Pearse Doherty
Question:68. Deputy Pearse Doherty asked the Minister for Finance the amount of revenue raised per quarter in 2013 from the 3% increase in DIRT tax introduced in budget 2013. [39893/13]
View answerTax Yield
Questions (68)
Written answers
The Budget change referred to in the question was estimated to yield €50 million in 2013. The yield from Deposit Interest Retention Tax (DIRT) is influenced by a number of factors, such as changes in the level of deposits held in financial institutions and interest rates, as well as budgetary changes in the tax rate. I am informed by the Revenue Commissioners that figures for DIRT tax receipts are not compiled in such a manner as would identify the impact of the Budget 2013 change in the tax rate to be separately identified. The increase in Budget 2013 did not have any effect on the January 2013 DIRT payment, since that related to interest payments in the last quarter of 2012, before the increase took effect.
Tax Code
Questions (69)
Denis Naughten
Question:69. Deputy Denis Naughten asked the Minister for Finance the steps taken to date to implement the ten-point tax reform plan to help small business outlined in budget 2013; the outstanding measures under the plan; the uptake of the measures to date; and if he will make a statement on the matter. [39906/13]
View answerWritten answers
Small and medium sized businesses make up over 99% of businesses in Ireland and account for almost 70% of people employed. Despite Ireland’s reputation as one of the world’s most globalised economies, 64% of private sector workers are employed by indigenous non-exporting firms, with 56% working for indigenous, non-exporting small businesses. These numbers highlight the importance of domestic demand for sustaining and generating employment in Ireland, and suggest that our recovery strategy needs to give some additional support to small businesses.
To that end, the 10 Point Tax Reform Plan contains measures to assist small business in a number of ways by:
Helping their cash flow position;
Helping them access funding;
Reducing the costs associated with the administrative burden of tax compliance;
Boosting demand for their products in new markets; and incentivising them to create jobs.
The measures are as follows:
1. Reforming the 3 Year Corporation Tax Relief for Start Up Companies to allow unused credits to be carried forward to help create jobs and improve cash flow
2. Amending the Close Company Surcharge by increasing the de minimis level to €2,000 to reduce the administrative burden and assist cash flow
3. Increasing the amount of expenditure eligible for the R&D Tax Credit on a full volume basis (without reference to the 2003 base year) to €200,000 to encourage innovation and help cash flow
4. Increasing the VAT cash receipts basis accounting threshold from €1m to €1.25m to help cash flow
5. Extending the Foreign Earnings Deduction for work related travel to Algeria, Democratic Republic of Congo, Egypt, Ghana, Kenya, Nigeria, Senegal & Tanzania to help boost demand for Irish goods and services abroad
6. Extending the Employment and Investment Incentive scheme to 2020 to help companies access funding
7. Extending the general rate and Young Trained Farmers rate of stock relief and amendments to the definition of registered partnerships for stock relief to give a targeted assistance to the farming sector
8. Introducing a Capital Gains Tax relief for Farmers for land restructuring to give a target assistance to the farming sector
9. Reviewing the ‘carried interest’ provision in the tax code to help small businesses to access funding
10. Announcing a joint Revenue and Department of Finance public consultation: ‘Taxation of Micro Enterprises: Reduction in Compliance Costs’ to identify ways to ease the administrative burden
Measures 1 to 9 were implemented in Finance Act 2013 which was enacted in March 2013. Revenue data on take-up of the various measures will not be available until the 2013 income and corporation tax returns of relevant businesses are filed with Revenue. The exact filing date will depend on individual circumstances but in the main will arise in Q4 2014.
To elaborate on some of the specific items in the plan, I would note that in relation to Measure 4, the annual turnover threshold for eligibility for the cash basis of accounting for VAT was increased from €1 million to €1.25 million in Budget 2013 with effect from 1 May 2013. While there are no direct statistics available, it is expected that over 800 businesses will have benefitted from this Budget change.
In relation to Measure 5, the Foreign Earnings Deduction was extended in Finance Act 2013 to include the countries listed above. This relief is available to all qualifying persons travelling to these countries for work-related travel for the tax years 2013 and 2014. In relation to Measure 6, the EII is a state aid scheme and accordingly, the approval of the European Commission is required. An application was made to the European Commission in June to extend the EII until 2020. Officials continue to engage with the Commission in relation to the application and the extension will be implemented as soon as possible, once approval has been received.
In respect of Measure 7, extending the general rate and Young Trained Farmers rate of stock relief and amendments to the definition of registered partnerships for stock relief to give a targeted assistance to the farming sector, provision was made in Finance Act 2013 and a Statutory Instrument will need to be signed once agreement has been indicated by the Department of Agriculture, Food and the Marine.
As regards Measure 8, Section 48 of Finance Act 2013 provides for relief from capital gains tax on disposals of farm land for farm restructuring, subject to a Commencement Order, which I made on 6 June 2013 (due to the need to obtain EU State Aid approval for the measure). The relief applies to a sale, purchase or exchange of agricultural land in the period from 1 January 2013 to 31 December 2015 where Teagasc has certified that a sale and purchase or an exchange of agricultural land was made for farm restructuring purposes. The initial sale or purchase, or the exchange, must occur in the relevant period and the subsequent sale or purchase must occur within 24 months of that sale or purchase.
