to construction companies for overpayment of corporation tax was more than €14,000. By contrast the €37.5m refunded in income tax to those in the construction sector equated to less than €1,900 per claimant.
Labour TD Joan Burton said one of the hidden costs of the banking crisis is the fact that the state is making large scale refunds in relation to losses made by the banks and construction companies which can be carried back and claimed in respect of one year's tax payments.
Any remaining losses not refunded can be carried forward indefinitely, she said, meaning that even when they return to profitability it will be a very long time before they start making any significant contribution to the tax take for the exchequer.