Written Answers Nos. 135 - 156
135. Deputy Clare Daly asked the Minister for Finance his views on the European Union having indicated to this Deputy that it is possible to update a regulation by a later directive and that it has used this technique to justify the over-valuation of assets and the hiding of losses in Irish banks; and the circumstances in which a directive, passed after a regulation, can be used to update that regulation. [16879/16]
View answerI understand that this question relates to Regulation (EC) No 1606/2002 and the Directive is 2013/34/EU.
I have been informed by the Department of Jobs, Enterprise and Innovation that Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards was amended, in Article 3 and Article 6, by Regulation (EC) No 297/2008 of the European Parliament and of the Council of 11 March 2008.
It was not amended by Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC.
On the valuation of assets I have also been informed by the Department of Jobs, Enterprise and Innovation that the EU-adopted Standard relevant to the measurement of financial assets in the financial statements of banks is International Accounting Standard No. 39 (IAS 39) on Financial Instruments: Recognition and Measurement.
That Standard was adopted by means of Commission Regulation (EC) No 2086/2004 of 19 November 2004 amending Regulation (EC) No 1725/2003 on the adoption of certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards the insertion of IAS 39. This text was supported by a qualified majority of Member States at the Accounting Regulatory Committee (ARC) meeting on 1 October 2004 and by the European Parliament.
The International Accounting Standards Board has issued a Standard replacing IAS 39, International Financial Reporting Standard No. 9, Financial Instruments. The new Standard, among other things, replaces the "incurred loss model" for assessing loan impairment with an "expected loss model".
The Commission is proposing that the EU adopt this new IFRS 9 standard. Accordingly, the draft Regulation to give effect to that adoption will soon be considered by the European Parliament and Council.
136. Deputy Pearse Doherty asked the Minister for Finance when the central credit register will come into operation and will operate it; and if he will make a statement on the matter. [16938/16]
View answerThe Central Credit Register (CCR) is a national mandatory database of credit and related data established, maintained and operated by the Central Bank, in accordance with the provisions of the Credit Reporting Act 2013 ('the Act').
The Central Bank continues to make progress on the implementation of the CCR since the enactment of the legislation in December 2013. In the last twelve months the Central Bank has:
- Completed a design stage to specify the detailed data requirements and technical CCR solution;
- Published feedback on 11 February 2016 to a Public Consultation Paper which sought views on keys issues relating to the CCR;
- Carried out a privacy impact assessment (PIA) to ensure the appropriate controls are in place to safeguard personal data across the end to end processes. This PIA has been shared with the Data Protection Commissioner.
- Prepared draft CCR regulations which were approved by the Commission of the Central Bank of Ireland on 25 February 2016.
As required by the Act, the Central Bank is currently consulting with the Data Protection Commissioner on the draft regulations which will specify the precise data to be collected and published by the CCR. Pending the outcome of this consultation, the exact timing of the making of the final regulations remains to be finalised.
I am informed by the Central Bank that following the making of the regulations the take on of data will be implemented on a phased basis, with Phase 1 focusing on lending to consumers and Phase 2 focusing on lending to businesses. It is expected that data submissions by lenders will commence six months after the finalisation of regulations but the final deadline for data submission will be influenced by the scale of the technical and operational changes to be implemented by over 500 lenders. Enquiries by lenders against CCR data are expected to commence around twelve months after the finalisation of regulations and once data quality has been assured.
The Central Bank will own the CCR data and it will act as data controller under the Data Protection Acts. Following a public procurement process in 2014, the Central Bank appointed CRIF Ireland Limited as its agent to build and operate the CCR on its behalf. The Bank and CRIF continue to work closely together on the project implementation and ongoing operations of the CCR.
137. Deputy Pearse Doherty asked the Minister for Finance his plans to place the code of conduct on mortgage arrears on a statutory footing; and if he will make a statement on the matter. [16939/16]
View answerThe Code of Conduct on Mortgage Arrears (CCMA) was issued by the Central Bank pursuant to the provisions of Section 117 of the Central Bank Act 1989 and regulated entities are required to comply with the provisions of the Code as a matter of law. The CCMA is therefore issued under statute and, as stated by the Supreme Court, it forms part of the law. The Central Bank has the power to administer sanctions for a contravention of this Code under Part IIIC of the Central Bank Act 1942.
