Written Answers Nos. 53-65
53. Deputy Barry Cowen asked the Taoiseach if funding given to approved housing bodies for building social housing is counted towards general government fixed capital formation estimated by the CSO for EUROSTAT. [44374/17]
View answerApproved housing bodies are classified in the non-profit sector. Funds provided to them by Government for the construction-acquisition of fixed assets are therefore classified as investment grants and do not form part of general Government fixed capital formation.
At the 2017 Excessive Deficit Procedure Dialogue Visit to Ireland, Eurostat set an action point for the CSO to review the classification of the approved housing bodies. This work is in progress and during this review, the AHBs remain classified to the non-profit sector.
54. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Business, Enterprise and Innovation if her Department is ensuring that all construction companies pay PRSI and social insurance contributions for all construction employees and that main contractors for State contracts, including PPPs, must be fully legally responsible for those contributions; and if she will make a statement on the matter. [44627/17]
View answerMy Department does not have any role in ensuring that companies pay PRSI and social insurance contributions for their employees. The Deputy might wish to raise this matter with the Minister for Employment Affairs and Social Protection.
55. Deputy Catherine Murphy asked the Minister for Finance the impact analysis conducted on the effect of the 20% minimum deposit rule in respect of potential non first-time home buyers who are trapped in crowded housing conditions in view of the fact they cannot afford a 20% deposit; and if he will make a statement on the matter. [44552/17]
View answerThe Central Bank is the macro prudential authority in Ireland. The bank has advised that the macro prudential mortgage measures are now in place as a permanent feature of the market and are operating in line with their stated objectives of enhancing the resilience of banks and borrowers to future shocks and reducing the risk of credit - house price spirals from developing.
The Central Bank undertook a broad-based review of the overall framework of the measures in 2016, which confirmed that it is effective, and is contributing to financial and economic stability by reducing the risk of unsustainable lending and borrowing.
The measures limit the amount of high loan-to-income (LTI) and loan-to-value (LTV) mortgages. For principal dwelling mortgages the LTI limit is 3.5. For first-time buyers (FTBs) the LTV limit is 90 per cent, while for second and subsequent buyers (SSBs) the limit is 80 per cent. In the case of the LTV limits as they pertain to SSBs, 20 per cent of the value of SSB lending per year is allowed to be over the 80 per cent LTV limit. Borrowers who are currently in negative equity and want to move home by purchasing another property are completely exempt from the LTV limits.
In line with their procedures, the Central Bank reviews the calibration of the mortgage measures on an annual basis given prevailing market conditions and with respect to the objectives of the measures. According to the Central Bank this year’s review will culminate in the decision of the Bank’s Commission on the appropriate calibration of the measures for 2018 at its meeting on 28 November of this year.
56. Deputy Pearse Doherty asked the Minister for Finance the parties that he or his officials met to discuss issues relevant to budget 2018; the names of all attendees; the issues discussed; and if he will make a statement on the matter. [44553/17]
View answerThe Deputy will appreciate that preparation for Budget 2018 and the Finance Bill is a complex matter and it would be impractical to provide a definitive list of every single such meeting that may have taken place, or to provide names of all individuals attending meetings of this nature.
However I can advise him that in advance of Budget 2018 I met, as the Minister for Finance usually does, a number of representative organisations. These were the CIF, IBEC, ICMSA, ICTU, IFA and the Community and Voluntary Pillar. The Pillar, as the Deputy will be aware, comprises seventeen separate organisations.
In addition, I met with other organisations including the American Chamber of Commerce, Independent News Media, and the Vintners’ Federation of Ireland. I also met senior Revenue officials.
I am advised that among the many groups met by my officials relating to Budget 2017 and the Finance Bill were:
Alcohol Action Ireland
Britvic
DIGI
Environmental Pillar
Irish Cancer Society
Irish Heart Foundation
Irish Vape Vendors Association
IFA
ICMSA
ICOS
ITMAC
National Off-Licence Association
Paddy Power Betfair
Philip Morris International
SIMI
Toyota
Social Justice Ireland
IBEC
My officials also met with their colleagues in other Government Departments and agencies. These would have included meetings with Revenue, the Department of Business, Enterprise and Innovation, the Department of Employment Affairs and Social Protection, the Department of Housing, Planning and Local Government, Enterprise Ireland, and the Residential Tenancies Board.
The Deputy should be aware that my officials and I meet with a range of organisations and individuals on a regular basis and it is often the case that the issue of an upcoming Budget or Finance Bill arises.
I would note also that in the run-up to Budget 2018 and the Finance Bill I have received to date more than 400 submissions from a wide variety of groups, representative organisations and individuals. All such submissions received are recorded and distributed as appropriate, so that their content may be considered by the relevant officials in the context of Budget and Finance Bill preparation.
Finally, the Deputy will be aware that the Register of Lobbying is provided for in the Regulation of Lobbying Act 2015 and makes information available on the identity of those communicating with designated public officials on specific policy, legislative matters or prospective decisions.
