Written Answers Nos. 277-296
278. Deputy Michelle Mulherin asked the Minister for Finance when the Revenue Commissioners regulations on the fuel rebate for bus and coach operators will be in place; and if he will make a statement on the matter. [24307/13]
View answerI am informed by the Revenue Commissioners, who have responsibility for the operation of the repayment scheme, that Regulations to provide for the administration of the scheme are being prepared and will be in place before it comes into operation on 1 July this year. Revenue is continuing to consult with road transport operators and other business interests about those administrative requirements and information on the scheme will be made available on the Revenue website.
279. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 187 of 30 April 2013, where he stated that tax relief for investment in films cost the Exchequer €42 million in the last full tax year for which there is data, if he will set out the criteria involved in availing of film tax relief; the number of persons that availed of the relief that year; if his attention has been drawn to any abuse of the relief scheme; and if so, the action he has taken to curtail the abuse. [24309/13]
View answer280. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 187 of 30 April 2013, where he stated that exemption of profits or gains from woodlands claimed from the Exchequer was €48.2 million in the last full year of data, which the maximum tax cost of €14.4 million, if he will set out the criteria for this tax exemption; the way it operates; his views on whether it is having any impact on agricultural development; or if there is an abuse of the scheme. [24310/13]
View answerI propose to take Questions Nos. 279 and 280 together as they were previously answered together in the PQ referred to in the question.
The first question asks about tax relief for investment in films and I am advised by the Revenue Commissioners that the Section 481 Film Tax relief cost €45.7 million for the 2011 tax year and the number of investors was 2,669.
The Film Relief scheme currently provides tax relief towards the cost of production of qualifying films. The maximum amounts which can be raised under the scheme are up to 80% of the cost of production for all budgets up to a maximum of €50,000,000.
Tax relief on 100% of their investment is available to individual investors and to corporate investors.
Individual investors can invest up to €50,000 under the scheme in any year of assessment and will be entitled to tax relief on that amount at their marginal rate of tax. An investor who cannot obtain relief on all his/her investment in a year of assessment, either because his/her investment exceeds the maximum of €50,000 or his/her income in that year is insufficient to absorb all of it, can carry forward the unrelieved amount to following years up to and including 2015, subject to the normal limit of €50,000 on the amount of investment that can be relieved in any one year.
A corporate investor and any connected companies can invest up to €10,160,000 in any 12 month period. The company will be entitled to a deduction, from its total profits, of the amount invested. There is provision for carry forward of an unrelieved amount. The total amount which can be invested by a company, in any one film, cannot exceed €3,810,000.
The Revenue Commissioners took over the certification of films qualifying for Film Relief in 2005 and my attention has not been drawn to any abuse in relation to films certified by them. Prior to then there was a number of tax avoidance schemes involving Film Relief which have been challenged by Revenue and the legislation has been changed as required over the years.
Finance Act 2013 introduced changes to give Film Relief a new focus. The delivery mechanism of the incentive will change. Relief will not, in the future, be available to investors in qualifying films. Instead a payable tax credit of 32% will be paid directly by the Revenue Commissioners to a Producer Company, which produces a qualifying film. The legislation provides for measures to ensure that, in the event that the qualifying company does not satisfy any statutory conditions or conditions imposed by a film certificate issued by the Revenue Commissioners, any amount paid by the Revenue Commissioners can be recouped.
The commencement of the section is subject to EU approval. The changes are expected to be effective from the 1 January 2016. The current scheme expires on 31 December 2015.
The second question asks about the tax exemption for profits or gains from woodlands. The details in Parliamentary Question 20065/13 to which the Deputy refers relate to exemptions contained in Sections 232 and 140 of the TCA 1997. I am advised by the Revenue Commissioners that profits or gains from the occupation of woodlands in the State managed on a commercial basis are exempt from Income Tax and Corporation Tax, (but not from the USC or PRSI) under Section 232 TCA 1997. Section 140 provides that distributions paid out of such exempt profits or gains are not regarded as income for the purposes of the Taxes Acts. The exemption granted to such profits, gains and dividends is, however, subject to the High Earners Restriction.
For chargeable periods commencing on or after 1 January 2004 details of all such profits, gains and losses must be included in the annual return of income to the Revenue Commissioners. The normal rules relating to the keeping of records and the making available of those records for inspection by the Revenue also apply.
