Tuesday, 22 Sep 2015

Written Answers Nos. 311-330

Mortgage Interest Rates

Questions (311, 356)

Michael Healy-Rae

Question:

311. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding Permanent TSB; and if he will make a statement on the matter. [30703/15]

Michael McCarthy

Question:

356. Deputy Michael McCarthy asked the Minister for Finance the assistance or advice that is available to Permanent TSB mortgage holders who were not offered or were prevented from switching to a tracker mortgage; and if he will make a statement on the matter. [31544/15]

Written answers

Minister for Finance

I propose to take Questions Nos. 311 and 356 together.

On 28 July 2015 following an enforcement investigation by the Central Bank of Ireland, permanent tsb announced details of a comprehensive Mortgage Redress Programme (MRP) to address the position of 1,372 mortgage customer accounts which lost a contractual right to a tracker rate mortgage in circumstances where there was a failure by the Group in the management of the relevant mortgage accounts.  1,152 of the impacted accounts were accounts of permanent tsb.  A further 220 were accounts of Springboard Mortgages Ltd a subsidiary of permanent tsb.

The majority of failures for impacted accounts occurred between 2006 and 2011.  Impacted customer accounts may have suffered serious consequences as a result of the failures including:

- Having to pay higher mortgage repayments than should have been the case;

- Going into arrears where that may not otherwise have occurred;

- Being engaged in legal proceedings that might not otherwise have been necessary;

- In a limited number of cases, customers may have lost ownership of the relevant property linked to the mortgage in situations where they may not have lost these properties if the failures had not occurred.

Both the Chairman and Chief Executive of permanent tsb Group Holdings plc have fully acknowledged that this is a matter of the utmost seriousness.

The Mortgage Redress Programme has a number of objectives:

1. To return the impacted mortgage accounts to the position they would now be in had the failure not occurred;

2. To make a compensation payment to impacted account holders;

3. To make a payment to impacted account holders for use, if required, in securing independent advice on this matter;

4. To provide a comprehensive appeals system for impacted account holders, which would enable them to appeal any aspect of the proposed redress and/or compensation offer made to them in so far as it related to their situation.

At close of business on 12 September, of the 1,352 mortgage accounts included in the Mortgage Redress Programme, payments have been made to customers in respect of 814 accounts 60% of the total.  That number is continuing to grow and the bank will be engaging with customers who have not yet replied to the initial correspondence over the coming weeks to encourage them to do so.

The issue of appeals is very important and with that in mind the bank has put in place a comprehensive appeals process comprising two separate appeal panels; one to deal with cases of loss of ownership or cases where legal action is or was previously undertaken by the bank and a second panel to deal with all other cases.

These panels include representatives from the legal and accountancy professions, and people with strong credentials in consumer advocacy.

The establishment of these panels recognises that it would be neither appropriate nor possible for the bank itself to have the final say on what should constitute, for example, an appropriate level of compensation for the impact which its failure has had on individual customers of the bank.  These panels will be able to examine representations made by impacted customers on any aspect of the redress programme including the amount of the compensation payment offered and whether or not that adequately compensates an impacted account holder in respect of any stress, disruption and hardship the failure may have caused.

The appeals process has also been set up in such a way to ensure that even if customers immediately accept the bank's proposals to redress their account and the bank's proposed compensation, doing so will not restrict their ability in the months ahead to bring an appeal in relation to either one or both of these issues or indeed other issues to the appeal panels.  I believe this has significant benefits for impacted customers and strikes the correct balance between ensuring that they can get redress and compensation immediately without having to accept such redress or compensation in full and final settlement of the matter.

The bank has also made it clear that regardless of whether an impacted account holder uses the appeal process or not, they may choose to bring the matter elsewhere for adjudication including to the Financial Services Ombudsman and / or to the Courts.  In such cases the bank has explicitly stated that it will not invoke any statutory limitation period (that might otherwise apply) for a period of 12 months from the date the account holder acknowledges receipt of the bank's correspondence on this issue.

