Written Answers Nos. 86-105
86. Deputy Joan Burton asked the Minister for Finance his plans to take advantage of the current historically low interest rates to redeem national debt taken out at the height of the debt crisis and to replace it with new borrowing at a lower rate to make a saving for the Exchequer; and if he will make a statement on the matter. [38624/17]
View answerWhile it may appear attractive to replace debt that was issued at a higher borrowing cost than the cost that applies to debt issued today, the reality is more complex and less attractive. When bond yields fall, the market value of debt issued at higher rates goes up. This means it would cost the NTMA more to buy that debt from the investors who hold it than the NTMA originally borrowed. Put simply, a holder of a bond that is paying an annual coupon of 5%, for example, will not exchange that bond for a lower coupon without charging a significant premium.
That said, the NTMA has taken steps to significantly reduce the refinancing requirement in the coming years and to reduce the debt service burden.
On 7 September I announced plans to repay early and in full the remaining IMF loan - which has an outstanding balance of circa €4.5 billion – as well the bilateral loans from Denmark and Sweden – which have a combined outstanding balance of €1 billion.
This follows early repayments to the IMF of just over €18 billion between December 2014 and March 2015 and means the full €22.5 billion loan from the IMF, as well as the €1 billion in loans from Denmark and Sweden, will have been repaid ahead of schedule.
The NTMA continues to pre-fund ahead of future obligations and to build up significant cash and liquid asset balances. These balances stood at €20 billion at end August and can be used to fund future debt redemptions such as next month’s €6.2 billion bond redemption.
The NTMA has also executed bilateral bond switches involving redeeming early shorter-term bonds in exchange for longer-term bonds, which reduced the 2018-2020 bond refinancing requirement by some €3 billion.
This year the Exchequer interest bill is expected to drop below €6.2 billion as against €7.5 billion as recently as 2014.
Finally, I would also add that through the buy-back of the Floating Rate Notes disposed of by the Central Bank of Ireland, the NTMA is locking in the current low market interest rates and is, in effect, taking out further insurance against rates rising into the future.
87. Deputy Thomas P. Broughan asked the Minister for Finance the cost of a group's (details supplied) review of the help-to-buy scheme; and if he will make a statement on the matter. [38655/17]
View answerThe group to which the Deputy refers was awarded the contract for the review of the Help to Buy initiative following a competitive tender process conducted in accordance with the relevant procedures.
The precise final amount payable upon the satisfactory completion of the review is dependent on allowable additional costs, if any, and so is not yet known. However, I can confirm to the Deputy that the base contract amount agreed with the contractor is consistent with the anticipated cost estimate, set out in paragraph 1.6 of the Request For Tenders document already published by my Department which was "some €50,000 (excl. VAT)".
The final amount paid to the contractor will be published in due course.
88. Deputy Brendan Howlin asked the Minister for Finance the estimated yield from a 1% levy on online digital advertising to be charged on advertising carried on an Internet or mobile platform here; and if he will make a statement on the matter. [36792/17]
View answerMatters pertaining to digital advertising would in the first instance be for my colleague, the Minister for Communications, Climate Change and Environment.
This Department has no basis on which to cost the levy proposed by the Deputy.
89. Deputy Ruth Coppinger asked the Minister for Finance the estimated cost in 2018 of abolishing the local property tax for principal private residences. [36816/17]
View answer90. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised in 2018 by doubling the local property tax on second and subsequent properties. [36817/17]
View answer93. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised in 2018 by doubling the local property tax on second properties and tripling it on third and subsequent properties. [36820/17]
View answerI propose to take Questions Nos. 89, 90 and 93 together.
I am informed by Revenue that the estimated amount that could be raised in 2018 by doubling the Local Property Tax (LPT) on second and subsequent properties would be in the region of €110m.
Were the rate on third and subsequent properties tripled, I am informed by Revenue that an estimated additional €35m could be raised compared to the scenario where rate was doubled for such properties.
In relation to Question 38616/17, I am informed by Revenue the estimated cost in 2018 of abolishing LPT for principal private residences is in the region of €375m.
91. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised in 2018 by introducing a levy on residential properties empty for more than six months of €200 per month. [36818/17]
View answer92. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised in 2018 by introducing a levy on second and subsequent non-principal private residential properties empty for more than six months of €200 per month. [36819/17]
View answer96. Deputy Ruth Coppinger asked the Minister for Finance the estimated annual revenue that could be raised from a tax on residential properties vacant for over one year of 3%, 6%, 10% and 20% respectively. [36824/17]
View answer97. Deputy Ruth Coppinger asked the Minister for Finance the estimated annual revenue that could be raised from a tax on second and subsequent residential properties vacant for over six months of 3%, 6%, 10% and 20% respectively. [36825/17]
View answerI propose to take Questions Nos. 91, 92, 96 and 97 together.
