Written Answers Nos. 197-221
198. Deputy Pearse Doherty asked the Minister for Finance the grounds on which online bookmakers and betting intermediaries are exempt from the payment of VAT; and if he will make a statement on the matter. [8095/14]
View answer199. Deputy Pearse Doherty asked the Minister for Finance the way online bookmakers that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT and corporation tax. [8096/14]
View answer200. Deputy Pearse Doherty asked the Minister for Finance the way remote betting intermediaries that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT and corporation tax. [8097/14]
View answer201. Deputy Pearse Doherty asked the Minister for Finance the way online bookmakers not based in the EU that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT. [8098/14]
View answer202. Deputy Pearse Doherty asked the Minister for Finance the way remote betting intermediaries not based in the EU that will operate here following the passing of the Betting (Amendment) Bill 2013 will be treated for the purposes of VAT. [8099/14]
View answer203. Deputy Pearse Doherty asked the Minister for Finance if the Revenue Commissioners are satisfied that the State is receiving all VAT due from the online gambling industry; and the total tax revenue raised in 2013 from the industry. [8100/14]
View answerI propose to take Questions Nos. 198 to 203, inclusive, together.
I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Article 135(1)(i) of the EU VAT Directive (Council Directive 2006/112/EC) provides that Member States shall exempt betting, lotteries and other forms of gambling, subject to the conditions and limitations laid down by each Member State. The Value-Added Tax Consolidation Act 2010 provides that the acceptance of bets that are subject to betting duty are exempt from VAT. The Betting (Amendment) Bill 2013, currently before the Houses of the Oireachtas, proposes to licence remote bookmakers and betting intermediaries. Once the Bill is enacted, section 49 of the Finance Act 2011, which provides that these operators are chargeable with betting duty and betting intermediary duty under Chapter 1 of Part 2 of the Finance Act 2002, will be commenced.
The acceptance of bets is the supply of a service for VAT purposes. The place of supply of a service to a non-taxable person for VAT purposes is the place where the supplier's business is established. The extension of the betting duty to remote (online) bookmakers and betting intermediaries will not, of itself, bring such operators within the scope of Irish VAT if they are not established in Ireland. The specific facts of each case would have to be considered in deciding if an operator is established in Ireland. Similarly, the extension of the betting duty will not, of itself, bring operators within the charge to corporation tax. The corporation tax code looks at whether non-resident companies, which carry on a trade here through a branch or agency, are chargeable to tax by reference to whether the branch or agency-related income may be attributable to a permanent establishment here.
Businesses, such as bookmakers, that are exempt from VAT are not required to register for VAT in relation to their supplies or to make bi-monthly VAT returns. Businesses that are registered for VAT generally make a bi-monthly return that simply provides details of the total VAT on sales and the total VAT on purchases. Businesses that are not established here have no requirement to make Irish VAT returns. For these combined reasons it is not possible to report the total tax revenue raised in 2013 from the industry.
I am advised by the Revenue Commissioners that their overall approach to tackling compliance is to make the appropriate intervention following careful appraisal of the risk factors in each case. Not all interventions conducted are in the form of an audit. The focus may vary from a comprehensive examination of all the taxes and duties for which a taxpayer may be liable, to a detailed check of a single tax-head, or a concentration on a single issue of concern. This targeted approach is greatly supported and enhanced with appropriate technology, including the Risk Evaluation Analysis and Profiling system REAP, integrating information obtained from multiple sources, and categorising taxpayers in accordance with defined risk criteria, including details of the compliance behaviour of the taxpayer in relation to filing and paying their taxes.
204. Deputy Pearse Doherty asked the Minister for Finance if there is a prohibition on the advertising of betting on Gaelic football and any others sport under the Betting Act 1931; and if he will make a statement on the matter. [8101/14]
View answerSection 32 of the Betting Act 1931 deals with the prohibition of advertising relating to betting on football games and provides that, other than in the case of the distribution of advertising by the registered proprietor of a registered premises in such premises, "it shall not be lawful for any person to write, print, publish or knowingly circulate any advertisement, circular or coupon advocating or inviting or otherwise relating to betting on football games or knowingly to cause or procure, or attempt to cause or procure, any such advertisement, circular or coupon to be written, printed, published or circulated".
