Written Answers Nos. 331-350
331. Deputy Clare Daly asked the Minister for Finance the steps taken to address the failure of the Permanent TSB to pass on changes in the standard variable rate to customers, despite stating in July that it would do so, though no contact has been made with any mortgage holders by September. [31267/15]
View answerI have been informed by permanent tsb that following the initial announcement on July 1st which allows over 70,000 existing homeloan customers on Standard Variable Rate Mortgages of 4.5% to move to new mortgage interest rates which will start from as little as 3.70% dependent on the loan to value of the borrowers property, ptsb has worked as quickly as possible to get letters issued to the relevant customers. This two month implementation planning period was required to ensure a seamless process was in place to make this switch as easy as possible for the customer. PTSB has now issued over 70,000 offer letters to all of the eligible customers.
These offer letters were issued in 3 tranches from 1 to 14 of September and a "switch pack" included in the letter includes:
- A switch advisory letter;
- An application form including a stamped addressed envelope;
- A valuation voucher;
- A key information document;
- A Terms and Conditions document
This offer will lead to reductions in monthly interest rates of up to 0.80% for many of the existing borrowers. For example, if the amount owed on a home is less than 50% of the value of the home today, the customer will be able to reduce their interest rate from today's SVR of 4.50% to the new MVR (Managed Variable Rate) of 3.70%. It will also mark the first time in the Irish market that existing, as well as new home loan mortgage customers will be able to access more competitive rates of interest depending on the size of the loan relative to the current value of their home.
332. Deputy Jonathan O'Brien asked the Minister for Finance the tax liability of those on community employment schemes; and if the rates paid to persons on the CE schemes for adult dependants, and child dependants, are liable to be taxed, whether for PRSI, USC, or any other forms of taxation. [31270/15]
View answerI am advised by the Revenue Commissioners that all Community Employment payments to participants, including those with adult and child dependents, are assessable for Income Tax (PAYE) purposes. The actual amount payable by any individual will depend on her/his Tax Credits and Standard Rate Cut-Off Point.
Community Employment participants pay PRSI at Class A8/A9 which counts as a full Class A contribution. If the Community Employment payment is less than €352 per week an employee contribution does not need to be paid. If the Community Employment payment is greater than €352 a week, the employee PRSI contribution is 4%.
Payments made to participants on a Community Employment Scheme are treated as social welfare payments and are therefore exempt from USC under section 531AM of the Taxes Consolidation Act 1997.
333. Deputy Michelle Mulherin asked the Minister for Finance the extent to which he is aware of compensation payments that have been made by the motor fuel industry to motor insurance companies as compensation for insurance pay outs to drivers who have been victims of contaminated fuel such as stretched petrol or laundered diesel; the impact of any such payments on fuel prices and insurance premiums; and if he will make a statement on the matter. [31278/15]
View answerI have no information on the issue raised in the question by the Deputy. It appears to be a matter concerning companies in the oil industry and in the motor insurance industry.
334. Deputy Clare Daly asked the Minister for Finance the contact he has had with Garda authorities further to information supplied to him in relation to allegations of money laundering (details supplied). [31314/15]
View answerI am aware of the allegations made in the programme in February 2015 to which the Deputy refers.
As I said in reply to the previous Parliamentary Question to which the Deputy referred, criminal wrongdoing is a matter for An Garda Síochána.
On the issue more generally, in Ireland money laundering has been treated as a very serious offence since the passing of the Criminal Justice Act in 1994. The law in this area was updated by the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended by Part 2 of the Criminal Justice Act 2013 ("the Act"). The Act transposes European Union Law on money laundering (the Third Money Laundering Directive (2005/60/EC) and its Implementing Directive (2006/70/EC)) into Irish Law.
Newly agreed measures on anti-money laundering and countering the financing of terrorism mean that amendments to the Act will be necessary by June 2017.
335. Deputy John O'Mahony asked the Minister for Finance if a tax refund can be claimed for the use of electricity when a person is using a continuous positive airway pressure machine; and if he will make a statement on the matter. [31321/15]
View answerI am advised by the Revenue Commissioners that relief in respect of health expenses is allowed in accordance with the provisions of section 469 of the Taxes Consolidation Act 1997. In order to qualify for relief an individual must show that he or she has incurred "health expenses" for the provision of "health care". It is not the case that all expenses incurred on health care qualify for relief. For the purposes of section 469 "health care" is the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability. Health expenses include the cost of treatment necessarily incurred in connection with the services of a medical practitioner.