I am informed that no distinction is made in the Tax Code between vacant and occupied properties. It is not possible therefore to derive estimates from Revenue statistics in relation to the Deputy's questions.
94. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised annually by abolishing tax reliefs for real estate investment trusts. [36821/17]
View answer95. Deputy Ruth Coppinger asked the Minister for Finance the annual cost of all tax reliefs for real estate investment trusts. [36822/17]
View answerI propose to take Questions Nos. 94 and 95 together.
Real Estate Investment Trusts (REITs) are collective investment vehicles designed to hold rental investment properties in a tax neutral manner. They are focused on long-term holding of income-producing property as opposed to short term speculative gains.
The function of the REIT framework is not to provide an overall tax exemption, but rather to facilitate collective investment in rental property by providing the same after-tax returns to investors as direct investment in rental property and removing a double layer of taxation at corporate and shareholder level which would otherwise apply.
In general, trading profits of Irish companies are subject to Corporation Tax (CT) at the rate of 12.5% and rental profits are subject to CT at 25%. In contrast, rental profits arising in a REIT are exempt from CT, provided the REIT distributes at least 85% of its property income each year. While most property disposals by a REIT will not give rise to Capital Gains Tax (CGT), where a REIT disposes of a newly developed property within 3 years of completion of the development, CGT will arise. Other profits earned by the REIT are subject to CT in the normal way.
Dividend Withholding Tax (DWT) at 20% is levied upon distributions by a REIT. An Irish resident individual can claim a credit for this DWT against his or her income tax liabilities while a non-resident investor may be able to claim a full or partial refund of DWT under a double tax agreement. Pension schemes, life assurance companies, charities or NAMA may receive distribution gross subject to the completion of valid declaration.
As such, the estimated cost attached to the REIT relates not to an exemption from tax, but rather to the move from direct taxation of rental income to the taxation of dividends distributed from REIT profits arising from that rental income. The extent of any net tax cost of the REIT exemptions will therefore be the difference between the tax which would have arisen on the property income in non-REIT ownership, and the tax charged on the dividends paid out of that property income by the REIT to their investors.
Any potential loss of tax relating to foreign investors is due to the difference between how company dividends are taxed in the hands of foreign investors compared to how profits from direct ownership of property are taxed. Ireland, in line with most countries, retains the right to tax profits arising from land and buildings in the State, regardless of where the owner is located. In contrast, taxing rights for dividends are usually divided between countries, based on tax treaty agreements. In general, Ireland allows for dividends of Irish companies to be paid to shareholders resident in treaty partner countries without any liability to Irish tax. This is because tax should already have been paid on the company's profits in Ireland the dividends are paid out of the after-tax profits of the company and the dividends received will form part of the shareholder's income for tax purposes in their country of residence.
In the absence of any other provisions, foreign REIT shareholders would not have had any liability to Irish tax on REIT dividends, despite the fact that the REIT itself benefits from a tax exemption on qualifying profits of the rental business. In order to ensure that tax from foreign investors is retained, a Dividend Withholding Tax (DWT) at the standard rate of tax (currently 20%) was legislated for to specifically apply to REIT dividends. Foreign investors from treaty resident countries may be able to reclaim some part of this DWT if the relevant tax treaty allows for this. The taxation of dividends varies from treaty to treaty, but commonly a source State would retain the right to approximately 15% tax on dividends paid from that State.
I am informed by Revenue that their obligation to observe confidentiality for taxpayer information, and the small group of taxpayers involved, precludes them from providing more specific information.
98. Deputy Ruth Coppinger asked the Minister for Finance the amount of funds in the Ireland Strategic Investment Fund, ISIF, potentially available for new investments. [36826/17]
View answerAs at 31 July 2017, the value of the Ireland Strategic Investment Fund (ISIF) Discretionary Portfolio was €8.5 billion, of which the Fund has committed €2.9 billion to investments in Ireland. The balance of €5.6 billion is available for investment, as opportunities which meet the Fund’s mandate arise.
As set out in the Summer Economic Statement 2017, there is currently a review of the ISIF ongoing.
99. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount soon to be lodged by a company (details supplied) into an escrow account as a result of the European Commission investigation into the company's tax affairs here, including the amount due in interest. [36827/17]
View answer236. Deputy Michael McGrath asked the Minister for Finance further to the escrow fund set up for the European Commission’s decision regarding a company (details supplied), if the fund earns a return over time from interest and or capital gain, whether the company or the State entity will receive that return; if, in the event of the State receiving a return, it will be deemed to be a financial transaction; and if he will make a statement on the matter. [39016/17]
View answerI propose to take Questions Nos. 99 and 236 together.