Capital gains arising to an individual on the sale of woodlands are also exempt from CGT insofar as they relate to standing timber. Any gain attributable to the underlying land is subject to CGT. Companies and other bodies of persons are liable to CGT on gains arising from the sale of woodlands and standing timber.
The Revenue Commissioners are not aware of any abuse of the scheme.
281. Deputy Michael McGrath asked the Minister for Finance if he will detail the various taxes that currently apply to bets placed in a bookmakers' premises here and bets placed online; if any changes are planned in this area; and if he will make a statement on the matter. [24318/13]
View answerThe only tax that currently applies specifically to bets placed in a bookmaker’s premises is betting duty. Bookmakers are liable for this duty at a rate of 1% of the amount of the bet entered into. The Finance Act 2011 provides for the taxation of bets that remote bookmakers enter into with persons in the State and betting duty at the existing rate of 1% will be applied to such bets. The Act provides also for the taxation of Betting Exchanges for the first time, at a rate of 15% tax on the commission charged. These taxation provisions will be commenced when the Betting (Amendment) Bill is enacted. This Bill was published in July last year and work has continued since on drawing up a number of amendments to the Bill to strengthen enforcement measures. It is my intention, given the number of amendments, to go back to Government in the very near future for approval to republish the Bill in this Dáil session.
282. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 51 of 9 May 2013, if he will provide the reason and not the methodology for the reason the Central Bank of Ireland acquired the 5.4% Irish 2025 bond from Bank of Ireland; if he will confirm if the reason the Central Bank of Ireland purchased the bond was to avoid Exchequer obligations for him in honouring the Ministerial guarantee that was placed over the Irish Bank Resolution Corporation Bank of Ireland repo transaction with Bank of Ireland; if he will explicitly detail the way this transaction was financed by the Central Bank or Ireland; and if he will make a statement on the matter. [24319/13]
View answerThe Central Bank of Ireland (CBI) has confirmed that, in common with other National Central Banks of the Eurosystem, it can hold financial assets only up to particular limits as part of agreements between the various members of the euro system. Furthermore the CBI has confirmed that the terms of such agreements and related issues are a matter for itself and the ECB and not something that I can comment on. As outlined in my response to PQ 19874/13, the CBI has advised that it does not comment on individual investment holdings.
283. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 51 of 9 May 2013, if he will detail if he has discussed with the Central Bank of Ireland Governor of the scope for the Governor to conduct further discussions with various members of the euro system to borrow unused financial asset holding capacity for the Central Bank of Ireland to increase its holdings in Irish Government bonds through acquiring these bonds on the secondary market and thus returning the interest to the State paid on these bonds through the Central Bank of Ireland's profits; if he will consider discussing with the Governor of the Central Bank of Ireland to acquire those Government bonds on the secondary markets from Bank of Ireland, Allied Irish Bank and Permanent TSB thus reducing the balance sheet of those banks, freeing up capital costs for those banks who have to hold regulatory capital if retaining Irish Government bonds, reducing the amount of ECB funding that is extended on foot of the Irish Government bonds collateral to those banks and return the interest payable from the Irish Government on these bonds directly to the Central Bank of Ireland and thus ultimately back to the Exchequer from the Central Bank of Ireland profits; and if he will make a statement on the matter. [24320/13]
View answerThe Central Bank of Ireland (CBI) has confirmed that, in common with other National Central Banks of the Eurosystem, it can hold financial assets only up to particular limits as part of agreements between the various members of the Eurosystem. Furthermore the CBI has confirmed that the terms of such agreements and related issues are a matter for itself and the ECB and not something that I can comment on. As outlined in my response to PQ 19874/13, the CBI has advised that it does not comment on individual investment holdings.
284. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Questions Nos 48 and 49 on 9 of May 2013, if he will detail the type of asset class the other assets with a value of €370 million that are retained by the Central Bank of Ireland as consideration for the smaller amount of outstanding IBRC borrowing under the euro system’s main refinancing operation; if he will confirm whether NAMA through its ownership of the IBRC facility deed also has a charge over these €370 million of assets; if he will detail whether the Central Bank of Ireland intends to sell these assets; if he will confirm whether these assets, if intended for sale, shall be sold in an open market process with the appointment of an independent valuer and broker as per the IBRC assets; and if he will make a statement on the matter. [24321/13]
View answerAs the Deputy may be aware, the Central Bank of Ireland does not disclose the type of assets used to collateralise Eurosystem Operations. The ECB eligible assets securing IBRC’s Main Refinancing Operation with the Eurosystem were realised by the Central Bank of Ireland in consultation with the ECB, with the value of collateral in excess of the borrowings being due back to IBRC. As these assets were realised by the Central Bank of Ireland and are no longer owned by IBRC, NAMA does not have a charge over these assets through its ownership of the IBRC Facility Deed. The investment policy of the Central Bank of Ireland and the manner of investments/divestments is a matter for the Central Bank and it would not be appropriate for me to comment in this regard.
285. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 50 of 9 of May 2013, if he will explicitly confirm whether the entities referred to in the answer concern the Irish Bank Resolution Corporation wealth management entities; if he will confirm the total euro nominal amount of loans IBRC has provided to borrowers for assets that are in the IBRC wealth management unit; if he is concerned that a sale of assets which are not wholly or majority owned on the equity side by IBRC's wealth management business could reduce the value of the loans provided against the asset sold if the asset is sold below the principal value of the loan outstanding on that asset; if he will confirm whether the special Liquidator has the power to discharge personal guarantees for loans for assets that are in IBRC’s wealth management business but are not wholly or majority owned by IBRC and where that equity interest in the asset is sold rather than the loan; and if he will make a statement on the matter. [24322/13]
View answerThe entities referred to in the answer to Parliamentary Question no 50 of 9 May 2013 do not relate to the IBRC Wealth Management business unit. The reference to entities relates to any entity in which IBRC has an ownership interest.
A number of the questions above refer to assets owned by IBRC’s Wealth Management business. I have been advised by the Special Liquidators that IBRC Wealth Management is a distinct business unit of IBRC and is not a separate legal entity. It does not have its own assets but rather manages the assets of, and acts as custodian for Wealth Management clients.
The Special Liquidators will act in a manner which protects the value of the assets and maximises the return for the taxpayer from the disposal of IBRC’s assets.
286. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question 63 of 9 of May 2013, if he will confirm whether legal proceedings have already been issued in relation to whether the insolvency of IBRC is a relevant insolvency within the meaning of the British Transfer of Undertakings (Protection of Employment) Regulations 2006 in a British court; if he will detail the total number of employees prior to the liquidation of IBRC whose employment agreements were governed by British rather than Irish law; and if he will make a statement on the matter. [24323/13]
View answerI have been advised by the Special Liquidators that no legal proceedings have been served (or to the Special Liquidator's knowledge issued) in relation to whether the insolvency of IBRC is a relevant insolvency within the meaning of the United Kingdom Transfer of Undertaking (Protection of Employment) Regulations 2006. Legal advice is currently being sought by the Special Liquidators on whether the insolvency of IBRC is a relevant insolvency within the meaning of the United Kingdom Transfer of Undertakings (Protection of Employment) Regulations 2006. The effect of those Regulations on employees will be dependent on that advice and ultimately the UK Courts under applicable law. The total number of number employees prior to the liquidation of IBRC whose employment agreements were governed by UK law rather than Irish law is 169.
287. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 63 of 9 May 2013, if the insolvency of Irish Bank Resolution Corporation is not considered a relevant insolvency within the meaning of the British Transfer of Undertakings (Protection of Employment) Regulations 2006 that this legal reality could negatively impact on IBRC asset values and thus potential IBRC asset sales before transfer to National Assets Management Agency; and if he will make a statement on the matter. [24324/13]
View answerI have been advised by the Special Liquidators that legal advice is currently being sought whether the insolvency of IBRC is a relevant insolvency within the meaning of the United Kingdom Transfer of Undertakings (Protection of Employment) Regulations 2006 and the effect of those Regulations will be dependent on that advice. The effect of the Regulations on asset values will be a matter for the potential purchasers of those assets.
288. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 187 of 30 April 2013, where he stated a figure of €52.6 million claimed and €19.5 million in assumed maximum tax costs in 2009 for other exemptions claimed by 635 people, if he will state what other exemptions consist of and the number of persons claimed per category. [24326/13]
View answerIn the tax return Form 11 the majority of property based incentive schemes on which relief could be claimed for 2009 are listed at Lines 901 – 929 inclusive. On the Corporation Tax return the majority of these reliefs are listed at lines 15.1 to 15.25 of the return form CT1. However, there are also certain older schemes where taxpayers may still wish to claim relief. Each taxpayer wishing to claim relief in respect of an investment in a scheme not provided for in Lines 901 – 929 on the form 11 or on lines 15.1 to 15.25 of the Corporation Tax return is requested to enter the appropriate details of the relevant scheme and the amount of relief claimed in a space provided in Line 930 on the form 11 and Line 15.26 on the CT1 .