57. Deputy Pearse Doherty asked the Minister for Finance the reason the State is not fully implementing EU anti-money laundering directive four in relation to the beneficial ownership of trusts; and if it will be fully implemented. [44563/17]
View answerThe EU’s Fourth Anti-Money Laundering Directive (“4AMLD”) includes a number of measures to combat money laundering and protect the integrity of the financial system, efforts to which Ireland is committed. More specifically, in relation to the beneficial ownership of trusts, Article 31 of the Directive contains an obligation on trustees of express trusts to obtain and hold information on the beneficial ownership of the trust, that is details of the person or persons who ultimately exercise ownership or control over the trust. It also requires trustees to make this information available to competent authorities and FIUs (Financial Intelligence Units) in a timely manner and to disclose this information to obliged entities in specific circumstances. The deadline set by the Commission for transposition was 26 June 2017.
However, since the final text of 4AMLD was published the Commission has (July 2016) proposed amendments which were intended to make extensive changes to Article 31 of 4AMLD. We were awaiting the outcome of these negotiations so that they could be incorporated into our transposition. Unfortunately, discussions have not progressed sufficiently to facilitate this approach. For this reason and also due to the technical complexity of the measures and the need to engage with stakeholders to discuss an appropriate framework for the collection of this data, the transposition deadline has been passed. This is the case with many other member states who are also still progressing their transpositions. Having said this, work on transposing this directive is progressing and draft legislation to enact the requirements of Article 31 is with the Office of Parliamentary Counsel for their consideration.
58. Deputy Pearse Doherty asked the Minister for Finance the number of companies that self-employed persons had for the purposes of their self-employed activities, including trade and professional, in each of the years 2011 to 2016; and if he will make a statement on the matter. [44564/17]
View answer59. Deputy Pearse Doherty asked the Minister for Finance the corporation tax paid by companies which contain self-employed income, including trade and professional earnings, in each of the years 2011 to 2016; and if he will make a statement on the matter. [44565/17]
View answer60. Deputy Pearse Doherty asked the Minister for Finance the amount paid out in dividends by the self-employed from their own companies in each of the years 2011 to 2016; and if he will make a statement on the matter. [44566/17]
View answerI propose to take Questions Nos. 58 to 60, inclusive, together.
Regarding Question Nos. 58 and 59, following clarification from the Deputy’s office, I am informed by Revenue that data from Income Tax and Corporation Tax returns are not recorded and stored in a manner that would facilitate analysis of movements of individuals from self employment to incorporation as the Deputy is seeking.
In relation to Question No. 60, in most cases for smaller companies remuneration is paid through directors’ salaries and other Schedule E income. Payment of dividends would be relatively unusual for such companies. Notwithstanding this, I am advised by Revenue that due to the way in which income from dividends is declared on tax returns, it is not possible to separately identify dividends relating to those paid out by a company which is owned by the taxpayer.
61. Deputy Pearse Doherty asked the Minister for Finance the EU budgetary contribution expected from the State for 2018 and 2019; the modelling that has been carried out to determine the State's estimated contribution post Brexit; the quantum this might be in the potential different scenarios for 2020, 2021 and 2022; and if he will make a statement on the matter. [44567/17]
View answerAs outlined in Budget 2018, my Department currently forecasts that Ireland's contribution to the EU budget will be €2,650 million in 2018, €2,675 million in 2019 and €2,750 million in 2020. It is worth noting that this forecast is contingent on a number of variables, including the size of the overall EU budget for any individual year and other operational developments which will only emerge as the year progresses. As such, these estimates are monitored and updated on an ongoing basis as new information becomes available.
In relation to Brexit, as the Deputy will be aware, negotiations are currently on-going. Therefore, as he can appreciate, it would not be advisable for me to discuss those negotiations in detail at this point. Ireland wants a financial settlement reached in a fair and transparent manner on the basis of an agreed, objective methodology, that enables a positive future relationship between the EU and the UK and which reflects the UK's legal and budgetary commitments under the Multiannual Financial Framework.
My Department has undertaken some modelling work to estimate the potential impact of Brexit on our EU budget contributions. This analysis will be developed as the negotiations progress and when the Commission publishes its proposal on the next Multiannual Financial Framework (post 2020), currently expected to be released in May 2018.
While my Department currently forecasts Ireland's contributions to the EU budget for 2021 to be €2,775 million, this figure is used primarily for illustrative purposes. It should also be noted that the 2021 forecast falls outside the current Multiannual Financial Framework and as such, should be treated with caution. Contribution estimates will be updated on an ongoing basis as new information becomes available.
62. Deputy Micheál Martin asked the Minister for Finance further to European Commission President's, Jean-Claude Juncker, state of the union address and in particular his comments regarding the CCTB, the implications it will have for Ireland; and if he has written to the European Commission President outlining Ireland's concerns. [40406/17]
View answerI note the comments made by President Juncker regarding CCTB and the requirement of unanimity. There is no official proposal currently for a change on the way tax policy decisions are taken in the EU.