Financial Services Regulation

Questions (312)

Mattie McGrath

Question:

312. Deputy Mattie McGrath asked the Minister for Finance further to Parliamentary Question No. 313 of 14 July 2015, his views that insolvency practitioners are not licensed or regulated and are thus free to behave as they see fit; his further views that current oversight practice of the Central Bank of Ireland around these issues is unacceptable; and if he will make a statement on the matter. [30705/15]

Written answers

Minister for Finance

The question of a regulation regime for receivers is a matter for my colleague, the Minister for Justice and Equality, and was addressed in her response to a Private Members Motion in the Seanad on 6 May of this year.

As the Minister pointed out at that time, receivers are normally accountants or solicitors and are subject both to the regulatory and disciplinary regime applicable to their professions and the law of the land. However, the Minister did give an undertaking to conduct an analysis of the issue to investigate whether further measures should be introduced to govern the conduct of receivers. The intention would be to produce a report for discussion at the Joint Committee on Justice, Defence and Equality to allow the Committee to consider what recommendations it would make as regards action to be taken.

Personal Insolvency Practitioners are licensed by the Insolvency Service of Ireland and in the case of regulated financial entities, insolvency practitioners are Court appointed and are therefore subject to oversight by the Court. 

Government Expenditure

Questions (313)

Mattie McGrath

Question:

313. Deputy Mattie McGrath asked the Minister for Finance if he will provide the total budget of the strategic investment fund; the amount drawn down; the spend from the fund for each county in tabular form; and if he will make a statement on the matter. [30707/15]

Written answers

Minister for Finance

The Ireland Strategic investment Fund (ISIF) have advised that they will invest €7.6 billion across industry sectors, regions and asset classes in Ireland.  As at 30 June 2015, the ISIF, mainly through investments made by its predecessor fund the NPRF, has committed €1.5 billion to investments aligned with its mandate which has a drawn market value of €848 million.

The NTMA is required to report each year on a number of matters including an assessment on a regional basis of the distribution of investments made by the Fund. The first ISIF economic impact report as at 31 December 2014, which included an analysis of the regional distribution of investments, is available on the NTMA website at:  http://www.ntma.ie/business-areas/ireland-strategic-investment-fund/.

The ISIF is not required to target regional investment opportunities. The amounts invested to 31 December 2014 are broadly consistent with ROI regional GVA data with 52% of investments outside of Dublin.

The ISIF is currently surveying underlying investees and it is estimated that the Economic Impact Report for the first half of 2015 will be published in November 2015.

Infrastructure and Capital Investment Programme

Questions (314)

Eoghan Murphy

Question:

314. Deputy Eoghan Murphy asked the Minister for Finance in view of Cisco's recent commitment to support the UK’s digitisation plans, if he will consider vendor financing options for the implementation of new infrastructural projects here as an alternative to new borrowing or the use of national investment funds for same in view of the fact that major international companies maintain capital reserves for investment in such projects. [30745/15]

Written answers

Minister for Finance

In the absence of full information on the specifics of the UK related investment by Cisco it is difficult to respond in detail on that particular case, which may or may not involve vendor financing. The National Development Finance Agency (NDFA) advise that the vendor financing model typically refers to a financial structure whereby an equipment manufacturer provides loans or other finance to assist with the purchase or lease of its equipment. It is sometimes used in projects involving greater technology or obsolescence risk such as those related to information and communications technology or high-tech hospital equipment. Use of such a model could be considered on a case by case basis, where appropriate, involving a comparison with the cost of borrowing by the Exchequer and consideration of other financing options both public and private. Officials from my Department already chair a group tasked with considering the funding options, both public and private, available for public projects. Finally any such proposal in relation to a suitable state project must comply fully with public procurement rules.

Insurance Industry

Questions (315)

Pearse Doherty

Question:

315. Deputy Pearse Doherty asked the Minister for Finance the grounds on which some motor insurance companies may refuse to offer insurance to cars over 15 years of age; and if he will make a statement on the matter. [30775/15]

Written answers

Minister for Finance

In my role as Minister for Finance, I have responsibility for the development of the legal framework governing financial regulation. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet these risks.

As a matter of course, insurance companies carry out reviews of the risks against which they are prepared to insure and they consider these risks when determining their policies, including whether to insure cars over fifteen years old.