It is clear that where a borrower actively engages with their lender under the CCMA with a view to agreeing a sustainable arrangement to address their mortgage arrears, it is more likely that an equitable arrangement will be found and that borrower will be able to remain in their family home. Over 120,400 PDH mortgage accounts have been restructured up to the end of Q1-2016.
As the Deputy is aware, the CCMA has already been reviewed and updated over time and the Government will work with the Central Bank to ensure that the code continues to be relevant, fair and balanced in respect of the legitimate interests of debtors and creditors all the while promoting the availability of sustainable solutions to address genuine mortgage difficulty.
138. Deputy Pearse Doherty asked the Minister for Finance his plans to amend section 33AK of the Central Bank Act 1942 in line with the banking inquiry’s recommendation; and if he will make a statement on the matter. [16940/16]
View answerThe Report of the Joint Committee of Inquiry into the Banking Crisis (Banking Inquiry) recommended that: "A full review should take place of section 33AK of the Central Bank Act 1942, to ensure that only documents deemed 'secret' which are independently reviewed by a High Court judge are withheld from any future Oireachtas inquiry."
Section 33AK of the Central Bank Act 1942, as amended, deals with the circumstances under which the Central Bank can disclose confidential information to third parties.
Section 33AK was most recently amended under the Central Bank (Amendment) Act 2015 (No. 1), to ensure that information could be disclosed to the Banking Inquiry.
My Department and the Central Bank are currently examining all of the recommendations emanating from the Banking Inquiry Report, including the proposal for a further amendment to Section 33AK.
On completion of that examination, I will consider the need to bring forward amending legislation to provide for any recommendations arising from the Banking Inquiry Report.
139. Deputy Pearse Doherty asked the Minister for Finance the amount paid to a firm (details supplied) to date and the expected final costs in respect of work on the Central Bank consolidation Bill; and if he will make a statement on the matter. [16941/16]
View answerA tender was awarded to the firm in question in November 2014 to assist the Department in the drafting of a Central Bank Consolidation Bill.
This is a very complex project that requires comprehensive examination of all of the collectively cited Central Bank Acts and that work is still ongoing.
The tender award price is a fixed fee of €100,000 irrespective of the time required to complete the project. No monies have been paid to date.
140. Deputy Pearse Doherty asked the Minister for Finance the status of the planned disposal of the floating bonds held by the Central Bank related to the promissory notes; his plans to alter this strategy; the discussions he had with the Central Bank and with the European Central Bank on the issue; and if he will make a statement on the matter. [16942/16]
View answerThe Central Bank of Ireland is independent in the exercise of its functions and the management of its investment holdings are a matter for the bank themselves, neither I nor the Department of Finance have any role in the matter.
The Central Bank of Ireland ("CBI") indicated a minimum disposal schedule of €0.5 billion up to the end of 2014, €0.5 billion per annum 2015 2018, €1 billion per annum 2019 2023 and €2 billion per annum after that until all the bonds are sold. However, the CBI also stated that it would dispose of the government bonds as soon as possible, provided conditions of financial stability permit. This position remains unchanged. Due to improved financial stability conditions, the disposals of fixed and floating rate government bonds from the Special Portfolio have been faster than the minimum. However, any decision to accelerate sales cannot be permanent or predetermined by the CBI as the sales programme must be able to adjust to market conditions taking into account the views of the NTMA regarding the management of the State's interest rate risk, the market absorption capacity, the State's general issuance programme and target maturity profile as well as the financial impact.
141. Deputy Pearse Doherty asked the Minister for Finance if the figures given in the Central Bank's published insurance statistics are provided by the industry or if they are audited by the Central Bank before publication; and if he will make a statement on the matter. [16944/16]
View answerThe Central Bank of Ireland has informed me that its Insurance Statistics publication contains a summary of the Life Assurance and Non-Life Insurance annual returns as provided by insurers to the Central Bank. In accordance with the European Communities (Life Assurance) Framework Regulations 1994 and the European Communities (Non-Life Insurance Accounts) Regulations 1995, the Life Assurance and Non-Life Insurance annual returns are audited by a person appointed by the firm and duly qualified. The insurance returns are reviewed by the Central Bank prior to inclusion in the Insurance Statistics publication.