Measure 9 relates to reviewing the ‘carried interest’ provision in the tax code to help small businesses to access funding. Following a review of the carried interest provisions in the tax code, Finance Act 2013 made a number of changes with the aim of making the provisions operate as intended. Firstly, it extends the scope of the relief so that it is not limited to carried interest derived from investment in trading companies at the start-up phase only. Secondly, it links the relief to the overall performance of the investment portfolio of the qualifying venture capital fund. Thirdly, it reduces the duration of the period for which the investment in the target companies must be held from 6 years to 3 years. Lastly, it extends the relief that is currently available to companies and partnerships to individual venture fund managers. These amendments are designed to assist companies engaging in innovation activities to access investment from venture capital funds.
As yet, no information is available on the number of people who have availed of CGT farm restructuring relief and/or availed of the revised carried interest provisions because they will be applied for via personal income tax returns for 2013 which will not be submitted until late in 2014. It is not anticipated that these returns will include a provision for the separate capture of specific information in relation to these incentives.
Finally, in respect of Measure 10, ‘Taxation of Micro Enterprises: Reduction in Compliance Costs’, the public consultation closed in February 2013, and only a small number of submissions were received (7 in total). The results of the consultation are being considered by the Department of Finance and the Revenue Commissioners at present, with a view to identifying next steps.
Employment Investment Incentive Scheme
Questions (70)
Denis Naughten
Question:70. Deputy Denis Naughten asked the Minister for Finance when proposals were submitted to the EU Commission for approval of section 22 of the Finance Act 2013; the reason for the delay in obtaining approval; when it is envisaged that approval will be obtained; and if he will make a statement on the matter. [39907/13]
View answerWritten answers
The Employment and Investment Incentive (EII) is a tax incentive which provides income tax relief for investment in certain corporate trades. Relief is initially available to an individual at 30%, with a further 11% tax relief available where it has been proven that employment levels have increased at the company at the end of the holding period. The EII commenced on 25 November 2011. Prior to this the Business Expansion Scheme (BES) was in operation. As part of Budget 2013 I announced a 10 point tax reform plan to help small business. One of the measures in this plan was the extension of the EII from its current expiration date of the end of 2013 to the end of 2020 in order to provide certainty to investors and companies. As the EII is a state aid scheme, the approval of the European Commission is required. Accordingly, an application was made to the European Commission in June to extend the EII until 2020.
Officials continue to engage with the Commission in relation to the application. However, at this stage, it is not possible to indicate when the approval of the European Commission will be forthcoming. I have been assured that the extension will be implemented, as soon as possible, once approval has been received. In addition to the extension of the scheme, I also announced the inclusion of hotels, guest houses and self-catering accommodation in the EII, subject to certain conditions. This amendment did not require the approval of the European Commission and is currently available to qualifying businesses.
VAT Rates Reductions
Questions (71, 72)
Michael McGrath
Question:71. Deputy Michael McGrath asked the Minister for Finance the cost that would be incurred in 2014 if the current reduced 9% rate of VAT was to continue for an additional year; and if he will make a statement on the matter. [39936/13]
View answerMichael McGrath
Question:72. Deputy Michael McGrath asked the Minister for Finance the approximate revenue foregone as a result of the 9% VAT rate in each year since its inception in 2011; and if he will make a statement on the matter. [39957/13]
View answerWritten answers
I propose to take Questions Nos. 71 and 72 together.
The 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. The measure was estimated to cost €120 million in 2011, €350 million in 2012, €350 million in 2013, and €60 million in 2014. As the rate was introduced for a defined period, failure to revert the 9% rate to 13.5% would give rise to an annual Budget shortfall of €350m in a full year.
Pensions Levy Yield
Questions (73)
Michael McGrath
Question:73. Deputy Michael McGrath asked the Minister for Finance the revenue raised from the pension levy in 2013; and if he will make a statement on the matter. [39958/13]
View answerWritten answers
The yield to date from the 0.6% stamp duty levy on pension fund assets in respect of 2013 is €110 million. However, the deadline date by which payment of the levy is due for 2013 is today (25 September 2013). It will take some days before the data on the yield as at the deadline date feeds through the Revenue Commissioners’ systems. The information should be available at the time of the publication of the end-September 2013 tax returns (2nd October) and I will ensure that the Deputy is updated with the information on the pension fund levy yield at that time.
Tax Yield
Questions (74)
Michael McGrath
Question:74. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the revenue from the air travel tax in each year since 2010 and to date in 2013; and if he will make a statement on the matter. [39959/13]
View answerWritten answers
I am informed by the Revenue Commissioners that the revenue from air travel tax for the years 2010, 2011, 2012 and the first eight months of 2013 is as follows:
|
- |
€m |
|
2010 |
104.7 |
|
2011 |
47.9 |
|
2012 |
33.6 |
|
2013 (Jan to Aug) |
22.3 |
Please note that the receipts shown for 2013 are provisional and may be subject to revision.