Pearse Doherty
Question:206. Deputy Pearse Doherty asked the Minister for Finance to report on his meeting with EU Commissioner Vestager; and if he will make a statement on the matter. [22624/16]
View answerEU Meetings
Questions (206)
Written answers
In June 2014, the Competition Directorate of the European Commission announced its intention to open formal State Aid investigations into tax rulings provided to a number of companies in various Member States of the European Union. Since October 2015, investigations in three other Member States have concluded. In each of these cases the Commission found that the Member States granted an illegal State Aid to the companies in question.
While the Commission has opened a formal investigation in relation to one particular case involving Ireland, it has not yet made a final determination in the matter.
This a priority matter and Ireland has co-operated fully with the process to date and will continue to do so. My Department has engaged closely with the Commission throughout this process. Detailed and comprehensive responses have been provided to the Commission demonstrating that the appropriate amount of Irish tax was charged in accordance with the relevant legislation, that no selective advantage was given and that there was no State Aid.
Last week, ahead of the ECOFIN council meeting, I met with the Commissioner for Competition, Margrethe Vestager. During the course of this meeting, I underlined the Government's position that the ongoing State Aid case is unfounded, that there was no breach of State Aid rules in this case and that the legislative provisions were correctly applied.
Fiscal Policy
Questions (207)
Michael McGrath
Question:207. Deputy Michael McGrath asked the Minister for Finance the impact on the fiscal space in 2017, in particular the application of the expenditure rule of the significant revision to 2015 GDP by the Central Statistics Office; and if he will make a statement on the matter. [22627/16]
View answerWritten answers
The significant revision to 2015 GDP by the Central Statistics Office is not expected to materially change the fiscal space of just under €1 billion for 2017 set out in the Summer Economic Statement. This is because almost all the factors used to calculate the fiscal space for a particular year are fixed on the basis of the European Commission's spring forecasts in the previous year. The Commission adopts this approach to 'fixing' the inputs in order to provide ex ante clarity and certainty to Member States in relation to how their budgetary plans will be assessed.
This means that for 2017 almost all of the inputs to the expenditure benchmark calculation of fiscal space were fixed on the basis of the Commission's spring 2016 forecasts, which were published before the significant revisions to the GDP figures were made by the Central Statistics Office.
Finally, I would point out that policy will be made on the basis of more 'normal' growth rates rather than the exceptional figure for last year, which was distorted by factors which have very little relevance to actual economic developments in Ireland.
Tax Credits
Questions (208)
Michael McGrath
Question:208. Deputy Michael McGrath asked the Minister for Finance his views on the fact that his Department is not currently in a position to implement a proposal to withdraw tax credits from persons earning in excess of €70,000; if the Revenue Commissioners have undertaken work in this regard; and if he will make a statement on the matter. [22629/16]
View answerWritten answers
The withdrawal of tax credits when a person's current year earnings reach a certain threshold would require that Revenue know the person's income details on a real time basis. However, the specific details of each individual employee's income and deductions are only currently provided by employers on their annual end-year return, Form P35, which is due to be filed by mid-February following the end of the year. The up-to-date position for each taxpayer can be further complicated where an individual may have more than one employment or regularly moves from one employment to another.
I am advised by Revenue that they are actively examining the possibility of gathering employee income and payroll deduction details on a more realtime basis, as a means towards simplification of the overall tax system for both employers and employees and providing the possibility to implement 'in year' tax changes. Such a change would be significant for Revenue, employers and software providers and could only be implemented following appropriate consultation with all of the key stakeholders, and would be subject to the putting in place of the necessary legislative framework to underpin such a change.
I am advised by Revenue that the necessary research and analysis into the gathering by them of real time payroll data is under way. I look forward to receiving specific proposals in that regard in due course when the current research and analysis work has been completed.