Notwithstanding the appeal in the Apple State Aid case and the difference in view between Ireland and the Commission on the issue, the Government is committed to complying with the binding legal obligations the Commission’s Final Decision places on Ireland.
Apple therefore must be deprived of the benefit of the alleged aid and this involves two actions:
1. The calculation of the amount of aid
2. The process by which Apple are denied this amount of money
The Commission have estimated that this will amount to €13bn but the precise sum is to be calculated using the methodology set out in the Decision, which is then subject to interest as set out in EU Regulations on the recovery of State Aid.
These sums will be placed into an escrow fund with the proceeds being released only when there has been a final determination in the European Courts over the validity of the Commission’s Decision.
Given the scale and bespoke nature of such a fund, the precise terms are still being negotiated and are subject to confidential and commercially sensitive deliberations.
100. Deputy Ruth Coppinger asked the Minister for Finance the details of lobbying of his Department on the sections of the Companies (Accounting) Act pertaining to filing requirements for unlimited companies; and if he will make a statement on the matter. [36830/17]
View answerAs the Deputy will be aware, the requirements to file returns with the Companies Registration Office is set out in company law. My colleague the Tánaiste and Minister for Jobs, Enterprise and Innovation has responsibility for company law and any amendments to it, including those amendments included in the Companies (Accounting) Act 2017. My Department received a small number of representations in relation to the Companies (Accounting) Bill in the period between its publication and enactment. My Office acknowledged such correspondence and forwarded the original letters to the Department of Jobs, Enterprise and Innovation as a matter of course.
101. Deputy Ruth Coppinger asked the Minister for Finance the estimated intake from corporation tax in 2017 and 2018; and the estimated intake from the top ten and top 20 companies. [36831/17]
View answerMy Department’s latest official forecast is €7.7 billion and €8.0 billion in respect of corporation tax receipts for 2017 and 2018 respectively. This was projected as part of the overall forecasts in the recent Summer Economic Statement 2017. However, as the Deputy will appreciate, all tax-heads will be reviewed as part of annual budgetary process. Therefore, the next official forecast for 2017 and 2018 in respect of corporation tax receipts will be announced as part of Budget 2018, which will take account of the most up to date economic and fiscal information. I am advised by Revenue that while the top 10 largest payers of Corporation Tax accounted for 37% of receipts in 2016, it is too soon to assess their contribution (or that of the top 20) in relation to 2017 receipts as a significant share of 2017 tax has yet to be paid. Receipts from the top 10 or 20 companies are not forecast separately by my Department or Revenue.
102. Deputy Michael Healy-Rae asked the Minister for Finance if the European Banking Authority is responsible for supervising the work of national competent authorities (details supplied); and if he will make a statement on the matter. [36839/17]
View answerThe European Banking Authority (EBA) is an independent EU Authority which works to ensure effective and consistent prudential regulation and supervision across the European banking sector. Its overall objectives are to maintain financial stability in the EU and to safeguard the integrity, efficiency and orderly functioning of the banking sector.
The main task of the EBA is to contribute to the creation of the European Single Rulebook in banking whose objective is to provide a single set of harmonised prudential rules for financial institutions throughout the EU. The EBA also plays an important role in promoting convergence of supervisory practices and is mandated to assess risks and vulnerabilities in the EU banking sector.
The EBA does not have a role in supervising the work of the Central Bank of Ireland or the Financial Services Ombudsman. However, it does perform a number of important functions with respect to competent authorities, including:
Correct application and breach of EU law
The EBA has the power to investigate alleged breaches or non-applications of EU law, either upon request by one or more competent authorities or EU institutions or on its own initiative. The outcome of the EBA investigations into alleged breaches usually consists of recommendations addressed to the competent authority concerned.
Guidelines and recommendations
The EBA produces regulatory guidelines and recommendations with the purpose of providing guidance to banking institutions, investment firms and competent supervisory authorities on the application of EU regulations and directives. If a competent authority does not comply or does not intend to comply, it must inform the EBA of this and state reasons for non-compliance, as prescribed by the ‘comply or explain’ principle.
Mediation
The EBA has a role in settling disagreements between competent EU authorities in cross-border situations; that is in the supervision or resolution of those institutions that operate in more than one Member State. Upon the request of the competent authorities concerned, or on the EBA’s own initiative, the EBA will assist in reaching an agreement. If this cannot be achieved the EBA can then take binding decisions requiring that specific actions are taken, in order to ensure compliance with EU law.