Separately, the annual Private Motor Insurance Statistics Report is prepared by the Central Bank, which is charged with the responsibility of continuing the statistical work initiated by the Motor Insurance Advisory Board. The primary purpose of the Report is to examine the level of accident frequency and costs and the related impact upon allocated premium differentials by driver profile. The Report is primarily based on the analysis of policy, premium and claim data. The Central Bank also advises that its Private Motor Insurance Statistics Report is based on policy level data submitted by Insurance Ireland to the Statistics Division of the Central Bank on an annual basis.
The submissions are provided annually in a raw disaggregated format, listing individual policy and claims records for all categories of cover, i.e. comprehensive, third party fire and theft and third party only. A total of twenty variables are associated with each individual record. The Central Bank performs a manual quality check of the data received (sense checking, outlier detection etc.) and follows up with Insurance Ireland on a bilateral basis regarding any queries. Additionally, the Central Bank also employs the services of an external insurance expert to independently assess the annual findings of the Report.
As I have stated previously in the House, the availability of relevant and timely data is necessary to facilitate an in-depth analysis of the insurance sector and, in particular, the factors driving the increasing cost of insurance.
The issues being examined in my Department's review of policy in the insurance sector includes the issue of data and will take into account what information is currently available and identify any shortfalls.
142. Deputy Mick Wallace asked the Minister for Finance if he will publish the legal opinion of a company (details supplied) mentioned in the KPMG progress report on the Irish Bank Resolution Corporation issued to him on 27 May 2016, which suggests that delayed recognition of losses is legal and complies with Irish company law; and if he will make a statement on the matter. [16996/16]
View answerI am informed that the legal report referenced in the question does not relate to the issues the Deputy raises in the question and so cannot be answered without further clarification. My officials have sought but have not received such clarification from the Deputy in advance of this response. I am happy to provide the Deputy with an appropriate response following clarification of the question.
143. Deputy James Browne asked the Minister for Finance the availability of agricultural relief from capital acquisitions tax, where the farming land that is the subject of the relief has an already commissioned solar farm or is wholly or partially the subject of an unexercised option in favour of a solar farm developer or the subject of a burden in the Land Registry prohibiting the alienation or transfer of the landholding without the consent of a solar farm developer; and if he will make a statement on the matter. [17073/16]
View answerI am advised by the Revenue Commissioners that gifts and inheritances of agricultural property, including land, qualify for relief (known as 'agricultural relief') from the payment of Capital Acquisitions Tax (CAT) once certain conditions are satisfied. Section 89 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for 'agricultural relief'. The relief takes the form of a 90% reduction in the taxable market value of the gifted or inherited agricultural property.
The person taking the gift or inheritance (the 'beneficiary') of the agricultural property must qualify as a 'farmer' for the purpose of section 89 CATCA 2003. This means that a beneficiary's agricultural property must comprise at least 80% by gross market value of the beneficiary's total property at a particular date. The Revenue Commissioners take the view that land on which solar panels are installed is not agricultural property for the purpose of establishing whether or not a beneficiary satisfies this '80%' test. Thus, depending on the amount of an individual's land that is actually occupied by solar panels (and not merely subject to an option over the land), the use of agricultural land for a solar farm may result in a beneficiary's failure to satisfy the '80%' test and to qualify for agricultural relief.
A condition for agricultural relief that applies in relation to gifts and inheritances taken on or after 1 January 2015 is that a beneficiary, or a lessee where the beneficiary leases the agricultural land, must actually farm the land for a period of at least 6 years after taking the gift or inheritance. It is unlikely that the ability to farm the land would be affected by the granting of an option over the land to a solar farm developer or the registration of a burden over the land with the Land Registry. However, the ability to farm the land would be affected where the option is exercised by the solar farm developer and solar panels are actually installed. As it would not generally be possible to farm any part of the land occupied by a solar farm, the change in the use of land from farming to the generation of solar energy within the required 6-year period would result in a withdrawal of some, or all, of any agricultural relief that had been granted, depending on how much of the land is diverted to this alternative use.
144. Deputy Michael Healy-Rae asked the Minister for Finance his views on the motor insurance crisis (details supplied); and if he will make a statement on the matter. [17080/16]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products. The EU framework for insurance expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. 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 those risks.
The question of the cost of insurance is a complex one involving a number of Government Departments, State Bodies and private sector organisations and while the provision and the pricing of insurance policies is a commercial matter for insurance companies, this does not preclude the Government from introducing measures that may, in the longer term, lead to a better claims environment that could facilitate a reduction in claims costs.
My Department has embarked on a review of policy in the insurance sector which is being undertaken in consultation with the Central Bank and other Departments and Agencies. The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector.