Foreign Direct Investment
Questions (209)
Michael McGrath
Question:209. Deputy Michael McGrath asked the Minister for Finance the number of inversion transactions undertaken by multinationals in 2014 and 2015 which resulted in their relocation to Ireland; the estimated impact on GDP; the additional corporation tax revenue generated as a result of these transactions; and if he will make a statement on the matter. [22630/16]
View answerWritten answers
I am informed by the Revenue Commissioners that, as there is no requirement in Irish tax legislation for a company to notify Revenue that it has been involved in an "inversion" transaction, it is not possible to provide either the number of such transactions in 2014 and 2015 or the details of any additional corporation tax, if any, paid as a result of such transactions.
In relation to any transactions that may not involve real substance in terms of jobs and investment in the Irish economy, Ireland does not encourage such transactions. We only have and want real substantive FDI the kind that brings real jobs and investment into Ireland. My understanding is that these transactions are entirely driven by push, rather than pull, factors, i.e. tax issues in other jurisdictions rather than Ireland.
I instructed my Department to examine whether there are any targeted changes that could be made to the Irish tax regime to discourage this activity. I understand that it may be difficult to design a measure that would not infringe EU law or have potential unintended consequences for substantive Irish operations.
The US Treasury has announced a number of measures that they plan to introduce to reduce the US tax benefits of inverting from the US. The Irish Government has made clear that we would welcome any changes made by the US administration to address this problem.
Question No. 210 answered with Question No. 154.
Tax Yield
Questions (211)
Michael McGrath
Question:211. Deputy Michael McGrath asked the Minister for Finance the number of capital acquisition tax cases in each year from 2010 to 2015 by reference to the relationship of the beneficiary to the disponer; the total tax raised in each year from group A, B and C beneficiaries in tabular form; and if he will make a statement on the matter. [22632/16]
View answerWritten answers
I am advised by Revenue that the numbers of Capital Acquisition Tax (CAT) cases from 2010 to 2015 are shown in the following table by reference to relationship of the beneficiary to the disponer. This table represents the number of cases with a CAT liability and includes cases in respect of both gifts and inheritances. Where the number of cases is less than 10, the precise number cannot be given due to obligations to ensure taxpayer confidentiality.
|
Relationship |
2010* |
2011 |
2012 |
2013 |
2014 |
2015 |
|
Brother |
574 |
1,183 |
1,097 |
1,146 |
1,276 |
1,310 |
|
Child |
389 |
1,274 |
1,561 |
1,648 |
2,162 |
2,624 |
|
Child of Brother or Sister |
1,241 |
3,540 |
3,943 |
4,017 |
4,312 |
4,706 |
|
Grandchild |
260 |
308 |
297 |
332 |
431 |
581 |
|
Grandparent |
<10 |
<10 |
18 |
17 |
13 |
<10 |
|
Great-Grandchild |
<10 |
<10 |
<10 |
19 |
10 |
12 |
|
Minor Child of Deceased Child |
<10 |
<10 |
<10 |
<10 |
<10 |
<10 |
|
Parent |
33 |
56 |
93 |
61 |
110 |
129 |
|
Sister |
633 |
1,572 |
1,404 |
1,463 |
1,588 |
1,697 |
|
Stranger in Blood |
1,238 |
3,093 |
3,006 |
2,788 |
3,001 |
3,281 |
*Contains only half year information due to a changeover in Revenue systems.
I am further advised by Revenue that the following table shows the approximate tax raised in each year from Group A, B and C beneficiaries.