103. Deputy Pearse Doherty asked the Minister for Finance if he will provide data on the personal tax take and total tax take as a percentage of GNI* as opposed to GDP for the most recent year available; and if he will make a statement on the matter. [36893/17]
View answerThe most recent figures for personal tax take, total tax take and modified GNI (GNI*) were released in July of this year as part of the CSO National Income and Expenditure Annual Results 2016 and Government Income and Expenditure (July 2017 Results). The data are collated and reproduced in the table following for the Deputy’s convenience.
|
2016 |
ESA Code |
€million |
% GDP |
% GNI* |
|
Taxes on production and imports |
D.2 |
23,431 |
8.5 |
12.4 |
|
Taxes on income, wealth |
D.5 |
29,087 |
10.6 |
15.4 |
|
Capital Taxes |
D.91 |
411 |
0.1 |
0.2 |
|
Total Taxes |
D.2 + D.5 + D.91 |
52,928 |
19.2 |
28.0 |
Source: Central Statistics Office.
104. Deputy John McGuinness asked the Minister for Finance if he will review the primary medical certificate scheme in budget 2018 to include autism as a basis for qualification; and if he will make a statement on the matter. [36905/17]
View answerThe Disabled Drivers and Disabled Passengers Scheme provides relief from VAT and Vehicle Registration Tax, an exemption from motor tax and a grant in respect of fuel expenditure, on the purchase of an adapted car for transport of a permanently and severely disabled person within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.
The scheme and qualifying criteria were designed specifically for those with severe physical disabilities and are, therefore, necessarily precise. To qualify for the scheme an applicant must be in possession of a primary medical certificate, which can be obtained if an applicant meets one of the following conditions:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
After six months an unsuccessful applicant can re-apply if there is a deterioration in their condition.
The scheme represents a significant tax expenditure, costing approximately €65 million in taxes foregone and grant payments in 2016. This does not include the revenue foregone to the Local Government Fund in respect of the relief from motor tax provided to members of the scheme.
I recognise the important role that the scheme plays in increasing the mobility of persons with disabilities. However, changing the current criteria to more general mobility criteria would raise the cost of the scheme and any such increases would require a concomitant increase in tax, reduction in public expenditure or increase in the Exchequer deficit.
From time to time representations are received on behalf of individuals who feel they would benefit from the scheme but do not qualify under the criteria. While I have sympathy for these cases, given the scale and scope of the scheme, I have no plans to expand the medical criteria beyond the six currently provided for in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.
105. Deputy Brendan Howlin asked the Minister for Finance the number of political staff employed in his Department, including parliamentary assistants, secretarial assistants, special advisors, drivers and other relevant positions; the number of public or Civil Service staff seconded to work within his Department or constituency offices; the salaries and job titles of each such person; the duty or role of each in each of the years 2015 to 2016 and to date in 2017, in tabular form; and if he will make a statement on the matter. [36953/17]
View answerI wish to inform the Deputy that the information provided is in respect of the Department of Finance.
In the years 2015 to June 2017 there were 4 political staff employed by my predecessor Deputy Michael Noonan, and the Deputy will find a list of their roles and annual salaries in the table following. The Personal Assistant worked in Deputy Noonan's Constituency Office in Limerick.
|
Role: |
Salary: |
|
Special Advisor |
€87,258 |
|
Personal Assistant |
€54,490 |
|
Civilian Driver |
€32,966 |
|
Civilian Driver |
€32,966 |
As a result in the change of Government in May 2016, Minister of State, Deputy Eoghan Murphy joined the Department of Public Expenditure and Reform and had a dual portfolio with duties for both the Department of Public Expenditure and Reform and the Department of Finance. As a result of this, both the Department of Public Expenditure and Reform and the Department of Finance split all costs associated with the staff in the Office of the Minister of State. The figures in the table following show the full cost of each of these staff.
|
Role: |
Salary: |
|
Special Advisor |
€57,614 |
|
Civilian Driver |
€34,699 |
|
Civilian Driver |
€34,699 |
I currently have no political staff paid by the Department of Finance. The staff in my Private Office are as follows:
|
Role: |
Salary: |
|
Executive Officers X 2 (WTE) |
€83,030 |
|
Clerical Officers 3.3 (WTE) |
€124,704 |
I have 1 staff member from the Department of Finance working in my Constituency Office, see the table following.
|
Role: |
Salary: |
|
Clerical Officer |
€25,375 |
In relation to Minister of State Michael D'Arcy, I understand that he has 2 political staff employed, as outlined in the table following.
|
Role: |
Salary: |
|
Civilian Driver |
€35,700 |
|
Civilian Driver |
€35,700 |
The staff in Minister D’Arcy’s Private Office are as follows:
|
Role: |
Salary: |
|
Administrative Officer (Private Secretary) |
€77,993 |
|
Executive Officer |
€28,749 |
|
Clerical Officers X 2 |
€52,000 |
