Written Answers Nos 158-172
158. Deputy Michael McGrath asked the Minister for Finance if insurance companies currently passporting into Ireland from the UK and its jurisdictions have the ability to continue passporting into Ireland if the UK exited EIOPA when the UK exits the European Union, if the UK and its jurisdictions automatically exit the European Insurance and Occupational Pensions Authority, EIOPA; and if he will make a statement on the matter. [11580/17]
View answerThe ability for financial services entities such as insurance companies or investment firms to passport financial services is based on a collection of measures in EU law that describes how the EU fundamental freedoms operate in the context of financial services. Once a financial services entity is authorised in one European Economic Area (EEA) Member State the financial services passport allows that firm to carry out its authorised permitted activities in any other EEA state. This is achieved by either exercising the right of establishment such as setting up a branch, or by providing cross-border services. The option of a passport is only open to EEA Member States due to the fact that these countries are subject to EU rules.
The ability of the UK and its jurisdiction's regulatory authorities' to participate in the European Insurance and Occupational Pensions Authority (EIOPA) and the ability for UK insurance companies to continue to passport financial services as described above will therefore depend on the outcome of the forthcoming negotiations. These negotiations will commence once the UK notifies the European Union of its intention to leave through the activation of Article 50 of the TFEU. At that point, we will be at the start of a process, within which there is expected to be a number of phases. Ireland will participate fully in all of the structures of the EU 27 in preparing for and conducting the negotiations. Ireland will continue working with both our EU partners and with the UK to maintain a positive, constructive and orderly approach to these negotiations. In my view, it would not be appropriate at this stage to try to pre-empt the outcome of those negotiations.
163. Deputy Eamon Ryan asked the Minister for Finance if he has considered extending similar tax treatment to persons that are renting out rooms in a house they are living in through a company (details supplied), as distinct to renting out an entire home, to persons that rent out rooms for students; and if he will make a statement on the matter. [11780/17]
View answerIt is not fully clear from the Deputy's question as to the specific aspect of the tax code that his enquiry relates to. However, I assume that the Deputy is referring to the Rent-a-Room scheme, which is provided for in Section 216A Taxes Consolidation Act 1997. This scheme was introduced with the aim of increasing the availability of rented residential accommodation. The room or rooms must be used for the purposes of residential accommodation, i.e. the occupants are effectively using the room on a long-term basis, either on its own or in conjunction with other parts of the residence, as a home. The relief does not apply to rooms that are used for business purposes.
Under the scheme, sums arising to an individual in respect of the letting, for residential purposes, of a room or rooms in his or her home, including, for example, sums arising from lettings to students for an academic year, and the provision of meals or other services supplied in connection with the letting, may be exempt from income tax where they meet the conditions of the scheme and where the individual's total gross income from such letting(s) is below the annual limit for the tax year in question. This limit was increased to €14,000 with effect from the 2017 tax year.
Income from the provision of accommodation to occasional visitors for short periods, including, for example, where the accommodation is provided through online accommodation booking sites, does not qualify for relief as the visitors use the accommodation as guest accommodation rather than for residential purposes. The tax treatment of such income is dependent on the nature of the accommodation irrespective of whether or not this is arranged through an internet letting platform or other form of intermediary.
I am not favourably disposed to the extension of rent-a-room relief to income earned from the provision of accommodation through platforms such as the company in question, I am mindful such an extension could lead to unfair competition in the guest accommodation sector generally, by placing B&B and guest house operators who provide accommodation in the course of a trade at an unfair disadvantage.
164. Deputy Eamon Ryan asked the Minister for Finance the total tax take from residential property landlords derived from their rental income; and the total value of the residential property rental market here. [11781/17]
View answerI am advised by the Revenue Commissioners that tax returns up to the 2015 year of assessment did not require rental income to be returned in a manner that would enable income from residential property lettings be separately identified from rental income in respect of other types of property, such as commercial rental property. It is not therefore possible to provide the amount of revenue raised from the taxation of residential rental income, nor the total value of such income.
However, the Deputy may wish to note that the 2013 Report of the Comptroller and Auditor General contained, in Chapter 16, a detailed review of the taxation of rental income and expenses deductible therefrom. This report is available on the website of the Comptroller and Auditor General at the link below.
http://audgen.gov.ie/documents/annualreports/2013/report/en/Chap16.pdf
The Deputy may also wish to note that tax returns for the 2016 year of assessment onwards have separate data fields for residential property rental income and non-residential property rental income. The relevant information will become available in due course.