The first phase of the Review is focussed on the motor insurance compensation framework and this work is nearing completion. The next phase of the Review involves examining the factors contributing to the increasing cost of insurance and aims to identify what short-term measures can be introduced to help reduce the cost of insurance for consumers and businesses. Work on the Review of Policy in the Insurance sector will continue over the coming months.
I would also add that 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.
145. Deputy Martin Heydon asked the Minister for Finance if he will consider increases to thresholds of inheritance tax to take account of different types of family units, including those who wish to pass on family property to nieces, nephews and other family members, outside of threshold A; and if he will make a statement on the matter. [17158/16]
View answerAs with all tax areas capital acquisitions tax (CAT), including issues such rates of tax, tax-free thresholds, reliefs and exemptions, is kept under review. As part of Budget 2016 I raised the Group A tax-free threshold applying to gifts and inheritance from parents to their children from €225,000 to €280,000. This represented an increase of about 25%. I did this in recognition of the improving state of the public finances and of the concerns expressed to me by people making and receiving gifts and inheritances, particularly in a context of rising property prices.
I indicated at the time that I saw the change to the Group A tax- free threshold in the last Budget as the start of a process. The extent to which increases in the various tax-free thresholds for CAT purposes can be accommodated in the future will depend, among other things, on the continuing economic recovery and the competing choices for limited resources. The Deputy will be aware of the commitment in the Programme for a Partnership Government to work with the Oireachtas to raise the Group A CAT tax-free threshold (including all gifts and inheritances from parents to their children) to €500,000.
146. Deputy Martin Heydon asked the Minister for Finance the reason a person (details supplied) on low income is paying a higher proportion of tax; if he will review this case to ascertain additional credits are or will be available in the future; and if he will make a statement on the matter. [17228/16]
View answerI am advised by Revenue that based on the information provided to them by the person concerned, all appropriate credits have been granted to her.
In the context of an examination by them of the tax records of the person concerned, I am advised by Revenue that a surcharge for late filing of the individual s tax return for 2014 was incorrectly levied. An amended Notice of Assessment and a refund of €297.99 will issue shortly to the person concerned.
147. Deputy Brendan Griffin asked the Minister for Finance if he has considered reducing capital gains tax on the transfer of assets, including shares to children; and if he will make a statement on the matter. [17242/16]
View answerCapital gains tax applies on the disposal of assets, including where assets are transferred by way of gift, at the rate of 33% on any chargeable gains arising beyond the annual exempt amount of €1,270.
A transfer of assets can give rise to a gift tax charge in the form of capital acquisitions tax on the beneficiary of the transfer as well as a capital gains tax charge. However, capital gains tax paid in respect of such a transfer can be offset against any gift tax that is due.
Individuals may qualify for a capital gains tax relief known as retirement relief on a transfer of assets, including shares, to children in certain circumstances. In general, the relief applies to a disposal of business or farming assets that have been owned and used for such purposes for a period of 10 years prior to the disposal. In order to qualify for the relief, an individual must be aged 55 or over. The relief also applies to a disposal by an individual of all or part of the shares of a company which is a trading or farming company and the individual's family company or a member of a trading group of which the holding company is the individual's family company.
Where the disposal is to a child and the individual is aged between 55 and 65, there is no restriction on the amount of relief that is available. However, where the individual is aged 66 or over, a cap of €3 million applies in respect of the value of the assets on which relief is given.
I have no plans for further reliefs from capital gains tax on transfers of assets beyond those detailed.
148. Deputy Michael McGrath asked the Minister for Finance the number of complaints the Financial Services Ombudsman received, and the number upheld, regarding the sale of whole-of-life insurance policies in each of the years from 2012 to 2015; if he is aware of widespread concern regarding very large premium increases being demanded by insurance firms when whole-of-life policies are reviewed; if he is satisfied that consumers are adequately informed of the risks associated with taking out such policies; and if he will make a statement on the matter. [17248/16]
View answerI am informed by the Financial Services Ombudsman that the number of complaints received by the him in relation to whole-of-life policies in the years requested were as follows (the figures below include both mis-selling and policy review complaints):
|
Year |
Number |
|
2011 |
152 |
|
2012 |
218 |
|
2013 |
193 |
|
2014 |
105 |
|
2015 |
64 |
|
Total |
732 |
I am further informed by the Financial Services Ombudsman that no complaints have been upheld regarding the sale of whole-of-life insurance policies in any of the years 2012 to 2015, as all complaints received have been in relation to a sale which occurred more than 6 years prior to the date of complaint, the time limit within which complaints are required to be made.
