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Ireland

The Finance Act 2004, enacted on March 25 2004, clarified the Irish value-added tax (VAT) treatment of collateral management services provided to Irish SPVs.

The amendments introduced in the Act are intended to clarify that, where collateral management services are provided to an Irish SPV, those services will be exempt activities for Irish VAT purposes and will not give rise to a charge to Irish VAT. This is a welcome development for managed collateralised debt obligation (CDO) transactions.

The amendments also confirm that corporate administration services provided to an Irish SPV will also be exempt activities for Irish VAT purposes and will not give rise to a charge to Irish VAT. This is a good not only for CDO transactions, but also for all future structured finance deals that will involve Irish SPVs. A knock-on benefit is that it will result in a VAT saving for all previously implemented deals involving Irish SPVs.

Ireland has a highly regarded regulatory regime and has consistently introduced and refined its legislation dealing with structured finance transactions. Ireland is also an onshore jurisdiction that is an EU member state, a member of the OECD and within the Eurozone. Ireland, like the UK, is a common-law jurisdiction. Ireland has a large double taxation treaty network and has a domestic infrastructure capable of implementing the most difficult structured finance deals (such as experienced corporate administrators, lawyers and auditors) in a cost-effective manner.

These benefits, combined with the new amendments contained in the Act, are intended to make Ireland the jurisdiction of choice for SPVs for CDO and other structured finance transactions.

Turlough Galvin

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