Written Answers Nos. 351-367
351. Deputy Róisín Shortall asked the Minister for Finance if a refund of the local property tax will be payable in the circumstances in which a home-owner discovers that they have declared a property value in excess of its true value. [17499/13]
View answerThe Finance (Local Property Tax) Act 2012 sets out how the tax is to be administered and how a residential property is to be valued for Local Property Tax (LPT) purposes. I am informed by the Revenue Commissioners that LPT is a self-assessed tax so in the first instance it is a matter for the property owner to calculate the tax due based on his or her assessment of the market value of the property. For the purposes of LPT, property values for properties under €1 million are organised into valuation bands, with a range of €50,000 in each band. As property owners will not be required to provide a precise value for their property, it is unlikely that any owner would find themselves in the position where they overpay their LPT.
The initial valuation of a property on 1 May 2013, assuming it is made in good faith, will be valid up to and including 2016 and will not be affected by any increase or decrease in property prices or other changes, during this period. This will ensure a measure of certainty for all property owners. Accordingly, where an owner assesses that the value of a residential property on 1 May 2013 places it in a particular valuation band but, due to a general decrease in property prices after that date the reduction in the value of the property would place it in a lower valuation band, the owner will not be entitled to a refund of tax. By the same token, if the property increases in value in that period, no additional charges will apply. The owner will, however, have the opportunity to re-assess the value of the property on the next valuation date which is 1 November 2016.
Notwithstanding the above, I am advised by the Commissioners that section 26 of the 2012 Act (as amended) provides for the possibility of a refund where an overpayment of LPT was made due to an error or mistake on a Return or a statement made by the liable person, subject to certain conditions being satisfied. This might arise, for example, where a liable person had paid their LPT charge but they subsequently discovered that their property was exempt from the charge. Generally speaking, a liable person seeking a refund because they over-valued their property would not come within the scope of this provision, so it is imperative that the liable person takes due care and attention is self-assessing the valuation band for the residential property.
In the context of section 26 where an error or mistake is proven, I am advised that once a true and complete Return has been prepared and delivered to the Revenue Commissioners and all the information required by the Commissioners to make a determination on the case has been provided, a refund may issue where a claim for repayment is submitted to Revenue within the normal four year time limit.
I am further advised by Revenue that the legislation also allows a liable person to appeal against a decision of the Revenue Commissioners not to allow a repayment.
352. Deputy Denis Naughten asked the Minister for Finance if he will consider the provision of 100% excise relief on ethanol for fuel in order to support the re-establishment of a sugar industry here; and if he will make a statement on the matter. [17518/13]
View answerEthanol, which is fully denatured and intended for use as a substitute fuel, is chargeable to mineral oil tax in accordance with section 96(2A) of the Finance Act 1999. Section 100 of the Finance Act 1999 provides for an exemption from the carbon charge component of the mineral oil tax rate, if Revenue is satisfied that the fuel is biofuel. On the basis of current rates, assuming the exemption for carbon tax applies, the net mineral oil tax rate payable on bioethanol for use as a propellant would be €541.84 per 1,000 litres and the net mineral oil tax rate on bioethanol for use other than as a propellant would be €47.36 per 1,000 litres. While the Deputy may be aware that any exemptions given or considered would have to be notified to the European Commission under State Aid rules, I have no plans at this time to introduce further reliefs in this area.
353. Deputy Clare Daly asked the Minister for Finance if he will confirm that he received correspondence (details supplied) from the former Director of Corporate Enforcement in relation to Revenue Commission data. [17623/13]
View answer354. Deputy Clare Daly asked the Minister for Finance if he will lay before Dáil Éireann a copy of the submission (details supplied); and if he will confirm that he has replied to the issues raised by the former Director of Corporate Enforcement on or about 18 June 2012. [17624/13]
View answerI propose to take Questions Nos. 353 and 354 together.