Whole-of-life policies are plans that are designed to provide consumers with life cover for their whole life. As long as the policy holder makes regular payments and the payments are sufficient to maintain the chosen benefits, this type of cover will pay a lump sum on the death of the policy holder.
The regular payment into the plan covers the cost of providing the benefits chosen on the plan. In the early years the payments are higher than the cost of the policy holder's benefits. The extra money paid goes into the plan fund. Protection benefits get more expensive as policy holders get older; usually as the plan progresses the payments begin to equal the cost of the chosen benefits. In the later years of reviewable protection plans, the cost of the benefits increases significantly. In order to keep the level of benefits at the current level of payments, the difference is made up from the plan fund.
The insurance company carries out regular reviews to see if the policyholder's regular payment plus any fund that has been built up is enough to cover their chosen benefits for their reviewable protection plan. During a policy review, the insurance company may find that the consumer's current level of payments is not enough to maintain the level of cover that the consumer wants. The insurance company may also find that the current level of payments is not enough to maintain the level of cover desired by the consumer.
The Central Bank of Ireland's Consumer Protection Code was introduced in 2006 and revised in 2012. It requires firms to act honestly fairly and professionally in the best interest of consumers, acts with due care and diligence, and prohibits firms from misleading customers.
The Central Bank has informed me that it expects that when consumers are sold any product, including unit linked whole of life insurance, that the risks in that product are fully explained. When assessing suitability, a regulated entity must ensure that the product or service is consistent with the consumer's attitude to risk.
149. Deputy Alan Farrell asked the Minister for Finance under section 13 of the Finance (Local Property Tax) Act 2012 whereby home owners are responsible for the local property tax for their property for the whole of the subsequent year following 1 November of a given year, even if they sell the property soon after; if he will amend the legislation to modify this to make local property tax payable by persons only for the timeframe for which they have ownership of a given property; and if he will make a statement on the matter. [17253/16]
View answerI am advised by the Revenue Commissioners that in accordance with Section 13 of the Finance (Local Property Tax) Act 2012 (as amended), liability for Local Property Tax (LPT) arises where a person owns a residential property on a "liability date", which for 2014 and subsequent years is 1 November.
A definite liability date is essential to ensure certainty as to the identity of person liable for LPT in respect of a given property for a year.
Section 119 of the Act sets out the dates for payment of the Local Property Tax and clarifies that while the LPT is due by reference to a liability date it is not payable until the later date of 1 January of the following year.
Having a liability date two months prior to the payment date gives liable persons time to make the necessary provisions and to choose from the wide range of options available for paying the tax. In particular, the liable person can put the required arrangements in place to ensure that phased payments, by way of direct debit or deduction at source from employment income, occupational pension or from certain Government payments.
Where an individual sells their residential property after 1 November in any given year, provided that they owned the property on 1 November, they are liable to pay LPT on that property in respect of that liability date. It is worth noting that if such a person then buys a different property after the 1 November liability date, s/he will not incur a liability in respect of that property until the next liability date of 1 November in the following year.
I have no plans to change the legislation in this regard at this time.
150. Deputy Michael McGrath asked the Minister for Finance if his Department or the Central Bank has a record of the number of commercial loans that have been sold on by the original underwriter; the details of this record; if the Central Bank must be notified when a commercial loan has been sold on; if he has concerns that a commercial loan could be sold on to a competitor of the borrowers; and if he will make a statement on the matter. [17265/16]
View answerI have been informed by the Central Bank that it does not maintain a record of the number of commercial loans sold on by the original underwriter. Portfolio sales are considered as part of normal supervisory engagement where they are sufficiently material.
However, the Deputy will be aware that legislation and regulations have been implemented by the Oireachtas and Central Bank to protect SMEs when dealing with regulated and unregulated firms.
The Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted on 8 July 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, the Code of Conduct on Mortgage Arrears, the Code of Conduct for Business Lending to Small and Medium Enterprises and the Minimum Competency Code) issued by the Central Bank of Ireland.
Under the 2015 Act, therefore, purchasers of loan books must either be regulated by the Central Bank themselves or else the loans must be serviced by a credit servicing firm who is regulated by the Central Bank. Furthermore, it is important to highlight that the transfer of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.
