Cerberus, the US vulture fund that bought Nama’s Northern Ireland loans, paid less than €1,900 tax on the €77 million profit it earned from the assets last year, newly published figures show.

A report by Comptroller & Auditor General Séamus McCarthy found that Nama’s sale of the loans, dubbed Project Eagle, to Cerberus for €1.6 billion could have lost the taxpayer up to €200 million, while claims that business people and politicians were to benefit from the deal have led to several investigations.

Accounts produced by Promontoria Eagle, the Irish-based subsidiary that Cerberus used to the buy the loans in June 2014, show it earned a profit of £65.8 million (€77 million) last year.

The figures also show that it paid just £1,598 – just over €1,870 – to the Republic’s exchequer in 2015. That is because the company structured its business here so that it could benefit from a tax break introduced in the late 1990s to lure financial services firms to the Republic.

This incentive, section 110 of the Taxes Consolidation Act 1997, allows companies such as Promontoria Eagle to write off the loans used to buy the assets that they own against their tax bills.

As a result, Promontoria Eagle was able to write off loan and interest repayments against its profits and avoid paying tax. The company originally borrowed a total of £1.2 billion to buy the Nama assets.

Fire sales

Promontoria has since repaid Nomura’s £730 million of loans.

Along with Promontoria Eagle, Cerberus has a number of other companies in the Republic that it used to buy property loans in Ireland, Britain and Europe in fire sales that resulted from the recession.

All use a similar structure to ensure that they benefit from the section 110 tax break. Accounts filed by six of them last year showed that in 2014 they paid €15,500 tax on income totalling €350 million.

Other vulture funds also benefit from the tax break. Last year, Minister for Finance Michael Noonan modified the law to tackle concerns raised by its widespread use. However, he also said it supported up to 38,000 jobs in the Republic.

Cerberus manages investments totalling more than $20 billion around the world. One of the areas in which it specialises is “distressed property loans”. These are loans secured against properties whose value has fallen far below the debt’s original value.

The company buys these loans at heavy discounts, giving it the right to seek their repayment in full or take ownership of the properties themselves if the borrower fails to pay up or agree a settlement.

The Dáil’s Public Accounts Committee (PAC), the UK’s National Crime Agency, the US Department of Justice and its stock market regulator, the Securities and Exchange Commission, are all investigating Project Eagle.

Mr McCarthy’s report led to the PAC’s inquiry, whose public sessions finished last week. The committee is due to report next month. The C&AG criticised Nama’s sale process and its handling of a potential conflict of interest involving former adviser, Frank Cushnahan.

Cerberus refused last night to comment.