As the Deputy is aware the Betting (Amendment) Bill, currently before the House provides for the licensing and regulation of the remote betting sector. Matters pertaining to public order will form part of the forthcoming Gambling Control Bill.
205. Deputy Seamus Healy asked the Minister for Finance if he will reverse the budget 2014 measure regarding health insurance due to the fact that as a result health insurance premiums have been increased excessively; and if he will make a statement on the matter. [8154/14]
View answerIn the first instance, decisions taken to increase the cost of health insurance premiums are made by health insurance providers and are beyond my control. However, it is the case that in Budget 2014 tax relief for medical insurance premiums was restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceilings no longer qualifies for tax relief.
The cost of Income Tax relief in respect of medical insurance has increased significantly in recent years, estimated at €404 million in 2011, €448 million in 2012 and €500 million in 2013. Despite the increasing cost of the relief, the number of individuals insured has reduced over the same period, while at the same time the level of medical cover has decreased on some policies. Against this background the increase in costs is unsustainable. If the relief were to remain unchanged and the trend was to continue, the cost would increase to approximately €1 billion by 2020.
Prior to this reform the State was effectively paying 20% of the cost of all private medical insurance premiums via the system of income tax relief. In effect this means that those taxpayers who could never afford private health insurance, or who have had to give up their policies due to personal circumstances, are providing financial support via the tax system to those individuals who can afford such insurance.
Although it is true that the restriction of the tax relief may have in some cases, led to a net increase in medical insurance premiums payable by individuals, it should be noted that many would only be affected marginally, depending on the cost of the policies that individuals choose to purchase.
The measure to restrict tax relief in respect of medical insurance premiums was approved by the Dáil via Financial Resolution on Budget night and confirmed by the Oireachtas via the enactment of Section 8 of Finance (No. 2) Act 2013, which was signed into law by the President on 18 December 2013. I have no plans to review the restriction in the short term.
206. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question No. 137 of 22 October 2013, if he will publish the independent advice from PwC in relation to the way the residential mortgage portfolio and other loans in Irish Bank Resolution Corporation are to be dealt with, sought by the IBRC special liquidators. [8165/14]
View answer207. Deputy Stephen S. Donnelly asked the Minister for Finance if a scenario was modelled in which individual mortgagors, whose loans have ended up with Irish Bank Resolution Corporation would be able to bid on their own loans; and if such a scenario was modelled, he will publish same. [8166/14]
View answer208. Deputy Stephen S. Donnelly asked the Minister for Finance if analysis has been carried out that indicates the potential loss in return to the State if individual mortgagors were permitted to bid on their own loans, as opposed to splitting the Irish Bank Resolution Corporation loan book into four segments, as currently planned; and if so, if he will publish the difference in sale value. [8167/14]
View answerI propose to take Questions Nos. 206 to 208, inclusive, together.
There is an obligation on the Special Liquidators to ensure that maximum value is extracted from the loan sales process for the benefit of all the creditors of IBRC including the State. The sales process plan and timeline for the sale of the residential mortgage portfolio has been developed following professional advice and in light of requirements for a robust and credible sales process in that context. Neither I nor my officials had any role in the development of the sales process plan for the residential mortgage book.
The Special Liquidators have given significant consideration to and have sought independent advice from PwC in relation to how the residential mortgage portfolio is to be dealt with. Following that independent advice, the Special Liquidators have decided that the residential mortgage book would be sold in portfolios with a view to maximising market interest and return within the timelines set out in the Ministerial Instructions.