|
Year |
CAT raised from Threshold A €m |
CAT raised from Threshold B €m |
CAT raised from Threshold C €m |
|
2010 |
76.5 |
121.7 |
34.8 |
|
2011 |
72.7 |
124.1 |
43.8 |
|
2012 |
105.3 |
128.1 |
46.7 |
|
2013 |
107.3 |
130.6 |
39.5 |
|
2014 |
146.0 |
163.2 |
44.7 |
|
2015 |
156.1 |
183.2 |
58.9 |
Insurance Compensation Fund
Questions (212)
Michael McGrath
Question:212. Deputy Michael McGrath asked the Minister for Finance if he expects further repayments from the insurance compensation fund to the Exchequer; and if he will make a statement on the matter. [22633/16]
View answerWritten answers
The establishment of the Insurance Compensation Fund (ICF) is provided for by the Insurance Act 1964. It applies to home, motor and commercial insurance. The purpose of the ICF is to protect policy holders in the event of their insurer becoming insolvent or to allow the administrators of an insurance company to meet their financial obligations as they arise. The management and administration of the ICF is under the control of the President of the High Court acting through the Office of the Accountant of the Courts of Justice.
The Central Bank of Ireland has responsibility under Section 6 of the Insurance Act 1964, as amended, to carry out an annual assessment of the ICF to see if it needs financial support. Where the Central Bank is of the view that the state of the ICF is such that financial support should be provided for it, it is allowed to determine an appropriate contribution to be paid to the ICF by each insurer. This is calculated as a percentage determined by the Central Bank, not exceeding 2 per cent of the aggregate of the gross premiums paid to the insurer or insurer authorised in another Member State in respect of policies issued in respect of risks in Ireland. If the Central Bank envisages a deficit may exist in the fund at any time in the calendar year after the contributions received from each insurer, it may recommend to me, as Minister for Finance, to advance funds to the ICF from the central fund. This advance would be a loan and must be repaid to the Exchequer, with interest.
At present, the balance owed to the Exchequer by the ICF is €812.3m. Since approximately €65-70m is collected each year under the 2% levy, it will take several years for the ICF to collect and repay the amount owed.
It should be noted that included in the estimate for capital resources for 2016 is a receipt of €50 million from the Insurance Compensation Fund (ICF) to the Exchequer. The estimate of Exchequer receipts from the ICF during 2016 was updated to €100 million as part of the preparation of the fiscal forecast contained in the Stability Programme Update. The estimate of €100 million is made up of 2 receipts of €50 million each, the first expected during the third quarter of this year and the second receipt expected close to the year end.
Estimates of future Exchequer receipts from the ICF may be revised again, pending an updated forecast of the cash requirements of the ICF, as part of the Budget 2017 fiscal forecast.
Insurance Industry
Questions (213)
Michael McGrath
Question:213. Deputy Michael McGrath asked the Minister for Finance the position regarding the payment of claims due by a company (details supplied); the level of payments that are expected to be made; the approximate timeframe for this matter to be dealt with; and if he will make a statement on the matter. [22634/16]
View answerWritten answers
The liquidation of an insurance company is a legally complex process. Setanta is a Maltese incorporated company and, therefore, the Setanta liquidation is being carried out under Maltese law.
Progress in the liquidation of Setanta Insurance has been awaiting the outcome of legal proceedings in the case of the Law Society of Ireland versus the Motor Insurers' Bureau of Ireland (MIBI). On 4th September 2015, the High Court held that the MIBI is liable in respect of claims against the policy holders of Setanta. This decision was appealed by the MIBI and the Court of Appeal upheld the High Court Decision. The MIBI has been granted leave to appeal the decision to the Supreme Court. As this case is sub judice, there are certain matters which I am not in a position to comment on at this time.
However, the Liquidator for Setanta has informed me that:
- The number of open claims was 1,678 as at 31st May 2016.
- The claims reserves position stands at between €87.7 million and €95.2 million.
- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal.
- Final settlements can only be paid out after all of the company's liabilities are quantified, including claims.
- The Liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims.
I expect to be able to provide a more accurate update after the legal proceedings are concluded.
Insurance Levy
Questions (214)
Michael McGrath
Question:214. Deputy Michael McGrath asked the Minister for Finance the amount raised from the 3% stamp duty and 2% levy, respectively, on insurance policies in each of the years from 2010 to 2015 in tabular form; and if he will make a statement on the matter. [22635/16]
View answerWritten answers
I am informed by Revenue that the following table sets out the total amounts collected in respect of non-life insurance levy for the years requested by the Deputy.