Health expenses also include the supply, maintenance or repair of any medical surgical, dental or nursing appliance used on the advice of a practitioner. I am further advised by the Revenue Commissioners that the on-going cost of operating an appliance is not allowable unless the appliance is used in connection with the services of a medical practitioner and is used subject to ongoing medical supervision.
If respirators are used on the advice of a medical practitioner and under medical supervision, then I understand that the Revenue Commissioners are prepared to consider the question of relief for the cost of the electricity used to run the machine. My officials will forward any submission in this regard to the Revenue Commissioners for their consideration.
336. Deputy John O'Mahony asked the Minister for Finance if he will provide in tabular form a county breakdown of green diesel operations stopped by the Garda in 2011, 2012, 2013 and 2014; and if he will make a statement on the matter. [31323/15]
View answerI assume that the Deputy is referring to the number of roadside green diesel operations carried out by the Revenue Commissioners for the years 2011 to 2014. The figures are set out in the following table.
|
County |
2011 |
2012 |
2013 |
2014 |
|
Clare |
71 |
31 |
70 |
88 |
|
Cork |
54 |
63 |
72 |
70 |
|
Donegal |
116 |
84 |
90 |
106 |
|
Dublin |
81 |
91 |
170 |
253 |
|
Galway/Westmeath/Offaly |
121 |
106 |
57 |
59 |
|
Kerry |
139 |
185 |
146 |
108 |
|
Kildare |
15 |
22 |
4 |
7 |
|
Limerick |
106 |
110 |
134 |
155 |
|
Louth |
89 |
51 |
144 |
588 |
|
Mayo |
62 |
57 |
51 |
54 |
|
Meath |
26 |
29 |
9 |
17 |
|
Monaghan/Cavan/Longford |
130 |
125 |
144 |
159 |
|
Sligo |
52 |
68 |
123 |
129 |
|
Waterford/Tipperary/Kilkenny/Carlow/Laois |
95 |
52 |
45 |
130 |
|
Wexford |
4 |
86 |
47 |
62 |
|
Wicklow |
20 |
13 |
12 |
2 |
337. Deputy John O'Mahony asked the Minister for Finance his plans to reduce the VAT rate on the rental of medical machines to patients who need and use these machines and currently pay the VAT rate of 23%; and if he will make a statement on the matter. [31324/15]
View answerI 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. In the circumstances, the service of renting of medical machines is liable to VAT at the standard rate, currently 23%.
I would point out that Value-Added Tax (Refund of Tax) (No. 15) Order 1981 enables VAT paid on qualifying goods, which may include medical machines, be refunded where the goods are purchased for the exclusive use of disabled persons suffering a specified degree of disablement. The Order does not however apply to VAT on the rental of qualifying goods.
338. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the rent-a-room scheme; and if he will make a statement on the matter. [31342/15]
View answerSection 216A of the Taxes Consolidation Act 1997 provides for the rent-a-room scheme. This scheme was introduced in Finance Act 2001 as an incentive to encourage individuals to let rooms in their principal private residence in order to bring about an increase in the availability of rental accommodation, particularly for the student sector.
No legislative change has been made to the rent-a-room scheme to exclude AirBnB lettings. The provision of guest accommodation has never qualified for relief under this scheme. The Revenue operational manual has clearly stated that income from the provision of accommodation to occasional visitors for short periods does not qualify as visitors use the accommodation as guest accommodation rather than for residential purposes. Following the entry of AirBnB and others into the short-term accommodation market, Revenue issued an eBrief in February 2015 which amended the operational manual to further clarify that accommodation provided through online booking sites is considered to be guest accommodation. A copy of the operational manual can be accessed on the Revenue website at: http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf.
339. Deputy Ruth Coppinger asked the Minister for Finance his views on certain insurance companies making a decision not to insure cars that are over 15 years of age; if he will introduce regulations in relation to this matter to enable vehicle owners to access insurance policies; and if he will make a statement on the matter. [31356/15]
View answerIn my role as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. The provision of insurance cover as well as 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 offer insurance and they consider these risks when determining their policies conditions, 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 +353 1 6761820, 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.