165. Deputy Catherine Murphy asked the Minister for Finance further to Parliamentary Question No. 55 of 28 February 2017, the reason his Department acted as a guarantor for a bank (details supplied) regarding the €10 billion facility deed from the Central Bank; the purpose and or intended use of the €10 billion facility deed, in view of his Department's involvement; and if he will make a statement on the matter. [11858/17]
View answerDuring the latter half of 2010, Irish banks were encountering difficulties in sourcing funding. In order to allay these difficulties, the Central Bank of Ireland entered into facility deed agreements with a number of banks, including Bank of Ireland. Under these agreements, the Central Bank of Ireland could make loans to a relevant bank, by way of emergency liquidity assistance, which would be guaranteed by the Minister. The bank, in turn, agreed to indemnify the Minister against any payment the Minister made in relation to the guarantee. When the agreement between the Central Bank of Ireland and Bank of Ireland was put in place, it was the policy of the Government at that time that the Central Bank of Ireland should not incur a loss in the provision of emergency liquidity assistance in support of the banks.
166. Deputy Shane Cassells asked the Minister for Finance the progress of his plan, which he announced as part of his 2017 budget speech, to extend mortgage interest relief; and if he will make a statement on the matter. [11860/17]
View answerAt present, Section 244 of the Taxes Consolidation Act 1997 provides for tax relief in respect of interest paid on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, with relief being available until 31 December 2017. Mortgage interest relief has been abolished for homes purchased since 1 January 2013.
In the Programme for a Partnership Government a commitment was given to retain mortgage interest relief (MIR) beyond the current end date on a tapered basis. As legislation currently provides for the relief to continue until the end of December 2017, it was not necessary to include legislation in Finance Act 2016 to provide for the tapered extension of the relief. However in my Budget speech last October I confirmed my intention to extend MIR beyond the current end date on a tapered basis to 2020. The purpose of the tapered extension proposal is to avoid a sudden significant increase in mortgage repayments for those losing the relief, but instead to withdraw the relief gradually, allowing the mortgage holder time to adjust to the change in mortgage repayments.
Final decisions in relation to the tapered extension of the relief will be considered in the context of my deliberations for Budget 2018, which is scheduled to be announced in October.
A review of policy considerations and potential costs relevant to the extension of MIR was contained in the Income Tax Reform Plan published by my Department in July last year and may be of interest to you. The plan is available at:
http://www.finance.gov.ie/sites/default/files/Income%20Tax%20Reform%20Plan-FINAL_0.pdf.
167. Deputy Michael McGrath asked the Minister for Finance the amount of VAT collected in 2015 and 2016 by the Revenue Commissioners from a retail service (details supplied). [11867/17]
View answerI am informed by Revenue that it is not possible to furnish figures on the amount of VAT from a specific retail service such as barber shops. Information provided to Revenue on a VAT return does not require the yield from individual products or activities to be identified.
168. Deputy Noel Rock asked the Minister for Finance his views on the European Commission's report on the economy, which highlighted the State's dependence on corporate tax revenue as a concern; and if he will make a statement on the matter. [11877/17]
View answerIn 2016, Exchequer corporation tax receipts of €7,351 million represented an important revenue source, accounting for just under 15.5 per cent of all Exchequer tax receipts. However, by way of context, it is important to point out that income tax and VAT accounted for around two-thirds of the total tax yield last year. Furthermore, it should be noted that corporation tax as share of all Exchequer tax revenues in 2016 is in-line with previous parameters. For example, throughout the first half of the last decade, corporation tax receipts varied in a range between 14-16.5 per cent as a share of all Exchequer tax revenues.
My Department and the Revenue Commissioners have highlighted on many occasions that corporation tax is highly concentrated in Ireland, with approximately 80 per cent of receipts received from the multinational sector. In addition, in 2016, it is estimated that the top ten tax paying companies accounted for around 37 per cent of the total corporation tax receipts, down slightly from an estimated 41% in 2015. It is for these reasons that a potential concentration risk in corporation tax receipts, was acknowledged and highlighted in the Budget 2017 document.
In terms of the sustainability of the corporation tax receipts, following the 'level shift' in 2015, these receipts increased by a more modest 7 per cent in 2016. For 2017, the corporation tax forecast produced by my Department with assistance from the Revenue Commissioners is prudent. Overall growth of 5.0 per cent in corporation tax is projected for 2017, which is comfortably below the year-on-year growth recorded in 2016.
Finally, to sustain the hard won improvements in our public finances, we must guard against complacency and maintain our prudent management of the public finances in order to provide a sustainable budgetary platform upon which funding for the provision of public services can be provided for the years ahead. Accordingly, we are committed to complying with the fiscal rules, which are designed to ensure that increases in public expenditure are sustainably financed and decoupled from dependence on cyclical or windfall revenues.
