The Dáil has tonight voted to pass the law establishing the National Asset Management Agency (Nama).
More amendments are expected to be introduced in the senate next week, which means it will have to return to the Dáil for a final vote, which the government hopes to hold on November 12th, before it can go to President McAleese to become law.
If approved, the bad bank, will start transferring risky commercial property loans from banks including AIB and Bank of Ireland before the end of the year.
Today's decision -- which was carried by 77 votes for and 73 against -- does not complete the parliamentary approval process but it sends an important signal to markets which have sold off bank shares on worries about the slow progress of the legislation.
An amendment to prevent those benefiting from the Nama legislation using tax exile laws to relocate outside the State was rejected during the report stage of the Bill to establish the agency.
During the debate Labour finance spokeswoman Joan Burton said it would be "outrageous" if individuals who gained advantage "taking over loans, pursuing guarantees, acquiring land development interests, could avail of Ireland's generous tax exile laws and relocate out of the jurisdiction".
But Minister of State Peter Power said the amendment "misses the fundamental point of what is good for the taxpayer and the State and what makes Nama more effective". The amendment would undermine "that important
objective".
Ms Burton said "we have a situation where Irish tax exiles may be significant beneficiaries of the whole NAMA process. People can go offshore for five years for the purposes of avoiding capital gains tax — head for their homes in the south of France or on the Spanish Costa — until the storm blows over."
Sinn Fein finance spokesman Arthur Morgan asked what the Government was afraid of in the amendment. "The worst case scenario is that someone who is not tax compliant cannot avail of the benefits of Nama. Big deal — hard luck."
Mr Power said there were "substantial obligations on Nama in regard to the tax compliance area" but that was "a completely separate issue from the central question here, namely, how does Nama achieve the best value for money for the Irish taxpayer arising out of its assets". Whether that person "is or is not tax resident is immaterial to that central point".