Written Answers Nos. 103-109
103. Deputy Pearse Doherty asked the Minister for Finance the purpose of the proposed insurance Bill; and if it will prevent another situation such as that relating to the collapse of Setanta Insurance from affecting customers here. [2876/15]
View answerThe Solvency II Directive represents a substantial overhaul of European insurance regulation. It sets out new, stronger EU-wide requirements on capital adequacy and risk management for insurers with the key aim of increasing policyholder protection. It is expected that this new regime should reduce the possibility of consumer loss or market disruption in insurance. As Solvency II is a maximum harmonisation Directive it should result in a more harmonised approach across all EU Member States in terms of the regulation by supervisory authorities of insurance undertakings. Solvency II will enter into force on 1 January 2016 and work on its transposition is currently underway in my Department, following the holding of a public consultation process late last year.
The Insurance Bill, however, is intended to provide a statutory regime for those insurance companies not covered by the Solvency II Directive. Solvency II does not apply to firms that are winding down (and therefore not taking on any new business) or firms with an annual gross written premium income that does not exceed €5 million.
Based on these criteria, if Setanta were still in operation it would be subject to the Solvency II regime and not the alternative regime to be covered by the forthcoming Insurance Bill.
104. Deputy Brian Walsh asked the Minister for Finance his plans to enter into a double taxation agreement with Taiwan; and if he will make a statement on the matter. [2885/15]
View answerAs has been outlined to this House before by my colleagues in Government, Ireland, along with all EU partners, adheres to the "One China" policy and as a result does not have diplomatic relations with Taiwan. This does not, however, preclude the development of economic and trade relations. Ireland, together with our EU partners, sees the benefit of encouraging trade with Taiwan and will continue to explore all appropriate opportunities which arise.
Since Taiwan is not recognised as a State by Ireland we cannot enter into a legally enforceable agreement which would be governed by international law. However a number of other EU countries have negotiated commercial agreements with Taiwan along the lines of Double Taxation Agreements. Therefore it should be possible to negotiate an agreement with Taiwan that is consistent with this policy. I can advise the Deputy that Double Taxation Agreements are negotiated by the Revenue Commissioners on behalf of the Government.
It is my Department's policy to treat double taxation agreements as confidential until they are signed, at which point they are published on Revenue's website. I am informed that this is a normal practice for most jurisdictions which respects the confidential nature of the negotiation process. Officials from my Department and the Revenue Commissioners, along with their colleagues in the Department of Foreign Affairs and Trade, are currently working on this issue and we are confident of progress on this matter in 2015.
105. Deputy Patrick O'Donovan asked the Minister for Finance the numbers of persons who availed of the artists' exemption scheme in 2014; the amount of income to which the scheme related; the top ten earners who availed of the scheme; and if he will make a statement on the matter. [2904/15]
View answerThe latest information available regarding the Artists' Exemption scheme is for the year 2012, the last year for which returns have been filed and fully processed. In that year approximately 2,490 persons availed of the exemption in respect of income of €27.8 million at an estimated cost to the Exchequer of €4.8 million. It should be noted that the maximum amount of income per artist that may be exempted in any one tax year is €40,000.
In relation to the Deputy's request regarding the top ten earners that availed of the scheme, the Revenue Commissioners are unable to provide this information due to their obligation to preserve the confidentiality of taxpayers.
106. Deputy Derek Nolan asked the Minister for Finance if, in terms of the proposed analysis of options regarding the State's shareholding in AIB, the terms of reference relating to Goldman Sachs include analysing the option of keeping the bank in State ownership in the long term as a method of retiring not just debt accumulated by the State in respect of AIB but also that incurred by the entire banking sector; and if he will make a statement on the matter. [2947/15]
View answerAs the Deputy will be aware the Irish banking system is now in a much stronger position than it has been in recent years. Profits are recovering, balance sheets have been restructured and we have started the process of returning cash to the taxpayer following the huge investments that were made over the 2009-11 period.
Much of the banking-related work in the Department of Finance this year will focus on AIB. Given the scale of the State's investment of some €20.8 billion and the range of options available to recoup value from the bank, officials within my Department are working with AIB on reconfiguring its capital structure. Goldman Sachs International has been appointed to provide financial advice to the Department in this regard.
The focus will be on ensuring that the best decisions are made regarding potential capital restructuring options and sequencing in order to maximise the return of cash to the State from our AIB investments over time. While this is just the start of the process, it is an essential first step on the road to recovering value for the taxpayer. All options remain on the table and it is too early to specify what steps will be taken next or to put a timeline on decisions.
As I have previously stated on numerous occasions, Government policy is that we will not remain a holder of our banking investments in the long term. Given our high debt to GDP ratio, we do not have the luxury of holding all of these investments indefinitely and I envisage receipts from the gradual sale of these investments helping to play their part in reducing the State's overall debt burden in the coming years.
107. Deputy Róisín Shortall asked the Minister for Finance in view of the advisory role which a company (details supplied) is due to play regarding the future of AIB, the circumstances in which it came to take on this role; if it is to perform this work on a pro bono basis; the criteria he applies to the selection of consultants for major work of this nature in order that the public may be assured that no conflict of interest exists; his views on the probity and advisability of proceeding with this arrangement; and if he will make a statement on the matter. [2967/15]
View answerAs the Deputy is aware, I have recently awarded a contract to Goldman Sachs International, a U.K. subsidiary of the Goldman Sachs group, to provide financial advice to the Department of Finance in relation to capital restructuring actions (and related matters) with respect to the State's investments in AIB. The purpose of awarding the contract is to engage a firm with the appropriate experience to provide advice to assist the Department in making the bank's balance sheet fit for purpose and in designing a roadmap that will see the bank start to return cash to the State. As I have indicated previously, no decision has been taken in relation to the State exiting any of its investments in the bank.