Also, following a review in 2015, the Code of Conduct for Business Lending to Small and Medium Enterprises, has been strengthened in certain areas resulting in the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which comes into operation on 1 July 2016.
151. Deputy Clare Daly asked the Minister for Finance the steps the National Asset Management Agency is obliged to take should it come to its attention that a person has lobbied it regarding a transaction on behalf of a person with whom the person has a business relationship. [17284/16]
View answer152. Deputy Clare Daly asked the Minister for Finance if it is permissible for public representatives to lobby the National Asset Management Agency on behalf of persons with whom they have a business relationship without disclosing that relationship to the agency. [17285/16]
View answerI propose to take Questions Nos. 151 and 152 together.
Section 221 of the NAMA Act makes it an offence to lobby NAMA and an offence to not report such lobbying to the Garda.
The section of the Act sets out what is meant by lobbying and contains explicit provisions regarding communication with NAMA in an individual's professional capacity or in the public interest.
Section 221(5) of the NAMA Act sets out that any person who believes that he or she has been communicated with in contravention of Section 221 must report "that the communication was made, the details of the communication made, and the name of the person who communicated with him or her, to a member of the Garda Síochána". A person who fails to comply with Section 221(5) commits an offence.
In accordance with Section 221, NAMA seeks to facilitate public representatives in raising constituency-related queries directly with NAMA. In this respect NAMA operates a dedicated email address, oir@nama.ie, through which Deputies and Senators can directly communicate with it in the course of their public duty.
NAMA has no way of knowing the nature of any relationship between public representatives and their correspondents and, in that context, is obliged to treat queries from public representatives as bona fide representations. In circumstances where a public representative fails to disclose a relationship to NAMA, or is seeking to influence NAMA commercial decision-making process in order to give preferential treatment to an individual, or individuals, and to the detriment of taxpayers in general, NAMA is obliged to consider that the representative is in breach of Section 221 of the Act.
I am advised by NAMA that the Agency does not believe that any of its engagements with public representatives to date could be considered as a breach of Section 221 of the NAMA Act.
More generally, NAMA is also defined as a "public service body" under Section 7 of the Regulation of Lobbying Act 2015. This Act outlines the requirements for individuals involved in lobbying. Depending on the circumstances, individuals involved in lobbying may need to register on the Register of Lobbying website, and/or provide information to the Standards Commission about lobbying activities three times a year. The offences related to relevant contraventions are outlined in Section 20 of the Regulation of Lobbying Act.
Further information, including the definition of lobbying, is available from www.lobbying.ie.
153. Deputy Sean Fleming asked the Minister for Finance if the legislation on close company professional service surcharge (details supplied), section 441 of the Taxes Consolidation Act 1997, distorts competition; if the lack of clarity about what is and is not a professional services company may become damaging to Ireland's reputation for clear taxation policies and rules; and if he will make a statement on the matter. [17288/16]
View answerThe 12.5% rate of corporation tax applies to the relevant trading profits of all companies regardless of their size and regardless of whether they are close companies or not.
Broadly, a close company is a company that is under the control of five or fewer participators or any number of participators who are directors. A close company could be subject to a close company surcharge of 20% in respect of its undistributed estate and investment income. This would only apply to the extent that it does not distribute that income to its shareholders within 18 months of the end of the accounting period to which it relates.
A close company that is a service company, being a company engaged in professional services, could also be liable to a close company surcharge of 15% in respect of half of its undistributed trading income. Again, this would only apply to the extent that this income is not distributed to its shareholders within 18 months of the end of the accounting period to which it relates, and therefore, a surcharge can be avoided entirely by a service company if it distributes income to its shareholders. To allow a close service company to reinvest in its business, the legislation allows such a company to retain up to half of its trading income without triggering a close company surcharge on that income.
The intention behind the surcharge in section 441 of the Taxes Consolidation Act 1997 is not to distort competition but rather to discourage professional persons from channelling their activities through a controlled company so that income can accumulate without being distributed and, thereby, allowing those professional persons to avoid income tax at higher rates on such income. In the absence of the surcharge, professional persons operating through a corporate structure may enjoy a tax advantage over self-employed professionals.