169. Deputy Paul Kehoe asked the Minister for Finance if a UK citizen living in the UK and purchasing a property here is required to have an Irish bank account as part of any requirements; and if he will make a statement on the matter. [11884/17]
View answerI am advised by the Central Bank that neither the Central Bank's Consumer Protection Code 2012 nor the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 include a requirement that a citizen from another EU Member State purchasing a property in Ireland must hold an Irish bank account. Nevertheless, it could also be noted that the Regulations provide that a lender may request a consumer borrower to open or maintain a payment or savings account where the only purpose of such an account is to accumulate capital to repay the credit, to service the credit, to pool resources to obtain the credit or to provide additional security for the creditor in the event of default (Regulation 13).
Subject to compliance with relevant legal and regulatory requirements, it is however important to note that it is a matter for Central Bank regulated lending institutions to set their own commercial and other mortgage lending policies.
170. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question Nos. 130 and 156 of 14 February 2017, if he will make provision for refunds to be issued to persons outside of the four-year rule in the event that the Court of Appeal upholds the High Court decision in respect of the deductibility of the NPPR against rental profits; and if he will make a statement on the matter. [11924/17]
View answerI am advised by the Revenue Commissioners that the applicable provision giving a right to repayment of tax is section 865 of the Taxes Consolidation Act (TCA) 1997, where a person has paid an amount of tax which is not due. However, as I advised in my response to PQ numbers 130 and 156 of 14 February 2017, section 865(4) provides that that right is subject to a statutory limit of four years from the end of the chargeable period to which the claim relates. That statutory limit is binding on Revenue as well as on the taxpayer. Decisions of the Tax Appeals Commission in differing appellant circumstances published recently have confirmed that there is no discretion in the application of the four-year rule for claiming repayments.
Section 865 of the TCA was introduced in 2003 and provides a statutory general right to repayment of tax as well as payment of interest, subject to a four year time limit. It provides that no repayment may be made based on claims submitted more than four years after the end of the period to which they relate. Prior to that there was no statutory right to repayment, though a taxpayer could sue for repayment under common law. The Minister at the time indicated that, in introducing the new arrangements, he was satisfied that they achieved the necessary balance between establishing a fair and uniform system for taxpayers while providing necessary protection for the Exchequer.
At the same time, the general right of the Revenue Commissioners to raise assessments or make enquiries as respects taxpayer returns was also reduced to four years though in certain circumstances, for example where fraud or neglect is suspected, or in the context of the application of general anti-avoidance rules, Revenue's right to enquire or raise assessments is not time limited. Previously, the general time limit on the raising of assessments by Revenue had been ten years. The convergence of these various time limits on four years creates parity between a taxpayer's right to repayment and Revenue's powers to raise assessments.
I am further advised by Revenue that any repayment claims made in relation to the deduction of Non Principal Private Residence charges against rental profits that are received within the statutory time limits, as they apply to each year of assessment, will be retained and processed when the outcome of the Appeal case is known. Revenue also advises that they are developing a simple, easy to use process to facilitate taxpayers who may wish to lodge a claim in relation to this matter and that this will be available in the very near future.
171. Deputy Dara Calleary asked the Minister for Finance the final findings of the Revenue Commissioners' investigations into the incidences of petrol stretching that occurred across County Mayo in 2014; and if he will make a statement on the matter. [11955/17]
View answerI am advised by Revenue that their investigations into the incidences of petrol stretching that occurred in Co. Mayo in 2014 revealed that there was no evidence of any excise offences in that county.
Despite extensive testing, evidence of the presence of prohibited stretching agents was found in only two samples, both from one location outside Co Mayo. These two prosecution cases were heard at Dundalk District Court on 3 March 2016. The defendant, who pleaded guilty, was fined €5,000 mitigated to €2,500.
Revenue will take swift and robust action and pursue prosecution against alleged offenders where possible. Revenue works closely with An Garda Síochána on such matters where appropriate.
172. Deputy Michael McGrath asked the Minister for Finance if he has initiated the process of carrying out an independent impact assessment on the help-to-buy scheme introduced as part of budget 2017; if this will involve assessing the impact of the scheme on the price of new homes, new housing supply and on the property market generally; and if he will make a statement on the matter. [12027/17]
View answerThe Deputy will be aware that I agreed during the Committee Stage debate on the relevant section of Finance Bill 2016, to commission an independent impact assessment on the effects of the Help to Buy incentive on the supply of new homes, house prices, and the residential property market generally, for completion prior to Budget 2018.
My officials have drafted and issued a Request for Tender (RFT) for the production of an assessment of the Help to Buy tax incentive scheme by an independent body/expert. The request for tender stipulates that the study should assess whether the policy objectives on the supply of new homes are being met, what impact (if any) the scheme is having on new and second-hand house prices, and what impact the scheme is having generally on the residential property market. The RFT has been advertised on the Office of Government Procurement eTenders website at http://www.etenders.gov.ie.
The output of this assessment will be a written report to be completed and submitted to me by 31 August 2017.