I am advised that it is for this reason that the Special Liquidators have decided not to accept any bids from individual mortgage holders, however mortgage holders are permitted to buy out their mortgage at par value and that there are no legislative barriers for such Borrowers to do so.The Special Liquidators will not be publishing the independent advice received in relation to the sales process and timeline as it is commercially sensitive information which could potentially have a detrimental impact on asset recovery from the impending sale process.
209. Deputy Stephen S. Donnelly asked the Minister for Finance if a date has been set by the special liquidator for the sale of the Irish Bank Resolution Corporation residential mortgage book, or any parts thereof; and if he will make a statement on the matter. [8168/14]
View answer210. Deputy Stephen S. Donnelly asked the Minister for Finance if discussions are under way with potential buyers of the Irish Bank Resolution Corporation residential mortgage book; and if he will make a statement on the matter. [8169/14]
View answer237. Deputy Michael McGrath asked the Minister for Finance in respect of the mortgage book of the Irish Bank Resolution Corporation which is in special liquidation, if he will confirm the date the mortgage book was put on the market by the special liquidators; if he will provide the details of the way the mortgage book was divided for the purposes of the sale; the overall value of the mortgage book; the deadline by which bids for the mortgage book had to be submitted; the current status of the sales process; if any problems have been identified with the supporting documentation underpinning the loans; when a decision on any sale will be made; and if he will make a statement on the matter. [8290/14]
View answerI propose to take Questions Nos. 209, 210 and 237 together.
I am advised by the Special Liquidators that the residential mortgage portfolio of IBRC has a par value of €1.8 billion. The sales process for the residential mortgage portfolio commenced in October 2013 and following receipt of indicative bids late last year, a reduced number of bidders were progressed to Phase 2 of the sales process which launched on 29 November 2013. The Special Liquidators expect to finalise the sale of these loans in March 2014.
The Special Liquidators are obliged to ensure that maximum value is obtained from the loan sales process. In order to fulfil this obligation the Special Liquidators have given significant consideration to and have sought independent advice in relation to how the residential mortgage portfolio and other loans in the Bank are to be dealt with. Following this advice, the residential mortgage portfolio was sub-divided into four tranches to ensure that maximum value is derived for the loan assets in the timeline set out by the Minister. The valuation process for this portfolio was completed on 11 September 2013 and the sales process commenced on 14 October 2013.
211. Deputy Pearse Doherty asked the Minister for Finance further to statements by the chairman of the National Asset Management Agency on 8 March 2012 to the Joint Committee on the Implementation of the Good Friday Agreement when he stated it had made 15 insolvency appointments in Northern Ireland and made 214 appointments in total and proportionate to the portfolio and that is not unreasonable, if he will provide the up-to-date position on the quantum of insolvency appointments in Northern Ireland; and the total number of appointments made by NAMA. [8179/14]
View answerI am advised by NAMA that its enforcement in Northern Ireland is proportionate to the scale of its exposure to Northern Ireland debtors and in line with the approach adopted in other jurisdictions in which it operates. NAMA advises that it has taken enforcement against 19 Northern Ireland debtor connections and against 280 debtor connections or part thereof in total.
212. Deputy Pearse Doherty asked the Minister for Finance if he will provide, in tabular form, the amount of advances approved and actually paid over by the National Asset Management Agency to borrowers since NAMA's inception to date, categorized by jurisdiction, specifically, the South of Ireland, the North of Ireland, Britain and the rest of world. [8180/14]
View answer213. Deputy Pearse Doherty asked the Minister for Finance if he will provide, in tabular form, the amount of advances approved and actually paid over by the National Asset Management Agency to borrowers since NAMA's inception to 23 May 2012 when NAMA announced a new and additional €2 billion investment fund, categorised by jurisdiction, specifically, the South of Ireland, the North of Ireland, Britain and the rest of world. [8181/14]
View answerI propose to take Questions Nos. 212 and 213 together.
The detail sought by the Deputy is set out in tables.
