Written Answers Nos. 47-55
47. Deputy Michael McGrath asked the Minister for Finance the position regarding the application by all the banks of the additional mortgage interest relief for a certain category of homeowners as provided for in Finance Act 2012; and if he will make a statement on the matter. [40805/12]
View answerThis is a matter for the Revenue Commissioners who are responsible for the administration of mortgage interest relief through the tax relief at source [TRS] system. The 30% rate of mortgage interest relief for those who took out their first qualifying home loan between 2004 and 2008 came into effect with the enactment of the Finance Bill at the end of March. The regulations provide for the granting of the relief due to the borrower by the lender within the tax year. The mortgage lenders provide mortgage interest relief at source to relevant mortgage holders, which is facilitated by on-going electronic data file transfers between Revenue and each of the 132 individual qualifying lenders. To apply the new 30% rate, specific technology developments were required to Revenue’s and to each of the lenders’ computer systems. Revenue's systems were upgraded to implement the 30% rate last December and Revenue has since been communicating with the various lenders in regard to their IT enhancements, but the speed of upgrading has not been uniform across all lenders. To date, the IT upgrades required to give effect to the 30% rate have been completed by all but one of the lenders and these lenders have either implemented the rate or will do so with effect from next month.
Revenue is currently in direct contact with the remaining lender to ensure that the additional 5% due to borrowers is paid within the current year and applied retrospectively. Revenue has received commitment from the lender that the rate will be implemented within the current tax year.
In January, as an interim relieving measure, Revenue advised lenders to grant tax relief at the rate of 25% to those entitled to the new 30% rate of relief, given that the 25% rate was already a feature of the first time buyer mortgage interest relief regime and was not dependent on new IT upgrades taking place.
48. Deputy Pearse Doherty asked the Minister for Finance if he will identify the value attributed by the Irish Bank Resolution Corporation on its balance sheet in its report and accounts for the six months ending 30 June 2012, to subordinate bonds received from the National Assets Management Agency. [40821/12]
View answerAt end June 2012 IBRC’s nominal holding of NAMA subordinated bonds stood at €843m with a carrying value of €124m. This information is contained in p11 of IBRC’s Interim Accounts which can be found at: http://www.ibrc.ie/About_us/Financial_information/Latest_interim_report/
49. Deputy Pearse Doherty asked the Minister for Finance if he will estimate by year the interest received, and receivable in future, up to 2031 by the Central Bank of Ireland in respect of the provision of Exceptional Liquidity Assistance secured by the so-called bailout promissory notes to Anglo Irish Bank, Irish Nationwide Building Society and their successor, the Irish Bank Resolution Corporation; if he will estimate the costs deducted and deductible by the Central Bank of Ireland from interest received and receivable in future on such promissory note secured ELA before the excess profit is returned to the Exchequer. [40822/12]
View answerThe Central Bank of Ireland has advised me that one of the functions of the Central Bank, similar to other central banks, is to grant Exceptional Liquidity Assistance to a credit institution when this is deemed necessary for financial stability purposes. These amounts are published monthly. The Bank does not comment on ELA operations. As outlined in the Bank’s Annual Report for 2011 (pg.107), the Bank earned interest income of €1,627.8 million on ELA operations in 2011 (2010: €516.4 million).
50. Deputy Eoghan Murphy asked the Minister for Finance if the financial institutions Allied Irish Bank, Permanent TSB and Irish Life are subject to public procurement rules. [40839/12]
View answerWhile the State holds a majority shareholding in both AIB and Permanent TSB and recently acquired full ownership of Irish Life, the institutions are not covered by formal public procurement rules as their commercial remit makes them subject to market forces. The Relationship Frameworks for Allied Irish Banks and Irish Life and Permanent (now Permanent TSB) were published on the Department of Finance website on 30 March 2012, the relevant links are published below for your convenience:
http://banking.finance.gov.ie/wp-content/uploads/Allied-Irish-Banks1.pdf
http://banking.finance.gov.ie/wp-content/uploads/Irish-Life-and-Permanent1.pdf
Under the Relationship Frameworks the Boards of these institutions are responsible for the day to day operations including the awarding of contracts. Therefore they are not required to seek formal approval before awarding contracts of any nature, though certain other transactions do require Ministerial approval.
51. Deputy Regina Doherty asked the Minister for Finance if he still provides staff with the option to take career breaks on one year or more; if not, if this can be considered as a cost saving initiative; and if he will make a statement on the matter. [40856/12]
View answerCareer breaks are available in the civil service and in the state sector generally. The scheme is promoted as being one of a number of facilities that help staff to combine work and family responsibilities. A career break consists of special leave without pay for a period of not less than six months and not more than five years. A career break may be extended in six monthly periods or in periods in excess of six months provided the total period of special leave without pay does not exceed five years in all. Subject to certain conditions eligible staff may, in general avail of two career breaks during their career provided the total period does not exceed ten years.
52. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No 281 on 18 September 2012, if he will confirm that when he states I can confirm that, under current arrangements, the scheduled payments on the Promissory Notes are due to continue until 2031 that he means that a total of circa €48bn is scheduled to be paid to Irish Bank Resolution Corporation up to 2031 in respect of the promissory notes, and that further to Parliamentary Questions Nos 283 and 284 on 18 September 2012 if he will further confirm that when he states I have been advised that in calculating the projected final net asset position IBRC take into account interest from all assets including customers, securities and Promissory Notes that the ultimate net asset position which was previously estimated by the management of Anglo for that bank at €3-4bn, takes account of the €48bn of scheduled payments on the Promissory Notes. [40895/12]
View answerI can confirm that under current arrangements the scheduled payments on the Promissory Notes are due to continue until 2031 and a total of €48bn is due to be paid. I enclose again the proposed schedule of payments. IBRC has confirmed that the Bank’s CEO has previously indicated that the likely outcome, based on current assumptions, for Anglo Irish Bank at the end of the Bank’s long term forecasting/commitments horizon in 2020 is in the region of €25 - €28 billion. This forecast of €25-€28 billion does not include the coupons payable on the residual Promissory Note between 2020 and 2031 but does take into account interest from all assets including customers, securities and Promissory Notes up to 2020.
|
€bn |
Total interest Paid: A |
Total Capital Reduction: B |
Repayments: A + B |
|
|
31/03/2011 |
0.55 |
2.51 |
3.06 |
|
|
31/03/2012 |
- |
3.06 |
3.06 |
** |
|
31/03/2013 |
0.49 |
2.57 |
3.06 |
|
|
31/03/2014 |
1.84 |
1.22 |
3.06 |
|
|
31/03/2015 |
1.75 |
1.31 |
3.06 |
|
|
31/03/2016 |
1.65 |
1.41 |
3.06 |
|
|
31/03/2017 |
1.55 |
1.51 |
3.06 |
|
|
31/03/2018 |
1.44 |
1.62 |
3.06 |
|
|
31/03/2019 |
1.32 |
1.74 |
3.06 |
|
|
31/03/2020 |
1.19 |
1.87 |
3.06 |
|
|
31/03/2021 |
1.06 |
2.00 |
3.06 |
|
|
31/03/2022 |
0.91 |
2.15 |
3.06 |
|
|
31/03/2023 |
0.75 |
2.31 |
3.06 |
|
|
31/03/2024 |
0.57 |
1.52 |
2.09 |
|
|
31/03/2025 |
0.45 |
0.47 |
0.91 |
|
|
31/03/2026 |
0.39 |
0.52 |
0.91 |
|
|
31/03/2027 |
0.33 |
0.58 |
0.91 |
|
|
31/03/2028 |
0.26 |
0.65 |
0.91 |
|
|
31/03/2029 |
0.19 |
0.73 |
0.91 |
|
|
31/03/2030 |
0.10 |
0.81 |
0.91 |
|
|
31/03/2031 |
0.01 |
0.05 |
0.05 |
|
|
16.8 |
30.6 |
47.4 |
* These numbers may not tot exactly as a result of rounding
** The March 2012 repayment was settled with a long term Government bond.
53. Deputy Pearse Doherty asked the Minister for Finance the year in which he expects Irish Bank Resolution Corporation to return to a position where it generates a net-after-tax profit. [40896/12]
View answerI have been advised by IBRC that they are continuing to work to achieve the agreed objectives in the joint restructuring plans which are to dispose of the assets of the Bank in an orderly fashion and to minimize capital losses to the Shareholder. The performance of the Bank during the wind-down period will be driven (inter alia) by the actual recovery rates achieved for assets, the performance of the domestic and global economies and prevailing interest rates in Europe over the duration of the plan. It is difficult to predict the timing of a return to profitability and the final net asset position of the Bank, given the current uncertainties in financial markets, the continued deterioration in asset values (particularly in Ireland), and the complexities, timescales and risks involved in deleveraging.
54. Deputy Richard Boyd Barrett asked the Minister for Finance the actual effective corporate tax rate over the past five years, breaking it down year by year and the amount of corporate tax paid over the past five years, broken down year by year. [40932/12]
View answer55. Deputy Richard Boyd Barrett asked the Minister for Finance the projected effective corporate tax rate for the next year; and if he will make a statement on the matter. [40933/12]
View answerI propose to take Questions Nos. 54 and 55 together.
I wish to advise the Deputy that companies operating in Ireland over the past five years have been chargeable to corporation tax at the 12.5% rate on their trading profits. A higher 25% rate applies in respect of investment, rental and other non-trading profits and profits from certain petroleum, mining or land dealing activities. Companies’ capital gains are effectively chargeable at the capital gains tax rate and the rate was increased:
- from 20% to 22% for disposals on or after 15 October 2008,
- to 25% for disposals on or after 8 April 2009 and
- to 30% for disposals on or after 7 December 2011.
The 10% corporation tax rate for profits from manufacturing expired at the end of 2010 and the 12.5% rate now applies to such profits.
There are different ways of measuring the effective rate of corporation tax depending on the variables that are used. As there is no single internationally agreed comparative measure in place, I am not in a position to provide such a measure for the period referred to by the Deputy. However, I mentioned previously that an effective rate of corporation tax of 11.9% was estimated for Ireland in a Paying Taxes study produced by the World Bank and PricewaterhouseCoopers in 2011 as part of an annual Doing Business report. The study includes a measurement of effective tax rates across 183 countries based on the tax obligations of a standardised company operating in each country and using standard assumptions regarding exemptions, deductions and allowances.
As regards the amount of corporation tax paid over the past five years, the following table shows the net receipt of corporation tax from 2007 to 2011:
|
Calendar Year |
Net Receipt of Corporation Tax |
|
2007 |
€6,393m |
|
2008 |
€5,072m |
|
2009 |
€3,890m |
|
2010 |
€3,944m |
|
2011 |
€3,500m |
