Bernard Allen
Question:70 Mr. Allen asked the Minister for Finance the plans, if any, he has to make available additional tax allowances to hotels and guest-houses towards the cost of conversion to the euro. [15149/98]
Written Answers. - Tax Allowances.
I do not propose to introduce any special tax allowances in respect of costs incurred by a business in connection with the changeover. This is because such costs will generally be allowable in any event under existing tax legislation, whether the costs are of a current or capital nature. Current costs, which are wholly and exclusively laid out for the purposes of a trade or profession, are fully deductible in the year in which they are incurred. In the case of the changeover to the euro, I expect current costs will account for most of the costs, and these can, in the normal manner, be offset against profits in calculating taxable profit.
Some of the costs of the changeover may result in identifiable future benefits. In so far as these can be capitalised i.e. in respect of expenditure incurred on improving or enhancing a capital asset, this will be regarded for tax purposes as capital expenditure and will generally qualify for capital allowances. The standard capital allowances for plant and equipment are 15 per cent per annum for 6 years and 10 per cent in year 7. I wish to inform the Deputy that all EU member states have agreed that no special concessions should be given for costs incurred by businesses for the changeover to the euro from which business will benefit.