Tax Code

Dáil Éireann Debate, Tuesday - 6 March 2012

Tuesday, 6 March 2012

Questions (72, 73, 74, 75)

Mary Lou McDonald

Question:

113 Deputy Mary Lou McDonald asked the Minister for Finance if, further to Parliamentary Questions Nos. 132 and 133 of 22 November 2011, he will consider revoking the ability of a member of the Government living outside of Dublin to claim a tax deduction on an amount of €3,500 per annum for maintenance costs associated with maintaining a second residence in a hotel, examples of which are laundry and so on, as allowed for under Rule 3 of Schedule 2 of the Income Tax Act 1967, now section 114 of the Taxes Consolidation Act 1997. [12413/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

The tax deduction introduced by the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act 1992 applies in respect of the expense incurred in maintaining a second residence. The legislation does not specify the nature that a second residence has to take. Accordingly, I am informed by the Revenue Commissioners that they have set out their views on how they will grant the deduction in three possible scenarios — where a Minister owns a second residence, where a second residence is rented and where a second residence consists of hotel or guesthouse accommodation. These were outlined in my reply to the previous Parliamanetary Questions referred to by the Deputy.

As regards Ministers who avail of hotel or guesthouse accommodation, as an alternative to the actual vouched additional expenses incurred in living away from home, the Revenue Commissioners are prepared to accept that an annual claim in the amount of €3,500 represents a reasonable estimate of the amount of such expenses, and I am advised that they have no plans to review this amount. As with all tax measures, the Dual Abode Allowance remains under constant review. However, I do not intend to amend the scheme at this time.

Pearse Doherty

Question:

114 Deputy Pearse Doherty asked the Minister for Finance if he will provide details of all works of art deemed eligible under the artists exemption in 2009, 2010 and 2011 including information on the category of works and the qualifying criteria under which these works qualified in each of the named years; and if he will make a statement on the matter. [12121/12]

Minister for Finance (Deputy Michael Noonan)

Details of all determinations made by the Revenue Commissioners under section 195 of the Taxes Consolidation Act 1997, includingthe years 2009, 2010 and 2011 are available on the Revenue website at http://www.revenue.ie/en/tax/it/leaflets/artists-exemption-section-195-1997-act.html. This list is updated on a quarterly basis. The criteria under which determinations are made are set out in the Guidelines made under subsection (12) of that section. The Guidelines are available on the Revenue website at http://www.revenue.ie/en/tax/it/reliefs/artists-exemption.html.

Dominic Hannigan

Question:

115 Deputy Dominic Hannigan asked the Minister for Finance his plans for the taxation of betting exchanges; and if he will make a statement on the matter. [12124/12]

Minister for Finance (Deputy Michael Noonan)

The proposed betting (Amendment) Bill, which is being drafted at present, will amend the 1931 Betting Act to inter alia establish the regulatory framework for the licensing of remote bookmakers and betting exchanges, including measures to enforce the regulatory framework. The drafting of the Bill, which is fairly complex, is well advanced. The Finance Act 2011 contained measures to allow for the extension of the 1% betting duty to remote bookmakers and for a 15% gross profit tax to betting exchanges. The taxation provisions are subject to a Ministerial Commencement order which can only be commenced when the Betting (Amendment) Bill is enacted. In relation to the taxation treatment of betting exchanges, it is the operator of the betting exchange that will be liable to the gross profit tax which is also the position in the UK.

Nicky McFadden

Question:

116 Deputy Nicky McFadden asked the Minister for Finance if he will outline the rationale for the travel agents margin scheme; if he will consider the concerns raised by a person (details supplied); and if he will make a statement on the matter. [12141/12]

Minister for Finance (Deputy Michael Noonan)

I am advised by the Revenue Commissioners that provisions covering the Travel Agents Margin Scheme are contained in Section 88 of the VAT Consolidation Act 2010. This scheme, which is provided for in Articles 306 to 310 of the EU VAT Directive, with which Irish VAT law must comply, was introduced with effect from 1 January 2010. Detailed discussions with the travel industry were carried out prior to the introduction of the scheme which is a standard EU-wide Scheme in operation in most Member States of the EU. The scheme deals with the activities carried on by travel agents who act in the capacity of a principal when supplying certain travel services such as transport, accommodation, etc, which they have bought in from third parties for onward supply to travellers. Travel agents covered by the scheme are liable to VAT on their margin on the services provided rather than the full consideration they receive in respect of the supply of these services.

The nature of the scheme means that the travel agent only has an obligation to account for VAT on the margin in the country where he/she is established. The travel agent has no further VAT obligations in places where the travel services are supplied. The travel agent cannot recover any VAT charged when he/she purchases the travel services but this is because VAT is only accounted for on the margin when the services are supplied on to the traveller. The VAT treatment applied under the margin scheme has the same effect as for ordinary traders who account for VAT on the full consideration charged for a supply of goods or services and recover VAT on the purchase of those goods or services. There is no double taxation. Similarly travel agents like other traders can recover VAT on deductible overheads incurred by them in connection with their taxable supplies.

The scheme has benefits for a travel agent in terms of complying with his/her VAT obligations. In the absence of the scheme a travel agent could have compliance obligations across many Member States of the EU with a resultant increased administrative burden.