New Advances: Approved and Drawn
|
- |
Approved |
Drawn |
|
From Inception To May 2012 |
€1,302.2m |
€643.3m |
|
From Inception To December 2013 |
€2,426m |
€1,160m |
New Advances: Drawn by Jurisdictions
|
- |
To May 2012 |
To December 2013 |
|
Ireland |
44% |
45% |
|
Northern Ireland |
1% |
2% |
|
Britain |
49% |
47% |
|
Other |
6% |
6% |
214. Deputy Michael Healy-Rae asked the Minister for Finance the minimum threshold amount he will allow a mortgage holder to buy back his or her mortgage from the bank (details supplied). [8186/14]
View answerThe Special Liquidators of IBRC have full control in relation to decisions concerning how the loans will be packaged for sale and what bidders constitute qualifying bidders for the purposes of the sales process. There is an obligation on the Special Liquidators to ensure that maximum value is extracted from the loan sales process for the benefit of all the creditors of IBRC including the State.
The Special Liquidators have given significant consideration to and have sought independent advice from PwC in relation to how the residential mortgage portfolio is to be dealt with. Following that independent advice, the Special Liquidators have decided that the residential mortgage book would be sold in portfolios with a view to maximising market interest and return within the timelines set out in the Ministerial Instructions. I am advised that it is for this reason that the Special Liquidators have decided not to accept any bids from individual mortgage holders.
Neither I nor my officials had any role in the development or execution of the sales process plan for the residential mortgage book.
215. Deputy Terence Flanagan asked the Minister for Finance his plans to introduce a general levy on insurance companies in order to pay for flooding incidents rather than having taxpayers footing a bill; and if he will make a statement on the matter. [8198/14]
View answerThe Government is aware of the high cost that the recent flooding and storm damage has brought to householders and businesses. The Deputy will be aware that the Government has agreed to make up to €70 million available for a programme of repair and remediation works in addition to €25 million in humanitarian assistance under a new Department of Social Protection Humanitarian Assistance Scheme. As part of the response, my Department is also undertaking a review of the availability of flood insurance cover. When the review is complete, I will examine it and report to my colleagues on what additional measures, if any, are needed to address the issue of paying for flood damage.
There are no plans at present to introduce a general levy on insurance companies in order to pay for flooding incidents. I am not in a position to direct insurance companies to provide flood cover to specific individuals. The issue of provision of new flood cover or the renewal of existing flood cover is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are accepting.
The Government is helping those who have been affected by flooding, by aiming to address the underlying problem through appropriate remedial works. This involves:
(a) prioritising spending on flood relief measures by the Office of Public Works (OPW) and relevant local authorities to address those areas of greatest need including areas where industry are finding it most difficult to provide cover - so that flood relief programmes can have maximum impact, where economically feasible,
(b) improving channels of communication between OPW and the insurance industry with the objective of ensuring that appropriate and relevant information on completed OPW flood defence schemes is provided to insurers to facilitate, to the greatest extent possible, the availability to the public of insurance against the risk of flooding, and
(c) providing humanitarian assistance under the Dept. of Social Protection Humanitarian Assistance Scheme which gives financial support to people who have suffered damage to their homes as a result of the flooding.
This coordinated whole-of-Government approach is led by OPW with relevant local authorities and other bodies to maximise the level of resources available to address flood relief works. Because of cost and scale of these types of flood defence works, it is an approach which will see benefits over the medium and long term.
216. Deputy Patrick Nulty asked the Minister for Finance when a person (details supplied) will receive a tax rebate for 2011. [8206/14]
View answerI am informed by the Revenue Commissioners that the person in question was resident in Ireland for tax purposes for the year 2011 and therefore she is subject to Income Tax on her worldwide income. As she was employed in Australia during the year 2011, it is necessary for her to forward a statement from the Australian Tax Authority giving details of her Australian income and any tax deducted, for the period ended 31 December 2011.
