Written Answers Nos. 270-280
270. Deputy Pearse Doherty asked the Minister for Finance if the Revenue Commissioners has a policy of withholding tax refunds until a person has paid their property tax for the coming year; and if he will make a statement on the matter. [4773/15]
View answerI am advised by Revenue that Section 960H of the Taxes Consolidation Act 1997 (as amended) provides that where a taxpayer is due a refund of tax, the Commissioners can offset that amount in full, or in part, to satisfy outstanding liabilities in any other tax head. Any balance (of the refund) that remains after the offset is completed is repaid to the taxpayer.
With specific regard to Local Property Tax (LPT), the Deputy will be aware that Revenue has provided a wide variety of payment methods, including a number of phased payment options such as direct debit (DD), deduction at source (DaS) from salary or pension and payments via various approved service providers. Revenue has also provided the Single Debit Authority (SDA) option, which operates like an electronic cheque and which is not deducted from current accounts until 21 March, unless an earlier date is specified by the liable person.
Where the liable person opts for one of these payment options and confirms his/her preference to Revenue in advance of the LPT due date, or where a phased payment arrangement is already in place, then no amount is withheld from any pending tax refund for offset. However, where the liable person fails to confirm a preferred option and does not pay the full amount of LPT by the due date, then Revenue will deduct the outstanding amount from the pending refund.
271. Deputy Bernard J. Durkan asked the Minister for Finance the current structure relating to DIRT on investments and long-term investments; if concessions in respect of DIRT exist for persons who are unemployed or on low incomes; and if he will make a statement on the matter. [4796/15]
View answerI am advised by the Revenue Commissioners that the legislation governing the operation of appropriate tax on interest earned on deposits held in the State, referred to as Deposit Interest Retention Tax (DIRT), is set out in Chapters 4 and 5 of Part 8 of the Taxes Consolidation Act 1997 (the Act).
Except in the circumstances listed below, as and from the 1 January 2014 DIRT is deducted at a rate of 41% on interest earned on all relevant deposits, irrespective of the term of the investment.
Relevant deposits are deposits held by deposit takers in the State, other than certain State Bodies, on behalf of individuals who are resident in the State.
There is no exemption for interest paid on deposit accounts held by unemployed individuals or individuals on low incomes.
Interest is exempted from DIRT in the following circumstances:
Individuals aged 65 or older
An account held by an individual where the individual or his or her spouse or civil partner is aged 65 or older, and his or her total income in a year (including interest earned) is below the annual exemption limit, is exempt from DIRT.
The annual exemption limits for 2015 are €18,000 in the case of a single person and €36,000 in the case of a married couple or civil partnership.
Permanently Incapacitated Individuals
An account held by an individual where that individual or his or her spouse or civil partner is permanently incapacitated by reason of physical or mental infirmity from maintaining himself or herself and is not liable to pay income tax because of the level of his or her income, is exempt from DIRT.
Medium and Long Term Deposits
Prior to the enactment of the Finance (No.2) Act of 2013 a portion of interest earnings on all medium and long term deposits was exempted from DIRT in accordance with s.261A of the Act. For this purpose medium term deposits are defined as deposits which are held by a deposit taker for a minimum of three years and long term deposits are those held for a minimum of five years. These provisions continue to apply to medium and long term deposit accounts opened prior to 16 October 2013 for a duration of three and five years respectively from that date. In these cases the first €480 of interest earned in any year on medium term accounts, and the first €635 of interest earned in any year on long term accounts, is exempt from DIRT.
272. Deputy Dominic Hannigan asked the Minister for Finance his views on Ireland investing in the European Fund for Strategic Investments; his further views regarding Ireland potentially being left out of the steering board of EFSI if the fund is not invested in; and if he will make a statement on the matter. [4797/15]
View answerAs the Deputy is aware the legislative proposal for the European Fund for Strategic Infrastructure (EFSI) was only published on 13 January last. The Working Group discussions under the Latvian Presidency commenced as recently as 19 January and matters such as the Governance arrangements for the EFSI are an important part of those discussions. At this stage given the ongoing discussion amongst Member States on how the Governance of the fund should operate it is still an open question whether any Member States will participate at the level of the EFSI Steering Board. Regardless of this Ireland, like other Member States, is also giving close consideration to participation at the level of the Investment Platforms envisaged as part of the EFSI and through investment in individual projects which are of clear benefit to Ireland.