The EU framework for insurance expressly prohibits Member States adopting rules which require insurance companies to obtain prior approval or provide systematic notification of certain matters, including general and special policy conditions and scales of premiums.

Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance.  In the event that a person is unable to obtain a quotation for motor insurance or feels that the premium proposed or the terms are so excessive that it amounts to a refusal to give them motor insurance, they should contact Insurance Ireland, 5 Harbourmaster Place, IFSC, Dublin 1, Telephone [phone], quoting the Declined Cases Agreement. Under the Agreement, the Declined Cases Committee of Insurance Ireland deal with any cases of difficulty in obtaining motor insurance.

Cycle to Work Scheme Administration

Questions (316)

Brendan Griffin

Question:

316. Deputy Brendan Griffin asked the Minister for Finance if the cycle to work scheme will be expanded to allow self-employed persons to participate; and if he will make a statement on the matter. [30970/15]

Written answers

Minister for Finance

The Cycle to Work Scheme exempts (from income tax, employee PRSI and levies) the benefit in kind arising from the provision of a bicycle/cycle safety equipment by an employer to an employee (or director), where the bicycle is used by the employee to cycle to and from work or between workplaces.

I have no plans to amend the Scheme as suggested since the concept of benefit in kind does not arise in the case of the self-employed. For self-employed persons all expenses "wholly and exclusively" incurred for the purpose of their trade or profession are allowable for tax purposes. There is no tax deduction for self-employed persons in respect of costs incurred by them in relation to travelling to and from their place of business.

Tax Code

Questions (317)

Regina Doherty

Question:

317. Deputy Regina Doherty asked the Minister for Finance if he will provide clarification on the tax treatment with regard to a qualified adult allowance and a State pension, specifically pre budget 2014; and if there is an obligation to declare a spouse's pension as part of that person's income. [31003/15]

Written answers

Minister for Finance

The State pension, including any increase for a qualifying adult dependent, is chargeable to income tax. Where an individual is entitled to the State pension and such pension is increased by virtue of that individual having a qualifying adult dependant, it remains one pension for tax purposes. Therefore the whole of such income, i.e. State pension plus adult dependant element, has always been treated for tax purposes as being income in the hands of the claimant only.

This position was not changed by Finance (No. 2) Act 2013, which inserted Section 126 (2B) to the Taxes Consolidation Act 1997 in order to reaffirm the position that any increase in the amount of such a pension in respect of a qualifying adult is treated as if it arises to, and is payable to, the beneficiary of the pension i.e. the person who qualifies for the pension. It is, therefore, that person's obligation to declare the pension, including any amount paid in respect of a qualifying adult dependent, as part of his or her income.

Tax Code

Questions (318)

Shane Ross

Question:

318. Deputy Shane Ross asked the Minister for Finance his plans to provide relief in the next budget to current homeowners in negative equity who are in receipt of rental income for their sole property, but also pay rental income themselves; and if he will make a statement on the matter. [31010/15]

Written answers

Minister for Finance

I am conscious of the challenges that individuals continue to face, particularly those who purchased homes at the peak of the property market, despite the improving economic conditions. All those paying USC and/or income tax are benefitting from the tax package announced in the last Budget, and as the Deputy is aware, I have stated my intention to prioritise further reductions in the tax burden faced by those on low and middle incomes in Budget 2016 and subsequent budgets, subject to having the required fiscal space.

With regard to the taxation of rental income, as the taxation of all rental property in the State is dealt with under the same legislation, an attempt to successfully carve out a specific cohort of landlords, such as homeowners in negative equity who rent elsewhere, in a manner that would avoid or minimise leakage might prove problematic.  In addition, it would be very difficult to police given that some individuals may seek to artificially qualify for the beneficial treatment proposed.

The creation of a separate category of residential landlords for tax purposes could also create difficulties in the market place. For example, such landlords could (by virtue of the tax saving) generate higher rental profits from the same market rents, thus obtaining an unfair advantage over other landlords of residential property.

Notwithstanding these points, the Deputy's suggestion has been noted and will be considered as part of my deliberations for the forthcoming Budget. Preparations for Budget 2016 and the consequent Finance Bill are ongoing, and it would not be appropriate for me to comment at this time on the specific detail of what changes, if any, are being considered regarding the taxation of rental income or any other tax measure.