340. Deputy Fergus O'Dowd asked the Minister for Finance his views on matters raised in correspondence (details supplied) in relation to credit unions; and if he will make a statement on the matter. [31359/15]
View answer391. Deputy Finian McGrath asked the Minister for Finance his views on correspondence (details supplied) regarding regulations to be introduced for credit unions; and if he will make a statement on the matter. [32281/15]
View answerI propose to take Questions Nos. 340 and 391 together.
My role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
While it is important to distinguish this division of roles, it is equally important to recognise that both the Registrar of Credit Unions and myself, as Minister for Finance are working together for the safety of members' savings and the security of the credit union sector.
I have been informed by the Central Bank that the draft regulations set out in Consultation Paper 88 (CP88), will be introduced on commencement of the remaining sections of the 2012 Act at end December 2015. The regulations will replace and, where appropriate, amend a number of requirements that currently exist in legislation and guidance. Additional requirements have also been included in the regulations, where necessary, to strengthen the regulatory framework.
The regulations introduce a maximum individual member's savings limit of €100,000 which will ensure the protection of members' savings and continue to ensure that credit unions' funding is sufficiently diversified and is not dependent on a small number of members. In order to take account of the nature, scale and complexity of a credit union, the Central Bank, following consultation, is developing its application criteria to allow credit unions apply to the Central Bank to retain savings in excess of €100,000.
The Registry of Credit Unions has informed me that it intends to engage with the representative bodies and to invite comments from them prior to finalisation of the application process. When the application process is finalised, the Registry of Credit Unions will provide an application form and explanatory notes in order to assist credit unions. The Registry of Credit Unions has also informed me that a communication on this matter will issue from the Registrar of Credit Unions in the coming days.
The Central Bank has further informed me that it is open to working with the credit union sector to ensure that prudent and appropriate business development can be facilitated within the regulatory framework. As set out in the feedback statement on CP88, the Central Bank intends to invite interested parties to discuss business model development in the coming months.
While to date the Central Bank has not received any specific proposals regarding investment projects of a public nature, the Central Bank is willing to consider such proposals including the type of regulations that would be required to facilitate such proposals.
The Registrar of Credit Unions has informed me that the Central Bank is currently carrying out a lending restriction review programme and has invited credit unions with lending restrictions to apply to have those restrictions reduced or lifted. The closing date for credit unions to apply is 30 September 2015. While applications are still being processed, of credit unions that have applied to date, 45% of those credit unions have had their lending restrictions lifted. In relation to longer term lending limits, credit unions will be able to apply to the Central Bank for an extension of these limits. Approval will be subject to conditions set by the Central Bank.
The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to support a strengthened and growing credit union movement.
341. Deputy Éamon Ó Cuív asked the Minister for Finance if he will clarify the rules in relation to the processing of inheritance tax cases; if the rules and-or guidelines applying to thresholds-rates are based on the date of death, the date that probate is granted or accepted; the way changes between these days are handled; if marginal relief is granted; and if he will make a statement on the matter. [31374/15]
View answerI am advised by the Revenue Commissioners that, for the purposes of inheritance tax, the relationship between the person who provides the inheritance (i.e. the disponer) and the person who receives the inheritance (i.e. the beneficiary), determines the maximum life-time tax-free threshold known as the "Group Threshold" - below which inheritance tax does not arise. There are, in all, three separate Group Thresholds based on the relationship of the beneficiary to the disponer. These are:
Group A: tax free threshold €225,000 applies where the beneficiary is a child (including adopted child, stepchild and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.
Group B: tax free threshold €30,150 applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.
Group C: tax free threshold €15,075 applies in all other cases.
Where the value of an inheritance exceeds a beneficiary's tax-free Group Threshold, inheritance tax is charged at a flat rate of 33% on the amount of the excess.