273. Deputy Michael McGrath asked the Minister for Finance his views on the performance of the European Central Bank in regard to its role in respect of the prudential supervision of credit institutions as laid out in article 127(2) of the Treaty on the Functioning of the European Union in recent years; and if he will make a statement on the matter. [4826/15]
View answerThe tasks of the European System of Central Banks (ESCB) and the Eurosystem are laid down in the Treaty on the Functioning of the European Union (TFEU). They are specified in the Statute of the European System of Central Banks and of the European Central Bank. The Statute is a protocol attached to the TFEU.The Deputy refers to Article 127(2) of the TFEU which defines the basic tasks to be carried out through the Eurosystem to be:
- to define and implement the monetary policy of the Union
- to conduct foreign-exchange operations consistent with the provisions of Article 219 of the TFEU
- to hold and manage the official foreign reserves of the Member States
- to promote the smooth operation of payment systems.
The ECB is independent in carrying out its mandate and tasks. However, accountability is an important counterpart of its independence. As a European institution, the ECB is accountable in the first instance to the European Parliament.
The President of the ECB regularly reports on the ECB's monetary policy and its other tasks at his hearings before the European Parliament Committee on Economic and Monetary Affairs. Other members of the ECB's Executive Board also appear before the European Parliament to address specific issues. Beyond that, the ECB replies to written questions by MEPs, which are published together with the ECB's answers in the Official Journal of the EU and on the ECB's website.
As part of the ECB's reporting obligations, the President also appears before the plenary session of the Parliament to present the ECB's Annual Report, on which Parliament, as a rule, adopts a resolution.
The Central Bank of Ireland is a member of the Eurosystem, which consists of the European Central Bank (ECB) and the National Central Banks (NCBs) of the nineteen Member States that have adopted the euro. This group of institutions is responsible for conducting and implementing the single monetary policy for the currency union with the primary objective of maintaining price stability. Further details of the Central Bank's involvement in monetary policy formulation at Eurosystem level are set out in its Annual Report. In addition to its monetary policy role, on the basis of Article 127(6) of the TFEU and of the Council Regulation (EC) No 1024/2013 (the "SSM Regulation"), the ECB is responsible for specific tasks concerning the prudential supervision of credit institutions established in participating Member States. It carries out these tasks within a Single Supervisory Mechanism (SSM) composed of the ECB and the national competent authorities. The SSM is responsible for the prudential supervision of all credit institutions in participating Member States. It confers key supervisory tasks on the ECB and establishes the framework in which the ECB and the national competent authorities, including the Central Bank of Ireland, are to co-operate on the prudential supervision of credit institutions.
The SSM took effect from 4 November 2014, and it is early days yet to be making judgement on its performance. In line with the SSM Regulation the ECB is required to report to Council and to Parliament on an annual basis in relation to the execution of the tasks conferred on it. In addition there is democratic accountability at both the European and national levels. National parliaments of the participating Member States, through their own procedures, may request the ECB to reply in writing to any observations or questions submitted by them to the ECB in respect of the tasks of the ECB under the SSM Regulation. The national parliament of a participating Member State may also invite the Chair or a member of the Supervisory Board to participate in an exchange of views in relation to the supervision of credit institutions in that Member State together with a representative of the national competent authority.
274. Deputy Paul Murphy asked the Minister for Finance if he will provide a list of investment funds and real estate investment trusts to which the National Asset Management Agency has sold commercial and residential properties; the value of sales to each; the value of the loan with which the property was bought by the original developer; and if he will provide a list of each of the properties concerned. [4839/15]
View answer275. Deputy Paul Murphy asked the Minister for Finance if he will provide a breakdown of Irish properties sold by the National Asset Management Agency detailing their original owners; the buyers of same; the profits or loss on each transaction relative to the original face value of the loan; and the price for which NAMA purchased the property from the banks. [4840/15]
View answerI propose to take Questions Nos. 274 and 275 together.
From inception to the end of 2014, NAMA and its debtors and receivers were involved in more than 4,000 transactions involving sales of Irish assets. These transactions yielded total sales proceeds of €5.5 billion.
