Dáil Éireann debate -
Tuesday, 12 Oct 1999

Vol. 509 No. 1

Written Answers. - Tax Incentives.

John Perry

Question:

174 Mr. Perry asked the Minister for Finance if a developer, who is investing in a hotel in Ballymote, County Sligo, under the tax incentives for hotels scheme, can avail of the same hotel tax incentive scheme for a coach museum located on a 15 acre theme park in Ballymote, County Sligo, in view of the fact he is willing to invest in this community owned project which will be a major tourist attraction; the tax incentives schemes, if any, available to him; and if he will make a statement on the matter. [19494/99]

Minister for Finance (Mr. McCreevy)

I am informed by the Revenue Commissioners that under the provisions of section 268(1) (d) Taxes Consolidation Act, 1997 a building in use for the purposes of the trade of hotel keeping is regarded as an industrial building. A person who incurs capital expenditure on the construction or refurbishment of such a building qualifies for capital allowances at the following rate: Year 1, 15 per cent; Year 2, 5 per cent; Year 3, 15 per cent; Year 4, 15 per cent; Year 5, 15 per cent; Year 6, 15 per cent; Year 7, 10 per cent.These capital allowances can only be given in respect of capital expenditure incurred on the construction or refurbishment of the building or structure occupied for the purposes of the hotel trade and are not extended to other investments or activities carried out by the party claiming the allowances.

There is no ring-fence on the offsetting of the capital allowances against non-rental income in the case of hotels of a three star standard or higher which are located in seven counties in the north and west of the State, including County Sligo, apart from any designated seaside resorts located in these counties.

Ballymote, County Sligo is qualifying rural area for the purposes of the scheme of tax reliefs aimed at invigorating certain areas of rural Ireland. Section 372N of the Taxes Consolidation Act provides for accelerated capital allowances in respect of capital expenditure incurred on the construction or refurbishment of certain commercial buildings or structures such as retail shops, restaurants or offices which are used for the purposes of a trade or profession.

Further information would be required in order to determine whether, and to what extent capital allowances would be available for the coach museum mentioned by the Deputy. If the developer wishes to discuss the project with the Revenue Commissioners he should make contact with the direct taxes incentives branch of the Revenue Commissioners about the matter.

It should also be noted that in addition to the capital allowances regime the taxpayer may be able to avail of the scheme of tax relief for investment in corporate trades, more commonly called the business expansion scheme. The benefits of the BES apply to certain tourist traffic undertakings involved in export tourism. Under the scheme individual investors may obtain tax relief on investments they make in certain tourism companies. In order to qualify for BES the tourism company must obtain a certificate from Bord Fáilte Éireann.