There are two important dates that are relevant for the taxation of an inheritance. These dates are used for different purposes and are mutually exclusive. Firstly, the date of death of a disponer is the date by reference to which the Group Thresholds and tax rates are determined. Therefore, whatever thresholds and rates are in force on this date apply for the purpose of taxing the value of an inheritance. These rules are based on statute and are strictly applied. There is no provision for marginal relief in circumstances where, for example, a disponer dies within a short time of a change in the statutory thresholds and/or rates.
Secondly, the date on which probate or administration is granted is generally used as the 'valuation date'. This date has no effect whatever on the applicable Group Thresholds and tax rates. The valuation date is the date on which the market value of the assets/property comprising the inheritance is established. This market value is then compared to the relevant Group Threshold and the tax rate applied as appropriate on any excess of the market value over the threshold. This date also determines when any inheritance tax must be paid and a tax return must be submitted to Revenue.
Inheritance tax is a self-assessed tax and tax returns are processed on this basis. As with any other self-assessed tax, Revenue selects a number of cases for compliance checks and audit, generally basing the selection on its risk rules but also based on a certain amount of random selection.
342. Deputy Éamon Ó Cuív asked the Minister for Finance the amount of tax collected on the sale of alcoholic drinks in any recent years, to include excise taxes and VAT on sales; his views on the trends in recent years; and if he will make a statement on the matter. [31375/15]
View answerI am advised by the Revenue Commissioners that a wide range of statistical information is available on the Commissioners' Statistics webpage: http://www.revenue.ie/en/about/statistics/index.html. In relation to the Deputy's question, detailed information on Excise receipts by commodity can be found at http://www.revenue.ie/en/about/statistics/net-receipts-by-commodity.pdf. The most recent year for which detailed data are available is 2013. Data for 2014 will be published in due course.
I am further informed by the Revenue Commissioners that the total amount of revenue generated for the Exchequer in each of the past five years from Excise and VAT on Alcohol is as shown in the following table.
Please note that VAT receipts are estimated, as VAT returns do not require the yield from a particular product to be identified and the actual VAT yield for each category cannot therefore be determined.
|
Excise |
VAT |
|
|
Alcohol |
(Estimated) |
|
|
€m |
€m |
|
|
2010 |
826.4 |
1,010.5 |
|
2011 |
829.5 |
1,014.0 |
|
2012 |
846.1 |
1,088.8 |
|
2013 |
1,002.0 |
980.8 |
|
2014 |
1,139.8 |
1,053.3 |
343. Deputy Paul Murphy asked the Minister for Finance the number of staff employed by the Financial Services Ombudsman each year since 2005; and the number of unfilled positions each year since 2005. [31420/15]
View answerAt the outset, I must point out that the Financial Services Ombudsman is independent in the performance of his statutory functions.
The Financial Services Ombudsman has informed me that the information requested by the Deputy is as follows:
|
Year |
No. of Staff employed by the Financial Services Ombudsman @ year end |
Vacancies |
|
2005 |
22 |
12 |
|
2006 |
25 |
9 |
|
2007 |
28 |
6 |
|
2008 |
29 |
5 |
|
2009 |
27 |
7 |
|
2010 |
32 |
2 |
|
2011 |
34 |
0 |
|
2012 |
33 |
1 |
|
2013 |
39 |
0 (numbers increased due to maternity cover) |
|
2014 |
34 |
0 |
|
2015 |
31.5 (to 21.09.15) |
2.5 |
345. Deputy Seamus Kirk asked the Minister for Finance the position regarding farmers who purchased milk quota during the period 1983 to 2000; if the amount of expenditure on same can be off-set against capital gains tax; and if he will make a statement on the matter. [31440/15]
View answer372. Deputy Seamus Kirk asked the Minister for Finance if the capital gains tax allowance on milk quota purchased between 1983 and 2000 is time limited; and if he will make a statement on the matter. [31664/15]
View answerI propose to take Questions Nos. 345 and 372 together.
I propose to deal with these questions together as they relate to the same issue. I am advised by the Revenue Commissioners that a claim for capital gains tax relief may arise under section 538 of the Taxes Consolidation Act 1997 in respect of losses incurred by the owners of milk quotas as a result of the abolition of those quotas earlier this year where they were purchased by the persons concerned. The allowable loss is the capital loss equivalent to the amount incurred by the person when the milk quota was acquired. However, the amount of the loss allowable is restricted to the extent that it has been covered by the amount of capital allowances or renewals allowances granted for income tax purposes. This restriction applies to quotas which were purchased on or after 1 April 2000. Claims for relief under section 538 of the Taxes Consolidation Act 1997 should be made to the tax district dealing with the tax affairs of the person concerned.