Under Section 202 of the NAMA Act 2009, NAMA is prohibited from disclosing confidential information. Confidential information is defined to include information relating to debtors, including the property assets securing their loans. The Act also provides that, on acquisition of a loan, NAMA takes over the obligations of the participating institution, one of which is the contractual duty of confidentiality to debtors. NAMA cannot, therefore, disclose details about debtors as to do so would leave it open to litigation. Information about individual debtors or guarantors is also protected against disclosure by the Data Protection Acts with which NAMA must comply as a data controller.
Confidential information is also defined to include information which, if disclosed, would tend to place NAMA at a commercial disadvantage. The disclosure by NAMA of the identity of the purchasers of its loans and property assets and the commercial terms of individual sales transactions would place it at a significant commercial disadvantage relative to its competitors. Other financial institutions engaged in deleveraging their loan portfolios in Ireland are not required to disclose such information. It is important that NAMA, which is seeking to maximise the return to Irish taxpayers from its loan portfolio, should not be placed at a commercial disadvantage by disclosing information which would benefit its competitors and potential future counter-parties. It is also likely that some potential purchasers would decline to bid on NAMA assets and loan sale transactions if they were aware that transaction details were to be published subsequently.
I am satisfied therefore that disclosure by NAMA of the details of purchasers and of the commercial terms of sales transactions, other than what purchasers themselves choose to put into the public domain, would ultimately have the effect of reducing NAMA's financial return. This would be completely contrary to its statutory obligation, under Section 10 of the NAMA Act, to obtain the best achievable financial return for the State.
The Deputy may be aware, and it is a matter of public record, that the IRES REIT has purchased two residential portfolios (the Orange and Rockbrook portfolios) that were offered for sale by NAMA and that the proceeds from these sales have been used to reduce debtor indebtedness. It is also a matter of public record that Green REIT has been a purchaser of assets sold by NAMA debtors and receivers, including part of the Central Park portfolio in Dublin. I am also advised that the Hibernia REIT purchased the Observatory Building which is located in the South Docks area of Dublin and which was offered for sale as part of NAMA's Redwood portfolio.
NAMA acquired and manages loans, not property, and its financial statements are prepared on this basis in accordance with International Financial Reporting Standards. In its financial statements, NAMA discloses aggregate information about its sales activity and the overall profit or loss generated by it. NAMA's Section 55 Report and Accounts for the third quarter of 2014 was published recently and is available on www.nama.ie. It includes information on the overall profit generated on property and loan sale transactions by NAMA since its inception. It shows that, from inception to 30 September 2014, the overall profit recorded in respect of property and loan sale transactions was €432m.
276. Deputy John Paul Phelan asked the Minister for Finance his plans to make changes in the next budget to treat cohabiting couples the same as married couples in terms of their income tax; the cost to the Exchequer of such a change; and if he will make a statement on the matter. [4847/15]
View answerWhere a couple is cohabiting, rather than married or in a civil partnership, each partner is treated for the purposes of income tax as a separate and unconnected individual. Because they are treated separately for tax purposes, credits and tax bands cannot be transferred from one partner to the other. Cohabitants do not have the same legal rights and obligations as a married couple or couples in civil partnerships.
The basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980), which held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income.
From a practical perspective, it would be very difficult to administer a regime for cohabitants which would be the same as that for married couples or civil partners. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting. It would also be difficult to establish when cohabitation started or ceased.
There would also be legal issues with regard to 'connected persons'. To counter tax avoidance, 'connected persons' are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce in respect of persons connected with a cohabiting couple where the couple has no legal recognition. There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band and the ability to transfer credits. However, their legal status has wider consequences from a tax perspective both for themselves and for persons connected with them.
With regard to the cost to the Exchequer, I am informed by the Revenue Commissioners that unmarried cohabiting couples are not separately identified in tax statistics. It is not possible, therefore, to provide the information requested by the Deputy.
However, it is estimated that the cost of extending married treatment under the income tax code to such couples could be of the order of €1 million per annum for every 1,000 cohabiting couples registered.
Any change in the tax treatment of cohabiting couples can only be addressed in the broader context of future social and legal policy development in relation to such couples.