The award follows the establishment by the Department last year of three separate panels of financial advisers after an extensive process that followed EU procurement rules. These panels were put in place to principally facilitate the provision of timely advice in relation to our banking investments though the panels are available for the wider Department to use in other areas if deemed necessary.
The award of the current contract followed a competitive tendering process with each of the eleven firms on Panel 1 (which covers capital markets, strategic, M&A and restructuring advice) being invited to submit a tender. Prior to the year end, each of the firms accepted the invitation and the tendering process included face-to-face presentations by each of the firms to a panel of Department of Finance officials. Arising from these presentations, each of the firms was scored across a number of standard criteria with Goldman Sachs International being adjudged to have achieved the highest aggregated score. Accordingly, they were awarded the contract.
As part of the process for assessing the award of a contract by the Department, all firms who are invited to submit a tender are required to provide a declaration that no conflicts of interest exist. Should a firm be in a position to be unable to provide such a declaration, any tender submitted by the firm would be disqualified from further consideration. I can confirm that Goldman Sachs International provided the Department with the appropriate declaration.
As part of the terms of the contract, Goldman Sachs International has been engaged on a pro bono basis. This is a good outcome for the State and we understand is not unusual internationally, given firms' desire to be associated with such high visibility government work. In fact a number of the tenderers offered their services on a pro bono basis.
Finally, the Deputy will be aware that Goldman Sachs is one of the leading investment banks worldwide with vast experience in a number of areas, including corporate finance. The firm has ongoing engagements with a wide variety of clients including large corporates and sovereign states. The Federal Reserve Board is the primary regulator of the Goldman Sachs group. In addition to this, Goldman Sachs International is regulated by the PRA and FCA in the U.K. With its vast experience and high degree of regulation, I am not aware of any reason not to proceed with their engagement, be it probity or otherwise.
108. Deputy John Browne asked the Minister for Finance his views on whether DIRT paid on children's savings is unfair and a disincentive to save; his further views on an exemption for children under 18 years of age; and if he will make a statement on the matter. [2997/15]
View answerUnder Section 257 of the Taxes Consolidation Act 1997 all deposit takers are obliged to deduct Deposit Interest Retention Tax (DIRT) from payments of interest made to an account unless the account qualifies as an exempt account. There is no specific exemption in the case of interest paid on deposit accounts held by children. The wider tax code does not provide for an exemption from tax for children. Children could be liable to a range of taxes. Not many children have an income that exceeds the relevant thresholds, but those that do are taxable on it.
While all taxation measures are kept under review, there are no plans to provide that interest payable on children's accounts should not be subject to DIRT. To provide an exemption from DIRT to children's accounts could be difficult to administer, from the point of view of establishing the beneficial ownership of the account.
A number of State Savings Products offered by the National Treasury Management Agency through An Post are tax free, subject to certain conditions.
109. Deputy Catherine Murphy asked the Minister for Finance if there has been a change in the rules regarding the Revenue Commissioners' correspondence with the TAIN-registered agent or representative of a customer; the reasons the Revenue Commissioners may cite to refuse to correspond with such an agent or representative in respect of a person's tax affairs; and if he will make a statement on the matter. [3033/15]
View answerI am informed by the Revenue Commissioners that the procedures around corresponding with TAIN registered agents/representatives have not changed.
However, the Deputy will appreciate that the process of authorising an agent to act on behalf of a taxpayer, and to receive confidential, personal information on their behalf, has to be extremely robust, so as to ensure that there is no inadvertent release of confidential information.
The authorisation process works as follows. Either the taxpayer authorises the agent to act on their behalf or the agent advises Revenue that they are now the taxpayer's representative. Where the taxpayer authorises the agent, they submit a letter to their Revenue office providing details of the agent and the taxes the agent will deal with. Links are then established on Revenue's systems to grant the agent access and to copy the agent on all relevant correspondence.
Where an agent advises Revenue that they have started acting for a particular taxpayer they must request the link electronically via ROS, Revenue's Online Service, and the eRegistration system, Revenue's online registration facility and attach the authorisation provided by the taxpayer. Again the necessary links are established but in these instances the taxpayer is advised that the agent has requested access and the taxpayer then has an opportunity to ask that these links are removed, if the client/agent relationship is not valid. This additional step acts as a safeguard in instances where a request may have been made in error or without the taxpayer's permission.
The taxpayer can at all times request to have the agent links removed or new agent links created.
I am advised that there are very precise operating protocols in respect of access to customer information and they are strictly adhered to by Revenue staff. I am also advised that Revenue officials will not provide taxpayer details to any person who does not satisfy the relevant security protocols and, in agent/representative cases, details are only provided where the agent is actually linked to the taxpayer for the specific tax type. Where an agent is so linked, they have direct access, via Revenue's Online Service, to the records of any taxpayers that they represent. In those instances, Revenue will not provide copies of taxpayer records to the agent as the information is directly available to the agent to view for themselves in ROS.
The Revenue website is regularly updated with changes in operating procedures and all agent related changes are advised by means of Revenue eBriefs. These information bulletins are all available on the Revenue website in the Tax Practitioner section of the website.