Where a claim for relief under section 538 of the Taxes Consolidation Act 1997 is allowed, the amount of the loss can be set off against chargeable gains made by a person in the year 2015 or in any subsequent year.
Assuming that the Capital Gains Tax Allowance on milk quota referred to by the Deputy relates to the loss arising as a result of the abolition of milk quotas, there is no time limit within which the loss may be carried forward and set off against chargeable gains.
346. Deputy Pearse Doherty asked the Minister for Finance the value of funds domiciled here currently frozen by United Nations or European Union regulation; if he will provide a breakdown of the nationality of the owners of these funds; the UN or EU regulation that provoked the freezing of the funds in each case; and if he will make a statement on the matter. [31441/15]
View answerThe Central Bank has advised me on this issue and provided the following information. The EU implements Restrictive Measures autonomously at an EU level or as a result of resolutions of the Security Council of the United Nations through the publication of EU Regulations. EU Regulations are binding on all Member States once published in the EU Official Journal.
Financial Institutions in Ireland are required to notify the Central Bank when funds have been frozen or blocked. The Central Bank has included as follows a current list of the regimes and amounts of funds where it has received such notifications.
As the majority of funds frozen or blocked relate to entities, no nationality information is included.
|
Regime |
Currency and amount Frozen/Blocked/Refused |
|
Al Qaida |
$1,219,932 |
|
PKR 53,612 |
|
|
€1 |
|
|
Iran |
$214,716 |
|
GBP 687,427 |
|
|
AUD 810 |
|
|
AED 6,377 |
|
|
€ 940 |
|
|
Libya |
XOF 780,000 |
|
$ 1,664,292,092 |
|
|
EUR 1,274,909 |
|
|
Syria |
$ 620,951 |
|
ZAR 1,626.54 |
|
|
Other regimes such as Liberia/Burma/Myanmar |
$ 8,246 EUR 3,809.00 |
|
Somalia/North Korea |
PKR 297 KRW 50,000.00 |
347. Deputy Pearse Doherty asked the Minister for Finance the legal situation whereby funds frozen by United Nations or European Union regulation are linked to individuals who have died or regimes that have ceased to exist; and if he will make a statement on the matter. [31442/15]
View answerThe EU implements Restrictive Measures autonomously at an EU level or as a result of resolutions of the Security Council of the United Nations through the publication of EU Regulations. EU Regulations are binding on all Member States once published in the EU Official Journal.
In implementing EU or UN sanctions in Ireland, we await an EU Regulation and then create corresponding domestic penalties for breach of the EU Regulation. EU Regulations have "direct effect" in Irish law, and penalties for the breach of such EU Regulations are specifically provided for through the enactment of statutory instruments under the European Communities Act 1972 (as amended), as well as certain statutory instruments under the Criminal Justice (Terrorist Offences) Act 2005.
Sanctions regimes are reviewed on a regular basis and where an individual has died or an entity has ceased to exist, the process is to await an amending EU Regulation that may take into account a change in circumstance as described. The Central Bank informs me that funds frozen by an EU regulation remain frozen until such time as the individual or entity name subject to the freezing is de-listed by the EU. The process of 'de-listing' can occur in a number of cases including evidence of mistaken listing, a relevant subsequent change in facts, emergence of further evidence, death of a listed person or the liquidation of a listed entity. Similarly, if a person or entity is de-listed from the UN sanctions list, relevant amendments are made to the corresponding EU Regulation.
348. Deputy Billy Kelleher asked the Minister for Finance the actions he is taking to ensure that home owners in areas that previously experienced flooding such as Meadowbrook, Glanmire, County Cork, are given house insurance by providers which they are currently being denied; and if he will make a statement on the matter. [31458/15]
View answerI am very much aware of the difficulties that the absence of flood insurance cover can cause to householders and businesses. However, I do not have the power to direct insurance companies to provide flood cover to specific individuals.