Banking Sector

Questions (319)

Pearse Doherty

Question:

319. Deputy Pearse Doherty asked the Minister for Finance his views on the issues raised by a person (details supplied) in County Cork regarding the security of electronic transfers; and if he will make a statement on the matter. [31014/15]

Written answers

Minister for Finance

The European Communities Payment Services Directive (PSD) which was transposed into Irish legislation on 1 November 2009, ensures that the same legal framework applies to all payments made within Europe whereby businesses and consumers can make payments securely, cost effectively and efficiently. The PSD establishes the necessary legal framework for Single Euro Payments Area (SEPA) payments and also applies to existing national payment products.

Under SEPA, the Bank Identifier Code (BIC) and the International Bank Account Number (IBAN) are the primary bank account identifiers. The BIC is a unique identification code for a specific financial institution (country and bank name) and the IBAN is a standardised European bank account numbering system which uniquely identifies a customer's bank account. The IBAN is the sole payment account identifier for electronic national, international and cross border credit transfers and direct debits within the Euro area. When making a payment e.g. from Australia to a country in the SEPA area such as Ireland, the originator provides both the BIC and IBAN of the recipient in order for the transfer to be processed through the international system.

In the absence of further information, it appears the example of the payment given in this correspondence was credited correctly to the account indicated by the payer and that the issue of criminal activity did not arise.  Banks have a responsibility to adhere to various checks in order to deter criminal activity such as terrorist financing or money laundering.

I have been informed by the Central Bank that there is nothing to prevent an account holder giving an instruction to a payment services provider concerning the receipt of credits to an account but such a request would be a contractual matter and would be considered by the payment services provider in the context of the terms and conditions applying to an account.

Tax Reliefs Availability

Questions (320)

Éamon Ó Cuív

Question:

320. Deputy Éamon Ó Cuív asked the Minister for Finance his plans to introduce a tax relief scheme for householders that experience continuous sewerage maintenance issues, that is, clearance of private combined drains or in some cases replacement of same; if there is any such scheme currently in existence; and if he will make a statement on the matter. [31019/15]

Written answers

Minister for Finance

I have no plans to introduce an incentive along the lines suggested by the Deputy. The Deputy will appreciate that tax reliefs and exemptions have costs which have to be paid for and their introduction must be considered only where there is a clear economic and social policy need to be addressed.

As you will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. You will also appreciate that I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.

I would mention however, that some assistance for the relevant householders, may be provided by the Home Renovation Incentive, which was introduced in Budget 2014. The scheme came into operation on 25 October 2013 and will run until 31 December 2015. The incentive provides income tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence. In Budget 2015 I extended the scheme to include rental properties, whose owners are subject to income tax.

Qualifying works are works which are subject to the 13.5% VAT rate. These works must cost a minimum of €4,405 (exclusive of VAT) which will attract an income tax credit of €595.  Where the cost of the work exceeds €30,000 (exclusive of VAT), a maximum income tax credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is carried out.

Vehicle Registration

Questions (321)

Sean Fleming

Question:

321. Deputy Sean Fleming asked the Minister for Finance if a vehicle (details supplied) can be reclassified in respect of the carbon emissions; and if he will make a statement on the matter. [31039/15]

Written answers

Minister for Finance

I am advised by Revenue that vehicles are classified for Vehicle Registration Tax (VRT) primarily by reference to the EU category of the vehicle. Revenue determines the EU category, in the case of a used vehicle that has been modified, by reference to documents submitted in support of the declaration for registration. The VRT rate is determined, if it is a category A vehicle, on the basis of the level of emissions, and if it is a category B vehicle, on the basis of the number of seats and the ratio of the unladen and maximum masses.

I am further advised by Revenue that they would be prepared, as a concession, to review the classification of the vehicle for VRT purposes in the event that the owner, following modifications to meet the criteria for EU category N1 classification, submits declarations of conversion and a National Standards Authority of Ireland Approved Test Centre Masses and Dimensions Test Report.  This review may result in the vehicle being reclassified as either a category B or C vehicle for VRT purposes resulting in a substantially lower VRT charge. Revenue's Central Vehicle Office has discussed the relevant details with the person concerned and the timeframe within which the modification process must be completed and the necessary declaration and report provided to Revenue.