Section 851A of the Taxes Consolidation Act inserted by Section 77 of the Finance Act 2011 was enacted in order to provide a firm legislative basis for the protection of taxpayer information held by Revenue.
Section 851A does not prevent case specific applications for access to data held by the Revenue Commissioner from being made by the Office of the Director of Corporate Enforcement or Criminal Assets Bureau for the purposes of the exercise of their statutory functions. In this regard the legislation not only sets out particular circumstances in which Revenue may disclose information but also contains provisions that enable the disclosure of information where other statutory provisions provide for this.
I am aware of the specific issue to which the Deputy alludes and my officials, together with the Office of the Revenue Commissioners, are working with the Office of the Director of Corporate Enforcement to address it.
355. Deputy Patrick O'Donovan asked the Minister for Finance if he has any plans to underpin with legislation the consumer protection code for debt collection firms employed by financial institutions which was developed by the Central Bank of Ireland to protect consumers from practices detailed in the code; if he will strengthen the existing code; if the Central Bank operates a complaints mechanism in parallel with the code; if they can sanction financial institutions and debt collection services who violate the code; and if he will make a statement on the matter. [17625/13]
View answerI wish to inform the Deputy that I have no responsibility for the regulation of debt collectors and debt collecting firms. Debt collection services apply across a significantly wider range of activities than the recovery of money by financial institutions, for example for the non payment of utilities, rents, hospital charges, college fees, other consumer debts and also debts between businesses.
The Minister for Justice and Equality is responsible for legislation - the Non-Fatal Offences against the Person Act 1997 - which applies to all debt collectors that operate across any or all sectors of the economy, including private individuals and debt collecting firms.
Under section 11 of this Act, it is an offence to demand payment of a debt in a way that is designed to cause alarm, distress or humiliation. A person found guilty of offences under this Act is subject to large fines and up to 14 years imprisonment.
The Central Bank has informed me that there is no Consumer Protection Code applying specifically to debt collection firms. However, the Deputy might wish to note that, in the case of financial institutions which use debt collection firms, the Central Bank has imposed requirements that offer protection to consumers under the revised Consumer Protection Code. The Code obliges the regulated financial institutions that it covers to ensure that any outsources activity, such as debt collection, complies with the requirements of the Code. This means that outsourced activity should uphold principles in the Code such as the requirement for financial institutions: -
- Not to exert undue pressure or undue influence on a customer,
- To act honestly, fairly and professionally in the best interests of customers and to act with due skill, care and diligence in the best interest of its customers and
- To prohibit personal visits or oral communications except in specified circumstances.
The Consumer Protection Code for Licensed Moneylenders also contains some requirements in this regard. Where a moneylender engages the services of a third party to collect debts on its behalf, the moneylender must have in place a written contractual arrangement which seeks to ensure that consumers are treated in accordance with the provisions of this Code and the relevant provisions of the Act. A moneylender must inform an affected consumer that his/her moneylending agreement has been assigned to a third party as soon as practicable after assigning the moneylending agreement. This requirement does not apply where the moneylender, by agreement with the third party, continues to service the moneylending agreement vis-a-vis the consumer.
The Deputy may wish to know that the Consumer Protection Code 2012 is issued pursuant to powers under the following legislation:-
Section 117 of the Central Bank Act 1989
Section 23 and section 37 of the Investment Intermediaries Act 1995
Section 8H of the Consumer Act 1995 and
Section 61 of the Insurance Act 1989
The Central Bank has power to administer sanctions for a contravention of this Code, under Part 111C of the Central Bank Act 1942.