Fingal Revenue District requested the above statement on the 15 November 2013, but the information subsequently provided does not suffice. The Revenue Commissioners have now made direct contact with the person in question and have advised her of the exact information required. She has been supplied with contact details and following receipt of the necessary documentation her refund application will be dealt with without delay.
217. Deputy Clare Daly asked the Minister for Finance his views on a matter relating to pyrite and the property tax (details supplied). [8212/14]
View answerSection 10A of the Finance (Local Property Tax) Act 2012 (as amended) provides for a temporary exemption of at least three consecutive years (generally the exemption period will be for between three and five years and is linked to the three year valuation period) from the charge to Local Property Tax (LPT) for residential properties that have been certified under Regulations made by the Minister for the Environment, Community and Local Government (S.I. No. 147 of 2013) as having "significant pyritic damage". These Regulations describe the methodology that must be used when a property is being assessed for pyrite damage. The assessing and testing procedures that must be carried out are highly technical and specialised and have to be carried out by an appropriately competent person such as an engineer or a geologist.
The LPT exemption does not apply until such time as the property has been assessed and a certificate confirming "significant pyritic damage" has been issued. This is the only type of certificate that is relevant and a homeowner cannot claim the exemption until it has been issued. This means that, in the absence of the relevant certificate, LPT must be paid up front or by means of one of the approved phased payment arrangements.
Special arrangements apply in respect of the years 2013 and 2014 to facilitate homeowners who do not have the relevant certificate on the first liability date of 1 May 2013 (liability date for 2013), or by 1 November 2013 (liability date for 2014). While they are required to pay LPT for those periods, they may reclaim the tax paid if they obtained the certificate by 31 December 2013 and notified the Revenue Commissioners in writing by 31 January 2014. Such retrospective treatment only applies in relation to the years 2013 and 2014. The standard procedure is for homeowners to start the period of exemption from the liability date following the issue of the certificate. For example, a homeowner who has the relevant certificate on 1 November 2014 (liability date for 2015) can claim the exemption for the five year period of 2015 to 2019 but cannot reclaim LPT paid for any year prior to 2015.
The rules governing when, and for how long, the exemption applies are complicated and are best explained by the use of examples. I am advised that detailed information and examples on how the exemption for residential properties with significant pyrite damage operates are provided by the Department of Environment, Community and Local Government, on www.environ.ie, and by the Revenue Commissioners in the LPT section of their website, www.revenue.ie.
218. Deputy Sean Fleming asked the Minister for Finance the efforts that have been made by the Revenue Commissioners to clamp down on the sale of illegal cigarettes here; and if he will make a statement on the matter. [8215/14]
View answerI am advised by the Revenue Commissioners that combating the illegal tobacco trade is, and will continue to be, a high priority for them. Their work against this illegal activity includes a range of measures designed to identify and target those who are engaged in the supply or sale of illicit products, with a view to seizing the illicit products and prosecuting those responsible. This multi-faceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources at points of importation and within the country.
Interception of illicit tobacco products is achieved through a combination of risk analysis, profiling, intelligence and the screening of cargo, vehicles, baggage and postal packages. Revenue officers also target the illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises.
There is extensive cooperation with An Garda Síochána in combating the illicit trade, and the relevant agencies in the State also work closely with their counterparts in Northern Ireland, through a cross-border group on tobacco enforcement, to target the organised crime groups that are responsible for a large proportion of the illegal tobacco market. In addition, cooperation takes place with other Revenue administrations and with the European Anti-Fraud Office, OLAF, in the ongoing programmes to tackle the illicit trade at international level.
In 2013, a total of 40.8m cigarettes with a retail value of €18.9m and 4.458 kgs of tobacco with a retail value of €1.8m were seized by Revenue.
I am assured by the Revenue Commissioners that they remain committed to acting against all stages of the supply chain for illicit tobacco products and will continue to make very effort to ensure that those involved in the illicit trade are brought to account before the Courts for their criminal activities.