For those companies for which control is spread over a larger number of participators, and which do not fall within the definition of a close company, the close company surcharges do not apply. This is because close company legislation operates by reference to objective criteria that are targeted towards circumstances where the income tax base is most likely to be at risk. It is not perceived that the same level of risk exists, that activities have been channelled through a corporate structure to avoid income tax, where a company is not closely held. This is the case for companies of all sizes, whether SMEs or larger firms, which are not closely held.
The service company surcharge applies to closely held companies that are engaged in professional services. Tax legislation does not define "profession" and the term must therefore be given its ordinary meaning, taking into account general principles of statutory construction and relevant case law. Revenue issued a Tax Briefing in June 2002 (Issue 48) which provides guidance on the activities which would fall within the definition of profession and lists a number of professions that are regarded as falling within the ambit of section 441 TCA 1997. The Tax Briefing also lists a number of activities which are not considered to be a profession.
154. Deputy James Lawless asked the Minister for Education and Skills if he will work with Bus Éireann to provide a school bus from Cluain Dara, Derrinturn, County Kildare, to Oakland secondary school in Edenderry, County Offaly; and if he will make a statement on the matter. [16849/16]
View answerUnder the terms of my Department's Post Primary School Transport Scheme children are eligible for transport where they reside not less than 4.8 kilometres from and are attending their nearest education centre as determined by my Department/Bus Éireann, having regard to ethos and language.
Bus Éireann, which operates the school transport scheme, has advised that there is a school transport service operating into the school in question and a number of children from the Cluain Dara area travelled on this service in the 2015/16 school year.
155. Deputy Clare Daly asked the Minister for Education and Skills further to Parliamentary Question No. 301 of 17 May 2016, to expedite an application by a school (details supplied) for a naíonra as a matter of urgency, given that it has submitted all the documentation. [16655/16]
View answerI wish to advise the Deputy that my Department is making arrangements to meet the school in question to discuss the matter to which she refers.
156. Deputy Pat Breen asked the Minister for Education and Skills if he will provide additional hours to a person (details supplied) under the special needs assistance scheme; and if he will make a statement on the matter. [16665/16]
View answerI wish to advise the Deputy that the National Council for Special Education (NCSE) is responsible, through its network of Special Needs Organisers (SENOs) for allocating Special Needs Assistants (SNAs) support to mainstream Primary, Post Primary and Special Schools, to assist children with special educational needs who also have additional and significant care needs. The NCSE makes such allocations in accordance with my Departments criteria for the scheme.
Circular 0030/2014, which is available on my Department's website www.education.ie, sets out my Department's policy in relation to the Special Needs Assistant (SNA) scheme. The Circular explains that SNA support is not provided to pre-school services which operate outside of the primary or special school provision, other than in early intervention classes in recognised primary schools, or special schools, where support is provided for as part of the schools total quantum of SNA support.
The vast majority of supports for childcare, including pre-school education, are provided by the Department of Children and Youth Affairs. The principal vehicle for the delivery of pre-school education is the free Pre-School Year in Early Childhood Care and Education (ECCE) programme which was introduced in January 2010 and provides for early learning in a formal setting to children in the year before they commence primary school.
Children with disabilities will now have better access to pre-school services under a new Access and Inclusion Model (AIM) programme of supports, which was recently announced, on 15th June 2016, by the Minister for Children and Youth Affairs.
AIM is a child-centred model, involving seven levels of progressive support, moving from the universal to the targeted, depending on the needs of the child and the pre-school.
The supports include: A new Inclusion Charter for the Early Years sector, alongside updated and strengthened Diversity, Equality and Inclusion Guidelines for Early Childhood Care and Education. A new higher education programme for early years practitioners (LINC) which will commence from September 2016. A new national specialist service which is based in the Better Start National Early Years Quality Development Service will provide expert advice, mentoring and support to pre-school providers from a team of 50 specialists in early years care and education for children with disabilities. A new national scheme will provide specialised equipment, appliances and minor alterations which are necessary to support a child's participation in the ECCE programme. A new national scheme will also provide additional capitation to pre-school providers where this is critical to fund extra support in the classroom and enable a child's participation in pre-school. It is estimated that only 1 to 1.5% of children in pre-school will require, and therefore be eligible for, this scheme of additional capitation.
Details of the supports which will be available under AIM can be found at www.preschoolaccess.ie which contains comprehensive information on the access and inclusion model and on how to apply for the new schemes and supports.
Questions relating to provision of such services in preschool settings should be addressed my colleague, the Minister for Children and Youth Affairs.