356. Deputy Mattie McGrath asked the Minister for Finance if the Central Bank of Ireland and the Financial Service Regulatory Authority of Ireland is aware of discrepancies between Allied Irish Bank's Annual Financial Report of 2008 and documents filed by Allied Irish Bank with the Company Registration Office in 2008 in relation to a first floating charge placed in favour of the Central Bank over all of AIB's right, title, interest and benefit, present and future in and to eligible securities; and if he will make a statement on the matter. [17626/13]
View answer357. Deputy Mattie McGrath asked the Minister for Finance if a charge by way of a first floating charge placed in favour of the Central Bank of Ireland over all of Allied Irish Bank's right, title, interest and benefit, present and future is in and to each of the eligible securities or is in and to certain segregated securities; and if he will make a statement on the matter. [17627/13]
View answerI propose to take Questions Nos. 356 and 357 together.
I have been informed by AIB that there was no discrepancy in the wording of AIB's 2008 Annual Report and the documents filed by AIB at the Company Registration Office in relation to a first floating charge placed in favour of the Central Bank over all of AIB's right, title, interest and benefit, present and future in and to eligible securities.
The Charge by way of a first and floating charge is to certain segregated securities as specified by the bank in accordance with the terms of Target 2. The charge referred to in the question is a charge made by AIB to the CBI in relation to its obligations due to participation in Target 2. Target 2 is a real time gross settlement system for the Euro, used for the settlement of central bank operations, large-value interbank transfers as well as other Euro payments. It allows for payments to be processed continuously rather than in time delayed batches.
As the participation of banks in the system generates risk to the operator of the system i.e. the Euro system of Central Banks including the Central Bank of Ireland, a requirement of the Target 2 system is a floating charge over the Bank's eligible securities. In accordance with the terms of Target 2, and as referred to in the deed of charge, the Bank specifies to the CBI which of its holdings of eligible securities provide the security from time to time. The specified or "segregated" securities must be of an amount which covers the bank's obligations to the system.
The charge is structured as a floating charge in recognition of the standard operations of banks whereby they change their available eligible securities on an on-going basis. Within the detail of the charge there is then a mechanism to allow the floating charge to cover a specific subset of the banks' securities from time to time as designated by the bank.
The deed of charge specifies the meaning of segregated to be those eligible securities which have been identified by AIB to the CBI and also specifies that where the value of the eligible securities which have been identified exceed the value of the payments being settled by AIB, then AIB can resubmit a schedule of segregated securities reducing them to meet the required value.
358. Deputy Heather Humphreys asked the Minister for Finance his views on including the cost of bin collections under the local property tax charge as is the case in Northern Ireland; and if he will make a statement on the matter. [17679/13]
View answerThe introduction of the Local Property Tax will provide a stable funding base for the local authority sector, incorporating appropriate elements of local authority responsibility. It will strongly reinforce local democratic decision-making and will encourage greater efficiency by local authorities on behalf of their electorates. Secondly, it will deliver significant structural reform through broadening the base for taxation in a manner that does not directly impact on employment and thereby contribute significantly to meeting the immediate financial requirement of the EU/IMF programme. According to Budget estimates the Local Property Tax is expected to generate an overall yield of €250 million in 2013 and €500 million in 2014.
Income from the LPT will accrue to the local authorities to fund local services. It will be the responsibility of each individual local authority to manage its budget appropriately, taking into account the income and liabilities that may arise from the LPT. There are no plans to include the cost of bin collections under the Local Property Tax charge.
361. Deputy Robert Dowds asked the Minister for Finance the action he proposes to take to further tackle tax fraud, in view of the findings of an investigation by the International Consortium of Investigative Journalists that between 50 to 60 Irish addresses are listed as being connected to secret offshore bank accounts with a total estimated value of €16-25 trillion and further in view of the European Commission's response to the findings of this investigation, which was to call on member states, including Ireland, to do more to tackle tax fraud in view of the fact that the cost of tax fraud to member states is an estimated €1 trillion per year; and if he will make a statement on the matter. [17682/13]
View answerI am advised by the Revenue Commissioners that they have a strong focus on ensuring optimal compliance with tax obligations and that issues of non-compliance are confronted and penalised. Revenue’s overall approach to managing compliance is to undertake a range of targeted interventions that are the most appropriate to the specific risks presented in individual cases. In 2012, Revenue carried out more than 537,000 compliance interventions, yielding more than €492 million. Revenue will continue to develop innovative ways to identify non-compliance and to bring to account those who fail to comply with their tax obligations. They will be assisted in this work by robust legislation to support compliance activities, including for example, the obligation that has been placed on merchant acquirers and other payment settlement entities to make returns of transactions to Revenue. Their work is also supported and enhanced with appropriate technology, including their Risk Evaluation Analysis and Profiling (REAP) risk identification system, capture of information from multiple sources, and integrated systems that facilitate case selection.