Section 125 of the Stamp Duties Consolidation Act imposes a levy of 3% on the gross amount received by an insurer in respect of certain non-life insurance premiums. The exceptions are re-insurance, voluntary health insurance, marine, aviation and transit insurance, export credit insurance and certain dental insurance contracts. The 3% levy applies to premiums received on or after 1 June 2009 in respect of offers of insurance or notices of renewal of insurance issued by an insurer on or after 8 April 2009. In relation to notices of renewal or offers of insurance issued prior to 8 April 2009, a 2% levy applies. The amounts collected at the 3 per cent rate are not separately identifiable from those collected at the 2 per cent rate.
|
- |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
|
€m |
€m |
€m |
€m |
€m |
€m |
|
|
Non-Life Insurance Levy |
109.5 |
106.4 |
104.2 |
98.7 |
103.4 |
108.0 |
Fiscal Policy
Questions (215, 216, 217)
Maurice Quinlivan
Question:215. Deputy Maurice Quinlivan asked the Minister for Finance if he will seek a derogation from the European Commission to borrow €1 billion outside the fiscal rules for the purpose of social housing, as recently requested by IBEC in its 2017 budget proposals; and if he will make a statement on the matter. [22657/16]
View answerMaurice Quinlivan
Question:216. Deputy Maurice Quinlivan asked the Minister for Finance the criteria for and availability of a derogation from the European Commission to borrow outside the fiscal rules for the purpose of social housing; and if he will make a statement on the matter. [22658/16]
View answerMaurice Quinlivan
Question:217. Deputy Maurice Quinlivan asked the Minister for Finance his views on the recent joint statement on Brexit, in which President Hollande, Chancellor Merkel and Prime Minister Renzi noted that Europe must strengthen areas where both economic and social priorities overlap (details supplied); if he will seek a derogation from the European Commission to borrow €1 billion outside of the fiscal rules for the purpose of social housing; and if he will make a statement on the matter. [22660/16]
View answerWritten answers
I propose to take Questions Nos. 215 to 217, inclusive, together.
I have noted the proposals from IBEC as well as the comments by President Hollande, Chancellor Merkel and Prime Minister Renzi.
The fiscal rules - formally known as the Stability and Growth Pact (SGP) - have direct application through a number of EU regulations. Changes to these regulations would have to follow the normal EU approach starting with a proposal from the Commission before consideration by Member States and the European Parliament. There is no facility under the Stability and Growth Pact to allow for a derogation to borrow outside the fiscal rules.
Having said that, it is important to note that there are existing provisions in the fiscal rules that are designed to promote public investment. For instance, within the expenditure benchmark pillar of the rules, public investment is granted favourable treatment - as a result of four-year capital smoothing, only one quarter of the increase in public investment must be funded in the first year from within the fiscal space. This provision means capital spending for housing and other purposes can be leveraged within the EU rules.
Moreover, in line with the European Commission approach, the Government adopted a slightly less stringent medium-term budgetary objective (MTO) of a structural deficit amounting to 0.5 per cent of GDP in the Summer Economic Statement (SES) which was published in June. As I have already communicated, this policy initiative will result in an additional €1½ billion in fiscal space becoming available under the EU rules once the MTO is reached. Taking account of this development and capital smoothing we will, as set out in the SES, be bringing forward proposals for an additional cumulative €4 billion in capital formation over the period 2017 - 2021.
It should also be noted that the fiscal rules provide for certain flexibilities, particularly with a view to encouraging public investment. Specifically the rules allow for temporary deviations from the required structural budgetary adjustment if spending on capital investment can be shown to qualify for either the investment clause or the structural reform clause. Both of these provisions are subject to strict conditions; and while Ireland has not yet been in a position to apply given where we are in the business cycle, the situation is kept under constant review.