VAT Rate Reductions

Questions (322)

Éamon Ó Cuív

Question:

322. Deputy Éamon Ó Cuív asked the Minister for Finance the position in relation to the reduced 9% VAT rate on the hospitality sector; if there has been any governmental or independent analysis on the initiative; the findings of same; the number of new jobs that have been created as a result; the equivalent for new jobs created in construction in the same period; the tax that has been lost to the Exchequer as a result of the VAT decrease; and if he will make a statement on the matter. [31044/15]

Written answers

Minister for Finance

The 9% Vat rate has been broadly welcomed by the tourism and hospitality industry since its introduction in July 2011 as part of the Jobs Initiative.

When I originally announced the Jobs Initiative in 2011, I made it clear that the effects of the VAT reduction would be reviewed before Budget 2013 to ensure that it encouraged employment in the affected sectors. This analysis of the VAT rate reduction, carried out by my Department, looked at the rate of pass through to final consumers and the employment effects. It demonstrated that prices in the basket of goods and services covered by the Jobs Initiative had fallen relative to non-Jobs Initiative goods and services even after removing the effects of rising energy prices.

The most recent Quarterly National Household Survey results from the CSO indicate that the current level of employment in the Accommodation and Food Services sector has increased by 22,300 (20%) since the introduction of the reduced 9% VAT rate. Over the same time period, employment in Construction has increased by 19,500 (17%).

The estimated cost to the Exchequer of the reduced 9% VAT rate, since its introduction in 2011 to end 2014, is €1,533 million.

Banking Sector

Questions (323)

Sean Fleming

Question:

323. Deputy Sean Fleming asked the Minister for Finance his views on a project (details supplied); and if he will make a statement on the matter. [31084/15]

Written answers

Minister for Finance

As the Deputy will be aware under the Relationship Framework the State does not intervene in the day to day operations of the bank or their management decisions regarding commercial matters. AIB has previously indicated that as part of its restructuring plan to reduce costs and increase efficiencies, outsourcing of certain functions would be considered in consultation with unions and affected staff. I have been informed by AIB that there are no compulsory redundancies as a result of AIB's recent outsourcing activities and last month the staff in the affected areas voted in favour of the outsourcing arrangements.

This strategy was agreed by the Board as part of the bank's IT transformation Programme in September 2013, which was designed with the objective of positioning the Bank's information technology  environment for resilient and uninterrupted delivery to facilitate digital banking, while in parallel, protecting production services and reducing costs to serve.

The Bank has selected two Multinational specialist providers Wipro and Infosys to deliver the required service both of which are located in Ireland. Infosys has indicated that they will set up a 200-seat facility in Dublin to house the staff who will be transferring from AIB as well as any additional staff who will be appointed locally following recent agreements that Infosys has signed. In addition, management in Infosys have indicated that the partnership with AIB is a springboard for them to expand its services into a new market. Infosys intends to set aside US$10 million from its global Innovation Fund for Ireland-based start-ups.

Pension Levy

Questions (324)

Sean Fleming

Question:

324. Deputy Sean Fleming asked the Minister for Finance his views on the pension levy on private pension schemes; his plans to reimburse pension funds for the levy deducted over recent years in view of the fact that the effect of the levy would be a reduction in pension that would last for the lifetime of the pensioner in view of the levy which reduced the value of the fund; and if he will make a statement on the matter. [31085/15]

Written answers

Minister for Finance

This question refers to the stamp duty levies applying to the assets of funded pension arrangements introduced in 2011 to pay for the Jobs Initiative, the chargeable persons for which are the trustees of pension schemes and others responsible for the management of pension fund assets.

The original 0.6% stamp duty levy on pension fund assets ended last year. The additional levy of 0.15% which I introduced for 2014 and 2015, mainly to help continue to fund Jobs Initiative, will also end after this year.

The position is that the equivalent value of all of the money raised from the stamp duty levy has been used to fund the wide range of measures introduced in the Jobs Initiative to protect existing jobs and to help create new jobs and the Initiative has been a success in this regard. The measures introduced include expenditure measures such as the JobBridge and Springboard schemes, as well as a number of tax and PRSI incentives such as the reduction in the VAT rate from 13.5% to 9% for the tourism and hospitality sectors and the halving of the lower employer PRSI rate.