277. Deputy David Stanton asked the Minister for Finance the actions being taken to detect the illegal use of green diesel; the number of detections in 2013 and 2014 of such illegal activity; the actions taken as a result of any such detection; and if he will make a statement on the matter. [4869/15]
View answerDiesel that is used in agricultural tractors and for certain other specified purposes is subject to a lower rate of excise duty and must contain prescribed markers, including a dye which gives it a green colouration, to distinguish it from diesel that may be used in motor vehicles. It is an offence, under section 102 (1) (b) (ii) of the Finance Act 1999, to use marked diesel in a motor vehicle and a person convicted of that offence is liable to a fine of €5,000.
I am advised by the Revenue Commissioners that they undertake action on an ongoing basis to detect the illegal use of marked diesel in motor vehicles, including, in particular, the stopping of vehicles and checking of their fuel. As a result of this action, 1,318 detections of the illegal use of marked fuel were made in 2013 and 1,111 in 2014.
The numbers of convictions that were obtained in 2013 and 2014 arising from detections of the illegal use of marked fuel were 228 and 286, resulting in the imposition in those years of total fines of €620,100 and €772,250 respectively. In addition, 177 vehicles were seized in 2013 and 155 in 2014.
I am advised also that, in certain defined categories of cases where marked fuel is detected in a vehicle, Revenue is prepared to refrain from the institution of legal proceedings where the person concerned agrees to pay a compromise sum in lieu of prosecution. These would include cases where a person is detected for the first time in charge of a motor vehicle, other than a commercial vehicle, where marked fuel is illegally present. The numbers of cases dealt with in this way in 2013 and 2014 were 627 and 614, resulting in payments to Revenue by the persons in question of €822,145 and €819,630 respectively.
Action against the illegal use of marked fuel is an integral part of Revenue's wide-ranging programme of action against all forms of fuel fraud. An extensive range of new measures have been introduced over recent years to tackle such fraud, including enhanced supply chain controls and the acquisition of a more effective fuel marker. Key measures include the following:
- The licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of fuel criminals to get laundered fuel on to the market.
- A new licensing regime was introduced for marked fuel traders from October 2012, which was designed to limit the ability of criminals to source marked fuel for laundering.
- New requirements in relation to fuel traders' of stock movements and fuel deliveries were introduced to ensure that data are available to assist in supply chain analysis.
- New supply chain controls were introduced from January 2013 following significant investment in new IT systems. These returns require all licensed fuel traders to make monthly electronic returns to Revenue of their fuel transactions, to allow the detection of suspicious or anomalous transactions and patterns of distribution.
- An intensified targeting, in cooperation with other law enforcement agencies on both sides of the border, of enforcement action against suspected fuel laundering operations.In addition, Revenue has, in partnership with Her Majesty's Revenue and Customs in the UK, identified a more effective fuel marker. The new marker will come into operation in both jurisdictions from midnight on the 31 March 2015.To support further the integrity of the fuel distribution system and to minimise the risk of fraud, I introduced a provision in the Finance (No. 2 ) Act 2013 which will make a supplier who is reckless in supplying rebated fuel for a use connected with excise fraud liable for the duty at the standard rate of tax. This strengthens Revenue's hand in dealing with such traders.
I am assured by the Revenue Commissioners that they will continue to act robustly against all forms of fuel fraud, including the illegal use of marked fuel in motor vehicles.
278. Deputy Tom Fleming asked the Minister for Finance in view of survey results by ISME that 57% of companies which had applied for loans were refused, if he will significantly increase the target for lending in 2015 and consider options to make more money available to small businesses; and if he will make a statement on the matter. [4876/15]
View answerI assume the Deputy is referring to the ISME Q3 2013 survey where it was reported that 57% of companies who applied for funding were refused credit by their banks. The Deputy may be interested to note that the ISME Q4 2014 survey reports a refusal rate of 38%.
The SME Credit demand survey April-September 2014 conducted by Red C on behalf of my Department is the most comprehensive survey of SME credit demand in Ireland, covering 1,500 respondents and involving over 5,000 direct calls to SMEs. This survey reports the refusal rate for this period at 14%.
As the Deputy may be aware, the Credit Review Office helps SME or Farm borrowers who have had an application for credit of up to €3 million declined or reduced by either Bank of Ireland or Allied Irish Banks, and who feel that they have a viable business proposition. They also examine cases where borrowers feel that the terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Reviewer John Trethowan and his team have overturned 55% of the refusals that have been appealed to the Office to date. Further details are available at www.creditreview.ie.
The Government recognises that small businesses play a central role in the sustainable recovery of the Irish economy. To facilitate this, Government policy since 2011 has been focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.
