Dáil Éireann Debate, Tuesday - 18 November 2014
157. Deputy Pat Rabbitte asked the Minister for Finance the amount of tax generated by the Exchequer from stallion fees income for each of 2007 to 2011, inclusive, and 2012 respectively; and if he will make a statement on the matter. [43757/14]
View answer158. Deputy Pat Rabbitte asked the Minister for Finance the total income tax generated for the Exchequer from stallion income since the exemption of taxation on stallion income was abolished in August 2008 in view of the fact that 70% of the world's stallions have been located here in recent years and Ireland accounts for 42% of total thoroughbred foals output in the European Union; and if he will make a statement on the matter. [43758/14]
View answer159. Deputy Pat Rabbitte asked the Minister for Finance the taxation contribution to the Exchequer from stallion income from the highly successful thoroughbred stud operations here which have generated hundreds of millions of euros in income for many leading owners over the past five years; and if he will make a statement on the matter. [43759/14]
View answer160. Deputy Pat Rabbitte asked the Minister for Finance the tax income for the Exchequer for net stallion income associated with the top ten stud operations here; and if he will make a statement on the matter. [43760/14]
View answerI propose to take Questions Nos. 157 to 160, inclusive, together.
Profits or gains arising to an owner or part owner of a stallion from the sale of services of mares within the State by a stallion or from the sale of rights to such services have been taxable since 1 August 2008. Previously, these profits were exempt from Income and Corporation Tax.
I am advised by the Revenue Commissioners that figures for the profits earned from the provision of stallion stud services were required to be returned in Income Tax and Corporation Tax returns from the tax year 2008 onwards. The figures from returns are as set out in a table for the tax years 2008 to 2012, the most recent available.
Profits earned from the provision of stallion stud services
|
Tax Year |
Income Tax Returns €m |
Corporation Tax Returns €m |
|
2008* |
1.1 |
0.6 |
|
2009 |
0.5 |
4.0 |
|
2010 |
0.7 |
2.3 |
|
2011 |
0.7 |
2.2 |
|
2012 |
0.7 |
6.4 |
*These figures do not include fees and profits that were exempt prior to 1 August 2008.
In interpreting these figures it is important to bear in mind that they are profits as opposed to the total fees earned by an owner. Income Tax and Corporation Tax are charged on profits or gains rather than gross fee income. In calculating the profits or gains, stallions are treated as stock in trade which means that income from stud fees and profits or gains on the sale of the stallions are fully taxable in the hands of both corporate and individual owners.
In computing profits, a write-off over 4 years of the "initial value" of the stallion is allowed as a deduction for tax purposes. This reflects the fact that some stallions have a short nomination life and also takes into account that the majority of stallions are unsuccessful at stud. The impact of the deduction on taxable profits during the write-off period is directly related to the success, or otherwise, of the stallion. Without this provision the cost of a stallion would, under normal rules, only be allowed as a deduction upon its disposal or death.
As stallion related profits or gains are aggregated with all other incomes for the purposes of Income and Corporation Tax calculations, it is therefore not possible to specify the separate Income or Corporation Tax yield from these activities. All taxpayers, both individual and corporate, can have a number of sources of income, and can avail of a variety of different deductions and reliefs, which affect the final tax liability. In addition, the profit figures shown above may be reduced by capital allowances or losses to which that taxpayer may be entitled. Therefore, it is not possible to infer from these figures the amount of tax that is generated solely from the taxation of these profits or gains.
The Deputy has also asked for the amount of income associated with the top ten stallion operations. I am advised by the Revenue Commissioners that, to ensure the confidentiality of Revenue's taxpayer information, it would not be appropriate for the Commissioners to reveal the profits of the top ten cases.