While the pension fund levies have ceased and will be ceased as I have already outlined, I have no plans to repay the pension fund levy collected as requested in the question. The value of the funds raised by way of the levy have been used to protect and create jobs and this has helped to create the improving financial and economic position of the State. Taxpayers to whom the impact of the levy may have been passed on by the chargeable persons responsible for the payment of the levy (the pension scheme trustees etc) will benefit from the changes which I began in Budget 2015 and which will continue in future Budgets to reduce the tax burden on low and middle income earners.

Tax Reliefs Application

Questions (325, 360)

Shane Ross

Question:

325. Deputy Shane Ross asked the Minister for Finance further to Parliamentary Question No. 106 of 9 July 2015, if the Revenue Commissioners have the legal remit to interpret the rent-a-room relief, governed by section 216A of the Taxes Consolidation Act 1997, to exclude those whose rental income is derived through the use of Airbnb; if he considers this is sufficiently important for the many Airbnb hosts to require specific legislation clarifying the position; his views that it is fair to have income tax charges now retrospectively imposed when it was understood that the income would fall under the rent-a-room relief; and if he will make a statement on the matter. [31130/15]

Olivia Mitchell

Question:

360. Deputy Olivia Mitchell asked the Minister for Finance the way in which the legislation governing the rent-a-room scheme prohibits the exclusion of Airbnb from the scheme or if this is an interpretation of the legislation by the Revenue Commissioners; and if he will make a statement on the matter. [31560/15]

Written answers

Minister for Finance

I propose to take Questions Nos. 325 and 360 together.

Rent-a-room relief is provided for in section 216A of the Taxes Consolidation Act (TCA) 1997. Under section 216A, sums arising to an individual in respect of the letting of a room or rooms as residential accommodation in his or her home and from meals or other services supplied in connection with the letting, are exempt from income tax where they are below the annual limit for the tax year in question (€12,000 for 2015) and certain other conditions are satisfied.

The purpose of the relief is to increase the supply of rental accommodation by incentivising homeowners to rent out rooms in their principal primary residences to individuals on a residential basis, that is where the individuals are effectively using the room(s) either on its own or in conjunction with other parts of the residence as their home. It is not, and never was intended to apply to income arising from the provision of guest accommodation to occasional visitors.

Under section 849 of the TCA 1997, all duties of tax are placed under the care and management of the Revenue Commissioners. I am further advised by the Commissioners that, having regard to both the express policy intent of the legislation and the construction of section 216A, which refers to residential accommodation as opposed to guest accommodation, they have consistently taken the view that the relief does not apply in respect of income from the provision of accommodation to occasional visitors for short periods or where rooms are let for business use or guest accommodation. This position is clearly stated in Chapter 7.1.32 of Revenue's Income Tax, Capital Gains Tax and Corporation Tax Manual, which is available on www.revenue.ie. The manual was updated in February 2015 to reflect the fact that I increased the annual limit for the relief from €10,000 to €12,000 for 2015.  In that context, Revenue took the opportunity in the light of media comments, to emphasise that the exclusion of short term guest accommodation applies equally where such accommodation is provided through an online accommodation booking site such as Airbnb.

Any question relating to the charging of income tax is a matter for Revenue. In this regard, the Commissioners advise that property owners who receive income from the provision of occasional guest accommodation should make a return of their taxable profits to Revenue and pay the resultant income tax, if any, under self-assessment rules in the normal manner.

Finally, I should say that in relation to calls from a number of quarters to extend rent-a-room relief to income earned from the provision of short term guest accommodation to occasional visitors, I am mindful that acceding to such requests could lead to unfair competition in the guest accommodation sector generally, by placing B&B and guest house operators who provide accommodation in the course of a trade at an unfair disadvantage.