Ireland has been to the forefront in acting against the use of offshore accounts for the purposes of evading tax. Revenue set up a dedicated unit, tasked with identifying and investigating Irish residents engaged in this form of tax evasion in 2001. Further investigations targeting the settlement of funds and assets on trusts and similar offshore structures by Irish residents, was initiated in 2009. Schemes of voluntary disclosure and investigations undertaken have, to date, resulted in the collection of €1.1 billion in tax liabilities, statutory interest payments and penalties. This work is ongoing.
The Irish authorities would wish to avail of any additional information that might be of assistance in facilitating the continuing process of identifying persons evading tax through holding funds offshore. I am advised by the Revenue Commissioners, however, that they understand that neither the International Consortium of Investigative Journalists nor individual journalists involved in the investigation of offshore funds have, to date, made underlying data from their investigation available to tax authorities. Ireland will be liaising and cooperating with the authorities in other countries and with the OECD to consider how matters arising from the recent reports can be progressed.
Overall I am confident that the Revenue Commissioners are pursuing a programme that is dealing in a very determined way with tax evasion in all its forms and that their compliance programmes are under constant review to ensure that they are focused on the areas of greatest risk.
I would also advise the Deputy that Ireland has signed 68 bilateral Double Taxation Agreements and 21 Tax Information Exchange Agreements, which ensures a system of full exchange of tax information. Additionally, in December 2012, Ireland became one of the first countries in the world to sign an Agreement with the United States to Improve International Tax Compliance and Implement FATCA (Foreign Account Tax Compliance Act). In a public letter to the EU Commission on April 9th, five EU Member States, France, Germany, Italy, Spain and the United Kingdom, have hailed FATCA-type Agreements as representing a ‘step change in transparency’ and being the new ‘international standard’ for automatic exchange of tax information.
Combatting tax fraud and evasion has been a priority during our Presidency of the EU. The issue was an important agenda item at the Informal EcoFin Council meeting that I chaired last weekend. During our Presidency we have taken forward the work in a range of key areas:
- Seeking agreement on Draft Council Conclusions on the EU Commission Action Plan on fraud and tax evasion;
- Pursuing a VAT anti-fraud package;
- Chairing work at the Code of Conduct Sub-Group on a proposal to combat double non-taxation and other tax evasion.
Indeed, on foot of recent developments and progress made at the Informal EcoFin, further discussions will be held during May at senior official level on practical measures to combat tax fraud and evasion, in particular through potential progress on the Savings Directive. It is intended to return again to the issue of tax fraud and evasion at EcoFin before the conclusion of our Presidency.
362. Deputy John McGuinness asked the Minister for Finance the number of revenue appeals, if any, that remain unresolved for periods in excess of ten years; and if he will make a statement on the matter. [17683/13]
View answerI am informed by the Revenue Commissioners that a single figure for the number of appeals unresolved for a period in excess of ten years is likely to present a misleading picture. This is because the system used by the Revenue Commissioners to record appeals does so by reference to unsettled assessments. Thus, a single issue can give rise to a number of appeals in relation to the same taxpayer. Furthermore, in a number of instances appeals remain open because the matter in dispute is the subject of a test case involving a different taxpayer. The Revenue Commissioners are analysing their records and will provide an update to the Deputy by the end of the month.