The 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 and the need to make 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 sometimes make decisions to discontinue certain types of cover which they consider high risk. Insurance Ireland has indicated that 98% of policyholders have household insurance which includes flood cover.
Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. The Office of Public Works is carrying out an assessment of flood risk throughout the country under the National Catchment Flood Risk Assessment & Management (CFRAM) Programme. This programme will include the production of a comprehensive suite of flood risk maps and the development of flood risk management plans for the areas most at risk. The plans will consider the best possible options, both structural and non-structural, for dealing with the risks on a long-term basis.
This commitment is underpinned by a very significant capital works investment programme which will see up to €225 million being spent on flood relief measures over a five year period from 2012 to 2016. Works are completed on a prioritised basis. Due to the cost and scale of these types of flood defence works, this approach will see benefits over the medium and long term.
The OPW and Insurance Ireland have agreed on a sustainable system of information sharing in relation to completed flood alleviation schemes. The outcome of this arrangement is that the insurance industry will have a much greater level of information and understanding of the extent of the protection provided by completed OPW flood defence works. The industry will therefore be able to use this information when assessing the provision of flood insurance to householders in areas where works have been completed.
The Deputy has raised the issue of flood insurance in Glanmire, County Cork. My officials are advised by the Office of Public Works that a flood relief scheme for the Glanmire area, known as the Glashaboy Flood Relief Scheme, is being developed by Cork County Council with funding from the Office of Public Works. This project is expected to be completed in 2017 at which time, data in relation to it will be shared with Insurance Ireland.
I would also note that the Inter-Departmental Flood Policy Coordination Group, at which my Department is represented, has been reconvened to take a Whole of Government approach that is necessary to support the Flood Risk Management Plans being prepared by the Office of Public Works. The role of this Committee is to co-ordinate recommendations of Government Departments to introduce effective sectoral supports and policy measures in their areas of responsibility with regard to flooding. The Group is tasked with compiling its report to Government by Spring 2016.
I am advised that in cases where individuals are experiencing difficulty in obtaining flood insurance and believe that they are being treated unfairly it is open to them to contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance. Their service can be contacted at (01) 676 1914 or by email at info@insuranceireland.eu.
349. Deputy Ruth Coppinger asked the Minister for Finance further to Parliamentary Question No. 16 of 4 February 2015, if he will report on the review of the artists' exemption that his officials have undertaken. [31480/15]
View answerAs the Deputy is aware, my officials are currently carrying out a review of the artists' exemption. The results of that review will be taken into consideration as part of the forthcoming Budget.
The Deputy will also be aware that it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters that might be the subject of Budget decisions. Any announcement in relation to the artists' exemption will be made on Budget Day.
350. Deputy Finian McGrath asked the Minister for Finance his plans to reduce the value added tax on children’s school shoes in order to assist parents with the steep school expenses that they experience at the beginning of the academic year; and if he would support this matter. [31492/15]
View answerAs you are aware, Ireland applies the zero rate of VAT to children's clothing and shoes under defined circumstances. The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In this regard, the rate of VAT that applies to a particular good or service is determined by the nature of the good or service, and not by the status of the customer. Children's clothing and footwear are subject to the zero rate for children up to 11 years. Section 46(1)(b) Schedule: 2 Paragraph: 10(1) of the Value-Added Tax Consolidation Act 2010, clarifies the zero rate of VAT applied to children's clothes. The zero rating applies according to the following criteria:
Clothing described, labelled, marked or marketed as being for children under 11 years of age up to & including chest size 32; waist size 26; height 152 cm or other equivalent sizes. Children's footwear up to and including size 5½ (38 continental or equivalent).
Under the EU VAT Directive, Member States may retain the zero rates on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. As school uniforms for people over 11 years of age and children's footwear above size 5½ were not subject to the zero rate on 1 January 1991 it is not possible to apply the zero rate to them now.
In addition, Member States may apply a reduced VAT rate to those goods and services which are listed under Annex III of the EU VAT Directive. As clothes and shoes are not listed under this Annex the reduced rate cannot be applied to the supply of school uniforms or shoes. Therefore the only rate of VAT that can apply to the supply of school uniforms for children over 11 years of age or children's footwear above size 5½ (38 continental or equivalent) is the standard VAT rate of 23%.