219. Deputy John Browne asked the Minister for Finance if he will confirm previous statements that the recipient of private residential rental income is a business person in respect of that rental income; if it is not recognised as a business, the legislation or ministerial orders that are needed to ensure that the taxation system recognises the normal costs of that rental business as being deductible from the applicable gross rent; and if he will make a statement on the matter. [8222/14]
View answerAn individual involved in the letting of property may be considered, in the broadest sense, to be engaged in a business or enterprise and, as such, be considered a business person. However, it appears to me that the thrust of the Deputy's question is more to do with whether an individual in receipt of rental income can be considered to be engaged in a trading activity.
In that regard, I am advised by the Revenue Commissioners that under existing legislation income tax is charged under Schedule D of the Taxes Consolidation Act (TCA) 1997 in respect of a number of sources of income, which are classified into five separate Cases. Under this provision, rent received by landlords (individuals and companies) from property in the State is chargeable to tax under Case V, while income from trading activity in the State is chargeable under Case I. Therefore, for tax purposes, rental income is viewed as distinct from income arising from trading activity.
In the case of trading activity, the law provides that taxable income is closely aligned to the accounting profit (subject to certain explicit prohibitions). In the case of rental activity, however, taxable income is the gross rent as reduced by a limited number of specified deductions as set out in section 97(2) TCA 1997.
These are:
- any rent payable by the landlord in the case of a sub-lease;
- the cost to the landlord of any goods provided or services rendered to a tenant;
- the cost of maintenance, repairs, insurance and management of the property;
- the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and
- payment of local authority rates.
In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years. I have no plans to change the current taxation distinction between rental income and income arising from trading activity. Neither have I plans to extend the range of allowable deductions from gross rental income in arriving at taxable income for Case V purposes, save for my intention, as stated in earlier Parliamentary Questions to allow for a deduction for Local Property Tax. Such a change will require an amendment to the primary law but the manner and timing of this has not yet been considered.
220. Deputy John Halligan asked the Minister for Finance if his attention has been drawn to a case in which a bank (details supplied) in County Waterford is refusing to acknowledge receipt of or to apply a TRS payment to a mortgage holder's account even though the Revenue Commissioners' TRS section has confirmed to the mortgage holder that the payment was made to the bank on the person's behalf; if his attention has been drawn to any similar instances; the action he and his Department will take in this case; and if he will make a statement on the matter. [8227/14]
View answerFirstly, I must confirm to the Deputy that it is not appropriate for me to comment on or become involved in an individual borrower's dispute with a financial service provider.
On the issue more generally, if a customer has made a formal complaint to the financial service provider in question and is not satisfied with the outcome, then the matter should be referred to the Financial Services Ombudsman.
The Financial Services Ombudsman investigates, in an impartial and independent manner, complaints from individual customers and small businesses who have unresolved disputes with financial service providers which are either regulated by the Central Bank or, are subject to the terms of the Consumer Credit Act 1995. All personal customers, unincorporated bodies, charities, clubs, partnerships, trusts, and limited companies with a turnover of €3,000,000 or less can complain to the Ombudsman.
Investigations by the Financial Services Ombudsman are free of charge to the customer.
221. Deputy Sean Fleming asked the Minister for Finance his views on whether the payment of the local property tax, at its current level, may be forwarded to local authorities to include in it a provision whereby local authorities could incorporate water rates and bin charges in the grant to be received by them under the local property tax; and if he will make a statement on the matter. [8232/14]
View answerUnder the Finance (Local Property Tax) Act 2012, as amended, commencing in 2014 an amount equivalent to the Local Property Tax (LPT), including any interest paid thereon, shall be paid from the Central Fund into the Local Government Fund. My colleague, the Minister for the Environment, Community and Local Government, has responsibility for the allocation of funding to local authorities.
Local Authority spending and services are a matter for the Department of the Environment, Community and Local Government and the local authorities.