Tax Exemptions

Questions (326)

Timmy Dooley

Question:

326. Deputy Timmy Dooley asked the Minister for Finance the reason a day care centre (details supplied) in County Clare has been excluded for VRT and VAT refund on the purchase of a minibus which is used for transporting severely incapacitated senior citizens to attend the day care centre; and if he will make a statement on the matter. [31149/15]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that legislation governing the Drivers and Passengers with Disabilities Scheme is provided for in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994 (S.I. 353 of 1994). Full details of the Scheme are set out in Information Leaflet VRT 7 which is available on the Revenue website.

In order to qualify for relief under the Scheme, an organisation must be 'chiefly engaged in a voluntary capacity, on a non-commercial basis, in the care and transport of persons who are severely and permanently disabled'. A person is defined as permanently and severely disabled within the terms of the Regulations if they satisfy one of the following medical criteria outlined in Regulation 3 of S.I. 353 of 1994:

- be wholly or almost wholly without the use of both legs;

- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

The organisation (details supplied) made an application in July 2015 to Revenue. The work carried on by the organisation was described in the application as a 'Day Care Centre for the older person and Dementia/Alzheimer's specific clients'.  As this organisation is not transporting people who meet the medical criteria as set out above it does not qualify under the Scheme.

A letter issued to the organisation on 20 July 2015 explaining that it was deemed not to be chiefly engaged in the care and transport of severely and permanently disabled persons, as defined in Regulation 3 of S.I. 353 of 1994. In this letter, details were provided of the legal requirements for the relief, the precise grounds for the refusal and an outline of the appeals procedure. An appeal has not been received by the Revenue Commissioners.

Question No. 327 answered with Question No. 294.

VAT Exemptions

Questions (328)

Paul Murphy

Question:

328. Deputy Paul Murphy asked the Minister for Finance if he is aware of the practice in many airports of passengers en route to duty free destinations, and able to avail of duty free shopping, being charged prices in shops at the full VAT inclusive price (details supplied); if there are VAT returns made for duty free purchases; if the Revenue Commissioners have any concerns about this practice; and if he will make a statement on the matter. [31187/15]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners certain retail outlets operating at Irish airports may apply the zero rate of VAT to retail sales of goods to passengers travelling to destinations outside the European Union. This is allowed under paragraph 7 of Schedule 2 of the Value-Added Tax Consolidation Act 2010. All goods supplied to other travellers are liable to Irish VAT at the appropriate rates.

Not all retail outlets are allowed to operate the scheme.  This is subject to an application, vetting and approval process. Revenue approval is only granted where there is a robust sales system in place to ensure the zero-rated sales to customers travelling outside the European Union are clearly identified. The approved retailer is required to retain evidence, such as the boarding pass and flight details, produced by passengers travelling to non-EU destinations and the approved retailer must retain this detail in electronic format for future examination by Revenue, if required.

The single pricing structure mentioned by the Deputy has been brought to my attention previously. Under the single pricing structure all travellers pay the single price but approved retailers do not charge VAT on sales to identified non-EU travellers.  I would point out that the pricing structure in any business is a commercial decision for the business and not a Revenue matter. Revenue's focus is to ensure that approved retailers comply with their VAT obligations.

I would point out that the information furnished to Revenue on VAT returns does not require the yield from particular activities to be separately identified. The amount of VAT collected in respect of airport based retailers cannot be identified in the overall yield of VAT.

Budget 2016

Questions (329)

Michael Healy-Rae

Question:

329. Deputy Michael Healy-Rae asked the Minister for Finance his views that budget 2016 provides an opportunity for the Government to build on the 2014 review of agri-taxation measures in the area of taxation (details supplied); and if he will make a statement on the matter. [31200/15]

Written answers

Minister for Finance

Preparations for budget 2016 and the consequent Finance Bill are ongoing. It would not be appropriate for me to comment on what changes, if any, are being considered regarding taxation and agriculture or in relation to any other tax measure.

Budget 2016

Questions (330)

Peter Mathews

Question:

330. Deputy Peter Mathews asked the Minister for Finance in relation to the inheritance tax, his plans to abolish the tax in the forthcoming budget; and if he will make a statement on the matter. [31208/15]

Written answers

Minister for Finance

Preparations for budget 2016 and the consequent Finance Bill are ongoing. It would not be appropriate for me to comment on what changes, if any, are being considered to capital acquisitions tax (which applies to gifts and inheritances) or any other tax measure.