These entries are the source of the figures for which claims from 635 claimants amounting to €52.6 million at an estimated cost of €19.5 million were included in the category of "Other" in the answer I gave to the deputy's parliamentary question number 187 of 30 April last. An extract of these entries has been compiled and a breakdown of the main examples is as follows.
|
Relief |
Number of Entries |
|
Relief not specified |
194 |
|
Section 23 relief |
74 |
|
Student accommodation |
22 |
|
Temple Bar |
7 |
The remainder of the entries, a significant number,were input in various non-standard formats which makes categorisation of the types of relief involved very difficult. Examples of these entries were “multiple”, “owner occupier” and the frequent entry of specific property addresses.
289. Deputy Pearse Doherty asked the Minister for Finance the reason a student applying for stamp duty exemption under the transfer of land to young trained farmers, who successfully completed an honours BSc in agricultural technology at Queens University Belfast would be required to provide an additional letter of equivalence from Teagasc at the cost of €150; the reason there appears to be no consideration given to any education institutions in North of Ireland that award degrees in agriculture; and if he will make a statement on the matter. [24327/13]
View answerI am advised by the Revenue Commissioners that the conditions for qualifying for the Stamp Duty exemption for transfers of land to young trained farmers include the following [s.81AA Stamp Duties Consolidation Act 1999 refers]:
- The young trained farmer must be aged under 35 at the date of execution of the deed;
- S/he must furnish a declaration (to his/her solicitor/filer who will be filing the on-line self-assessed return) to the effect that s/he will, for a period of five years from the date of execution of the deed, spend not less than 50% of his/her normal working time farming the land and will retain ownership of the land for that period.
- In addition, the transferee must have attained one of the necessary qualifications set out in the relevant law and listed in Revenue Leaflet SD2B, available at http://www.revenue.ie/en/tax/stamp-duty/leaflets/sd2b.pdf . The training qualifications are subject to approval by Teagasc, which is under the aegis of the Department of Agriculture, Food and the Marine, and cover specific awards made by the Further Education and Training Awards Council (FETAC) and the Higher Education and Training Awards Council (HETAC). In addition, certain degrees awarded by University College Dublin and University of Limerick fulfil the criteria.
I am advised by the Minister for Agriculture Food and the Marine and by Teagasc that as the course in question is not listed on Revenue Schedule SD2B (qualifications recognised for Stamp Duty Exemption) an applicant is allowed by Revenue to request Teagasc to ascertain if the course is equivalent to courses listed.
If Teagasc deems the qualification to be equivalent, it issues a letter of equivalence. In doing so Teagasc is required to certify to Revenue that the qualification corresponds to the qualification listed on the Revenue SD2B schedule. This requires Teagasc to examine the qualification in detail and ensure that it has appropriate agricultural production content, farm business planning and farm management and succession plan content. Not all agricultural qualifications have appropriate content.
Teagasc has a schedule of charges in this regard and the charges for assessing equivalence for a qualification obtained outside of the Republic of Ireland amounts to €150.
291. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer, based on the last full year of data, if the surcharge amount applied to late filing of tax returns was increased to 6% after one month and 12% after two months; the current interest rate on late returns; and the estimated return for the Exchequer if interest on late payments was applied to all returns and not left to the Revenue to decide on a case by case basis. [24347/13]
View answerI am advised by the Revenue Commissioners that the current rate of surcharge for late filing of both Income Tax and Corporation Tax returns is 5% of the tax due subject to a maximum of €12,695 where the return of income is delivered before the expiry of 2 months from the specified return date for the chargeable period, or 10% of the amount of tax due subject to a maximum of €63,485, where the return of income is not delivered before the expiry of 2 months from the specified return date for the chargeable period 2011 is the most recent full year of data available and for companies with an accounting period ending in 2011, 5,844 were charged a late filing surcharge, totalling, €1,700,816.