363. Deputy John McGuinness asked the Minister for Finance if the appointment of the special liquidator to Irish Bank Resolution Corporation was in strict accordance with procurement law; and if he will make a statement on the matter. [17684/13]
View answerDue to the urgency of the appointment of the special liquidators and for commercial and confidentiality reasons it was not possible to follow standard procurement rules in relation to this appointment. Therefore emergency procedures were followed and the special liquidators were appointed following a negotiated procedure. As the Deputy will appreciate it was of the utmost importance that the potential liquidation of IBRC was kept confidential due to the scale, sensitivity and complexity of the economic issues involved. However, I can assure the Deputy that the rates that which have been agreed with the Special Liquidators are commensurate with rates agreed following a tender process undertaken by the National Asset Management Agency in relation to similar types of insolvency services.
I can assure the Deputy that this Government will always work to ensure that best value is achieved for taxpayers.
364. Deputy Patrick O'Donovan asked the Minister for Finance the reason a person (details supplied) in County Wexford has seen an increase in the income tax being taken from their private pension; the amount of additional tax that is being taken from current pensions than in past years; and if he will make a statement on the matter. [17685/13]
View answerI am advised by the Revenue Commissioners that the increase in PAYE deducted from the individual's private pension for the tax year 2013 is attributable to the fact that the tax credits for 2013 have been restricted in order to collect an underpayment of tax which arose in the tax year 2011. The underpayment for 2011 arose because the Department of Social Protection pension figure included in the Tax Credit Certificate for that year was understated. A P21 balancing statement for 2011 issued to the person in question on 27th April 2012 and advised that the underpayment would be collected by reducing the tax credits in 2013. The collection of the underpayment in 2013 means a reduction of €11.16 per week in the net pension. If this is causing difficulty, the person can contact the Wexford Tax District and if he wishes the underpayment can be spread over two or three years i.e. 2013 / 2014 or 2013 / 2014 / 2015. The contact phone number is 053 9149300.
365. Deputy Arthur Spring asked the Minister for Finance the way he intends to protect possible job losses in the retail sector (details supplied) in view of selling goods online at prices cheaper than the cost price of goods available to Irish retailers in the same industry; his views on the fairness of non-fluctuating exchange rates attributed to retail prices of goods to be sold in Ireland by UK distributors and if this is anti-competitive; and if there is a need for European legislation to compensate European Governments for loss of VAT revenue as a result of uncompetitive, unfair advantages gained by online companies established in EU countries with low VAT rates and favourable currency exchange rates relative to the euro. [17696/13]
View answerWhile recognising the very challenging conditions in which many firms are operating at the moment, particularly in the retail sector, it is not my intention to intervene to attempt to prohibit or limit in any way the legal sale of goods online. I do not believe that such an intervention would be either effective or sustainable. As regards the practices of UK distributors, this is primarily a matter for my colleague, the Minister for Enterprise, Jobs and Innovation, but I note that the Competition Authority conducted a study on the retail-related import and distribution sector in 2009 and concluded that a number of factors plays a part in the explanation of exchange rate pass-through and that these are dependent on the peculiarities of different sectors and products.
I am advised by the Revenue Commissioners that a publication notification PN 1882 - Ordering Goods for Personal Use over the Internet or from Mail Order Catalogues that is available on their website is informative in this regard. It points out that internet shoppers need to be aware of the potential full price of the goods involved since some websites do not make allowance for charges such as Customs Duty, Excise Duty or VAT. In addition, a carrier handling charge, that is distinct from a Customs charge, is generally applied by the carrier delivering the goods. This means that it is difficult to make direct price comparisons between domestic and other-EU internet sales companies.