Since the beginning of 2014 the focus has shifted towards the collation and examination, on a monthly basis, of more granular data on the funding of the activities of SMEs from both AIB and Bank of Ireland, the wider banking sector and increasingly the non-bank funding sector. Having completed a process of deleveraging, both AIB and Bank of Ireland are now concentrating on growing their balance sheets. In this context, both banks recognise the need to increase business lending in the period up to 2016, particularly lending to the domestic market, and have put on record their commitment to the SME sector. Both banks have recently reported increased year on year sanctioning activity for lending to the SME sector.
My Department has been involved in a range of initiatives to encourage access to credit for small and medium sized businesses, and the SME State Bodies Group provides a forum for the development and implementation of policy measures to enhance SMEs' access to a stable and appropriate supply of finance.
Some of the main policies introduced by this Government to encourage access to credit for small and medium businesses include:
- The Supporting SMEs Online Tool, a cross-government initiative, was launched in May 2014. On answering 8 simple questions, the small business will receive a list of available Government supports. The Supporting SMEs Online Tool is available at www.localenterprise.ie/smeonlinetool.
- The Strategic Banking Corporation of Ireland has been established as a means of ensuring that SMEs are provided with sufficient finance for growth and also ensuring that credit provided to SMEs meets their needs rather than the needs of those who offer the credit. The SBCI, from available funding of some €800 million initially, will provide a more extensive range of financing than is currently offered in Ireland such as loans of longer duration that encourage and enable growth of our SMEs. The SBCI will have a lower cost of funding and this benefit must be passed onto SMEs. The SBCI is working with its first lending partners to provide initial funding to the SME sector by the end of 2014. The initial products will be launched in Q1 2015 with traditional bank lenders and importantly, new credit providers from beyond the traditional bank sector being involved which means SMEs will benefit from greater choice as well as more funding. More information on the SBCI can be found on www.sbci.gov.ie.
- The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs. My colleague, the Minister for Jobs, Enterprise and Innovation, will shortly bring legislation to the Oireachtas which enable the development of a more flexible Credit Guarantee Scheme.
- The Microenterprise Loan Fund, administered by Microfinance Ireland, provides loans of up to €25,000 to small businesses who have been refused credit by commercial banks. Microfinance Ireland works in partnership with the Local Enterprise Offices nationally to administer this fund. This scheme is currently being reviewed by the Department of Jobs, Enterprise and Innovation with a view to making proposed changes to enhance its effectiveness.
The Government remains committed to the SME sector and sees it as the key engine of ongoing economic growth. Consequently the Department of Finance, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit with a view to taking appropriate actions as warranted to ensure that SMEs in Ireland have the opportunity to reach their full potential in terms of growth and employment generation. In this context, the Action Plan for Jobs 2015 includes a dedicated chapter and associated integrated set of actions to support the financing for growth in the SME sector.
279. Deputy Terence Flanagan asked the Minister for Finance if he will address a matter (details supplied) regarding the local property tax; and if he will make a statement on the matter. [4878/15]
View answerThe Government decided a universal liability to the LPT should apply to all owners of residential property with limited exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption.
The Local Property Tax (LPT) legislation does not contains a relief from Local Property Tax for Stamp Duty payments. The inter-Departmental group, chaired by Dr Don Thornhill, which was established to consider the structures and modalities of a property tax (the "Thornhill Group") gave detailed consideration to this issue. The Thornhill Group recommended against giving a relief for Stamp Duty, not least because such a relief would not be targeted at cases of need.
While some individuals had a significant Stamp Duty liability, they may have been able to claim mortgage interest relief on interest up to €20,000 per annum; and individuals who bought properties since 2004 can continue to claim mortgage interest relief until 2017.
There are no plans to provide relief from LPT for those who paid stamp duty.
280. Deputy Thomas P. Broughan asked the Minister for Finance his views on the call for a eurozone debt conference in response to the recent Greek election result; and his further views on chairing such a conference in Dublin. [4900/15]
View answerMy view is that when countries encounter difficulties, a process of negotiation is always better than one of conflict.
Specifically in the case of euro area Member States, all programme negotiations have been conducted within the Eurogroup and Ecofin, with IMF involvement as appropriate. My view is that these are the appropriate fora for resolving outstanding issues such as this.