In addition, 19,120 individuals were also surcharged for late filing, totalling €3,556,650
However, it is very difficult to estimate the impact on the Exchequer of a change in the rate of the surcharge. The surcharge is designed as a deterrent to encourage timely filings and payments, and compliance levels are positive. The Irish self-assessment system ensures that there are tight controls in place for tax return filing and payment rates which are borne out by the 2012 statistics for timeliness of 98% for large cases, 96% for medium cases and 82% for all other cases, across all taxes.
With reference to the current interest rate on late returns, I am advised by the Revenue Commissioners that late filing surcharges apply to late returns whereas interest is charged on late payments. The current rates of interest on late payments are 8% per annum or 0.0219% per day, on overdue income, corporation or capital gains taxes and 10% per annum or 0.0274% per day in respect of overdue fiduciary taxes such as VAT and PAYE/PRSI.
I am advised by the Revenue Commissioners that given the high levels of return filing and payment compliance that were achieved in 2012, the targeted application of interest charges to cases with the most serious compliance issues is a strategy that has worked extremely well for the Commissioners and has brought about a sustainable change in compliance behaviour in a large number of cases. In addition, it fits with Revenue’s overall approach to compliance matters by deploying resources to the areas with the greatest risks and, the Commissioners further advise that applying interest charges in all cases of late payment would undermine what has been, on a consistent basis, a very successful compliance strategy.
I fully support the balanced approach to collection by Revenue that tries to maximise voluntary compliance with a balanced approach to collection of arrears from businesses that run into temporary funding difficulties. Revenue’s care and management provisions are provided for in legislation and are an integral part of the tax administration system.
293. Deputy Bernard J. Durkan asked the Minister for Finance in the context of foreclosures by lending agencies in each of the past four years to date, the number of instances in respect of which the property or business was in negative equity; the number of instances where the property or business was known not to have been in negative equity; and if he will make a statement on the matter. [24388/13]
View answer294. Deputy Bernard J. Durkan asked the Minister for Finance the total number of house repossessions recorded in each of the past four years to date; the number of such properties deemed to have been in negative equity at the time of repossession; and if he will make a statement on the matter. [24389/13]
View answer304. Deputy Bernard J. Durkan asked the Minister for Finance if known, the extent, to which lending agencies have insured against bad debt; the extent to which any such insurance has been monitored in the case of house or other property repossessions; and if he will make a statement on the matter. [24399/13]
View answerI propose to take Questions Nos. 293, 294 and 304 together.
The Central Bank has informed me that the number of PDH and buy-to-let properties taken into banks’ possession in each quarter since 2009 Q3 is available on the Central Bank’s website at http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/Data.aspx .
The Central Bank has also advised that it does not publish data on whether a property was in negative equity, or not in negative equity, at the time of repossession.
The Central Bank has also informed me that insurance against bad debts on credit portfolios is not the norm in the Republic of Ireland (ROI) market. The level of repossessions of houses has been very low in the ROI marketplace as evidenced by the CBI quarterly publication on Mortgage Arrears and Repossessions.
295. Deputy Bernard J. Durkan asked the Minister for Finance if known, the extent to which house property disposed of by the National Assets Management Agency has been purchased by first time buyers with a housing need, investors and/or syndicates; and if he will make a statement on the matter. [24390/13]
View answer296. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which house properties disposed of by the National Assets Management Agency and purchased by investors or syndicates have been funded by borrowing to facilitate the investments; and if he will make a statement on the matter. [24391/13]
View answerI propose to take Questions Nos. 295 and 296 together.
NAMA’s role in relation to properties is, like a bank, that of a secured lender. NAMA does not own nor does it sell properties securing its loans. Rather, the sale of such properties is managed by NAMA debtors or the receivers, if one is in place.
I am advised by NAMA that it does not have access to the data on purchasers of residential properties sold by NAMA debtors and receivers that the Deputy has sought. However, the Deputy may be aware that purchasers of residential properties under NAMA’s 80/20 Deferred Payment Initiative, which has to date been made available in respect of over 400 properties and which the Agency expects to extend on a phased basis to 750 properties, must confirm that they are owner occupiers in order to the avail of the Initiative’s price protection. In addition, NAMA has made over 4,000 houses and apartments available through the Housing Agency to local authorities and Approved Housing Bodies for social housing and is working in conjunction with the Minister for the Environment, Community and Local Government and the Minister for Housing and Planning to ensure the greatest possible delivery of these properties for social housing in line with identified demand by the relevant local authority/AHB.
Furthermore, I am advised that NAMA does not have access to the investment goals or data on the sources of funding used by purchasers of properties.