European VAT legislation and Irish VAT legislation contain the concept of distance selling. Distance selling means a supplier established in one Member State sells goods to customers who are not registered for VAT in another Member State. Where a company established in one Member State makes distance sales to customers in another Member State the company must register and account for VAT on those sales where the value of the sales exceeds distance sales threshold, currently €35,000 in Ireland. For example, a UK established company that makes distance sales in excess of €35,000 to customers in Ireland who are not registered for VAT must register for VAT in Ireland and charge Irish VAT. The VAT distance sales rules significantly reduce the VAT advantages of internet sales companies establishing in EU countries with VAT rates that are lower than Ireland’s for the purpose of making supplies to Irish customers.
367. Deputy Willie Penrose asked the Minister for Finance his views on extending the living city initiative (details supplied) to other areas needing regeneration, such as Mullingar, County Westmeath; and if he will make a statement on the matter. [17709/13]
View answerFinance Act 2013 includes a section on the Living City Initiative which introduces a scheme of tax incentives focusing on the regeneration of the historic centres of some of our main cities. The scheme which will be introduced by Ministerial order, will apply in the first instance on a pilot basis only to specified regeneration areas in Waterford and Limerick. My Department has prepared an information note on this incentive which was published on the Department's website on 13 February last. The historic centres of some of our cities have suffered for a long time from gradual depopulation and the relocation of family homes and businesses to the suburbs, particularly during the period of the Celtic Tiger. These centres have also suffered greatly from the general economic downturn of the past few years. While I am not suggesting that this scheme is capable on its own of reversing that trend, I am convinced that it has a part to play.
The particular focus of the scheme is as follows: to encourage people back to the centres of Irish cities to live in historical buildings, in particular Georgian houses; and to encourage the regeneration of the retail heartland of central city business districts.
I indicated in my budget speech in December last year that I would examine proposals for a targeted incentive for already identified regeneration areas. The tax relief that will apply under this scheme will operate for five years from the date of commencement. However, it is my intention that before it begins, the scheme will be subject to an ex ante cost benefit analysis and, subject to a positive outcome from the analysis, I will seek EU approval under State Aid rules for this initiative to be commenced for Limerick and Waterford cities.
There are two strands to the scheme. The first involves a tax relief for the refurbishment or conversion of Georgian houses for residential purposes. The relief will only apply to owner occupiers and not for rented residential accommodation. It is not a section 23 provision, which was relief for investors.
The second strand is a scheme of accelerated industrial buildings allowances for the conversion and refurbishment of retail premises although other business services will also be allowed where the premises is a Georgian building. In such cases the commercial element will be confined to the ground floor or basement with a residential element upstairs. The allowance is at a rate of 15% per annum for six years and 10% in year seven and is subject to the normal balancing charges of allowances if disposed of within that time period. I have not yet decided on the exact boundaries of the regeneration areas in these cities but I will be consulting with my Government colleagues and the relevant local authorities beforehand before I make any final decision.
I hope these reliefs will help to restore some of these inner city areas to their former glory. The prevalence of Georgian houses is a particular characteristic of the built environment of many Irish cities. While some of these Georgian buildings have fallen into a state of disrepair and dereliction, my colleague, the Minister for Arts, Heritage and the Gaeltacht, and I have been exploring ways in which to promote and support the regeneration of these city centres. This pilot scheme is a targeted initiative which is aimed specifically at Georgian areas and I do not intend to go beyond this at this stage.
The reliefs I am introducing are an attempt to encourage people back into the cities to raise their families and if possible to operate their businesses from there. It will not be possible to revitalise these inner city areas without this happening. Pobal, the State agency that supports local communities, has developed a sophisticated index which measures deprivation in different local areas across Ireland. Taking into account the deprivation statistics from the 2011 census, both Limerick and Waterford scored as the most disadvantaged of our major cities. Furthermore unemployment rates in these cities are also the highest, significantly worse than the national average. Both have their own unique problems regarding unemployment and social problems and for these reasons I have selected them alone for the pilot phase of this initiative.