I would point out that we are continually exploring how permitted flexibility within the existing framework can be optimised as well as seeking to improve the implementation of the SGP. For instance, a number of proposals from Ireland to improve the application of the fiscal rules were adopted by the Commission last year.
Finally, I wish to assure the Deputy that ending the Housing shortage and Homelessness is a priority for this Government. In this context, the Minister for Housing, Planning and Local Government will shortly set out the new Government Action Plan for Housing.
Tax Code
Questions (218, 219)
Peter Fitzpatrick
Question:218. Deputy Peter Fitzpatrick asked the Minister for Finance further to the commitment in the summer economic statement to increase taxation on measures that promote healthier lifestyles, the measures that are under consideration in this regard; the timeline for their introduction; the data that is being used to support these new taxation measures; and if he will make a statement on the matter. [22688/16]
View answerPeter Fitzpatrick
Question:219. Deputy Peter Fitzpatrick asked the Minister for Finance further to the commitment in the summer economic statement and previous statements from Government regarding the proposed introduction of a sugar tax or levy, his plans to organise this, in parallel with the proposed introduction of same in the UK; if there will be a formal consultation process with the appropriate industry representatives as in the UK; the timeline for its introduction; and if he will make a statement on the matter. [22689/16]
View answerWritten answers
I propose to take Questions Nos. 218 and 219 together.
The Programme for Partnership Government commits to a number of taxation measures which promote healthier lifestyles.
The PfPG commits to making Ireland tobacco free (less than 5% of population smoking) by 2025. The Government is committed to increasing excise duty on tobacco in successive budgets as one policy measure amongst multiple other public health interventions in order to achieve this goal. Ireland has increased tobacco products taxation in 20 of the past 24 budgets, and data from the National Tobacco Control office of the Health Service Executive shows that smoking prevalence amongst the general population has fallen from 28.3% in June 2003 to 19.2% in 2015.
The PfPG also commits to the introduction of a tax on sugar-sweetened drinks (SSDs). The tax will contribute towards important public health goals, as well providing a new source of revenue for public spending and decreases in personal income taxation. The tax on sugar-sweetened drinks has been proposed by the Department of Health in order to reduce added sugar in diets, particularly the diets of children and young people, and comprises one measure in a comprehensive Department of Health plan to tackle obesity in Ireland, which is due to be published this year. Sugar-sweetened drinks taxes have been introduced in a number of European countries in recent years, with the UK due to introduce a soft-drinks industry levy from 2018. The design and implementation of the tax is a matter for the budgetary process.
Stakeholders who have called for a SSD tax include the Irish Heart Foundation, Social Justice Ireland, the Irish Medical Organisation, the Royal College of Physicians Ireland, the Irish Congress of Trade Unions and the HRB Centre for Health and Diet Research.
Ministerial Staff
Questions (220)
Seán Sherlock
Question:220. Deputy Sean Sherlock asked the Minister for Finance the number of politically appointed staff working in his Department, including the names, roles and salaries of each staff member; in the case of special advisers, their qualifications and experience relevant to their roles; and if he will make a statement on the matter. [22732/16]
View answerWritten answers
I wish to advise the Deputy that the number of political staff in my Department is four. In the following table the Deputy will find a list of their roles and annual salaries.
|
Role: |
Salary: |
|
Special Advisor |
€87,258 |
|
Personal Assistant |
€54,490 |
|
Civilian Driver |
€32,965.71 |
|
Civilian Driver |
€32,965.71 |
My special adviser has over 28 years' professional experience in advising me on political matters in the various roles I occupied over this period, including as special adviser in the Department of Health. Most recently this person acted as special adviser during my term as Minister for Finance from 2011 onwards and is now being reappointed to that role.
The Deputy should also note that I have appointed a second person who is a Principal Officer in this Department and has been assigned as Special Adviser to me.
Question No. 221 answered with Question No. 170.
Corporate Tax Compliance
Questions (222)
Joan Burton
Question:222. Deputy Joan Burton asked the Minister for Finance if he is aware of the use of charitable tax status for the purpose of corporate tax avoidance; the way this can happen; the number of such schemes which exist; the cost to the Exchequer of such schemes; and if he will make a statement on the matter. [22747/16]
View answerWritten answers
I am advised by the Revenue Commissioners (Revenue) that they constantly review the affairs of taxpayers for both tax evasion and tax avoidance. In particular Revenue uses analytical tools and strategies to detect and combat taxpayers using tax avoidance schemes.
Revenue is currently reviewing a small number of structures involving charitable trusts which may have been put in place for tax avoidance purposes. These structures will be challenged if it is deemed to be appropriate.
Because of the small number of structures under review, Revenue is precluded, by taxpayer confidentiality, from providing any specific details.
Real Estate Investment Trusts
Questions (223)
Joan Burton
Question:223. Deputy Joan Burton asked the Minister for Finance the number of real estate investment trusts which exist since their introduction; the cost to the Exchequer in tax foregone or other tax advantages conferred on such trusts or schemes; and if he will make a statement on the matter. [22748/16]
View answerWritten answers
I am informed by the Revenue Commissioners that there are currently three Real Estate Investment Trusts (REIT) established and operating in Ireland.
Section 41 of the first Finance Act of 2013 introduced the regime for the REIT. A REIT is a collective investment vehicle designed to hold properties in a tax neutral manner. The function of the REIT framework is not to provide an overall tax exemption, but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply to property investment via a corporate vehicle. As such, the estimated cost attached to REITs relates not to tax foregone, but rather to the move from direct taxation of rental income in the hands of investors, to the taxation of dividends distributed to investors from REIT profits arising from that rental income. A REIT is exempt from any tax on its qualifying income and gains from rental property, however, the REIT is obliged to distribute 85% of its profits to shareholders.
The overarching objective of the REIT regime is to remove a tax bias - caused by the double layer of taxation - which typically discourages risk-diversified collective investment in property through a company.
Household Charge Administration
Questions (224)
Michael Healy-Rae
Question:224. Deputy Michael Healy-Rae asked the Minister for Finance his views on correspondence (details supplied) regarding the household charge; and if he will make a statement on the matter. [22874/16]
View answerWritten answers
Section 156 of the Finance (Local Property Tax) Act 2012 converted any arrears of Household Charge (HHC) that were still outstanding on 1 July 2013 to a Local Property Tax (LPT) liability of €200 per property, and made Revenue responsible for collecting the increased amounts. Prior to 1 July 2013, collection of the original €100 HHC was the responsibility of the Local Government Management Agency (LGMA) on behalf of the Local Authorities.
As part of the handover of responsibility, Revenue received the HHC database from the LGMA and carried out a comprehensive data matching exercise with its own LPT Property Register. The data matching exercise produced a list of properties in respect of which the HHC did not appear to be paid. The property in question was included on this list.
As part of a comprehensive communications strategy around HHC Revenue very clearly stated that it could not be absolutely certain that the list was fully accurate due to the format of the information held on the LGMA database, for example, capturing the details of the person that physically paid the bill rather than the liable person and not capturing data in respect of exemptions/waivers. Revenue also advised that where property owners received a payment demand and were of the opinion that the charge was not correctly due they should contact the LGMA or their local authority to clarify the issue.
In regard to the property in question, Revenue accepts that the property owner made every effort to pay the original HHC liability of €100 to his Local Authority. On that basis Revenue will accept a payment of €100 as full settlement of the outstanding charge. A member of the LPT team will make direct contact with the person in the coming days to confirm the arrangement and complete the transaction.
Finally, Revenue is not in a position to explain the failure to cash the cheque as it was submitted by the person to the Local Authority in 2012 prior to Revenue assuming responsibility for HHC.