Under the EU Treaties, for the European Council to move a policy area such as taxation from unanimity to qualified majority voting it would require a unanimous decision to do so. The support of the European Parliament would also be required. The Irish Government would not favour any change to existing EU voting rights on corporation tax.
Member States are discussing and debating the various aspects of the CCTB proposal in the relevant tax working parties. Ireland will engage constructively with the proposal while critically analysing whether it is in line with Ireland’s long-term interests.
Tax remains a matter of Member State competence and unanimity is required before any proposals can be agreed.
63. Deputy Alan Farrell asked the Minister for Finance the action he plans to take to address situations whereby when financial institutions and their customers are negotiating on the warehousing of debt the financial institutions allow arrears to accumulate during this negotiation period, subsequently adversely affecting the customer’s credit rating; and if he will make a statement on the matter. [44663/17]
View answer64. Deputy Alan Farrell asked the Minister for Finance the action he plans to take in situations in which a self-employed person's credit rating has been adversely impacted with regard to home mortgage arrears resulting from the accumulation of debt during the period of negotiation on warehousing between the person and a financial institution; if he will address the fact that they will face increased difficulty in accessing future finance for their business, preventing it from growing and subsequently preventing them from creating jobs in their local community; and if he will make a statement on the matter. [44664/17]
View answerI propose to take Questions Nos. 63 and 64 together.
In relation to situations whereby, when financial institutions and their customers are negotiating on the warehousing of debt, and that arrears accumulate during this time, and its subsequent affect on the consumer's credit rating, the Central Bank advises me that the type of consumer and the type of loan involved will dictate which of the Central Bank’s rules will apply to the particular case.
The Central Bank’s Code of Conduct for Mortgage Arrears (CCMA) applies to the mortgage loan of a borrower (in arrears or pre-arrears) which is secured by their primary residence. The CCMA sets out how lenders must treat borrowers in or facing mortgage arrears, with due regard to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. All such cases must be handled sympathetically and positively by the lender, with the objective at all times of assisting the borrower to meet his/her mortgage obligations. As part of the Mortgage Arrears Resolution Process set out in the CCMA, lenders must explore all of the options for alternative repayment arrangements (ARAs) offered by that lender, which may include warehousing part of the mortgage.
Prior to completing a full assessment of the borrowers case, a lender may agree with the borrower to put a temporary ARA in place where a delay in putting an ARA in place will further exacerbate a borrower’s arrears or pre-arrears situation. Such a temporary ARA should be for a limited period of time and should be sufficient to enable the lender to complete a full review of the borrower’s case.
The CCMA requires lenders to provide borrowers in arrears with information about how data relating to the borrower’s arrears will be shared with the Irish Credit Bureau or any other credit reference agency or credit register, where permitted by contract or required by law, and the impact on the borrower’s credit rating.
The arrears handling provisions in Chapter 8 of the Consumer Protection Code (the Code) apply when the loan is not a mortgage loan to which the CCMA applies. The Code requires that regulated entities have in place written procedures for the handling of arrears.
Where an account is in arrears, a regulated entity must seek to agree an approach that will assist the personal consumer in resolving the arrears. Specified information in relation to arrears must be made available to personal consumers, including general information to encourage the consumer to deal with arrears and stating the benefits of dealing with arrears.
Where an account remains in arrears for 31 calendar days after the arrears first arose, a regulated entity must inform the consumer of the status of the account and other specified information. This includes the amount of the arrears to date and the interest rate applicable to the arrears, details of any charges in relation to the arrears that may be applied and the importance of the personal consumer engaging with the regulated entity in order to address the arrears. This must be updated every three months, where the arrears persist.
Where a regulated entity reaches an agreement on a revised repayment arrangement with a personal consumer, the regulated entity must provide the personal consumer with a clear explanation of the revised repayment arrangement and clarification on what data relating to the consumer’s arrears will be shared with the Irish Credit Bureau or any other relevant credit reference agency.
In relation to a self employed person's credit rating being adversely impacted with regard to mortgage arrears resulting from the accumulation of debt during the period of negotiation on warehousing between the person and the financial institution, and it's consequent affects, the Central Bank has advised me that in December 2015, the Central Bank published new regulations for firms lending to small and medium enterprises (SME Regulations), with which regulated lenders (other than credit unions) have been required to comply with since 1 July 2016, and in the case of credit unions, from 1 January 2017.
The SME Regulations aim to strengthen protections for SMEs when borrowing from regulated lenders while also facilitating access to credit. They also set out a framework which regulated entities must comply with when dealing with SME borrowers in arrears and financial difficulties. The SME Regulations require regulated entities to establish and maintain in writing policies and procedures for dealing with borrowers in financial difficulties. Regulated entities must make available to borrowers an information booklet, to include:
- a statement emphasising that it is in the borrower’s interest to engage with the regulated entity about arrears or financial difficulties;
- a statement that the financial difficulties may impact on the borrower’s credit rating;
- the option of an immediate review of the borrower’s credit facilities.
Within 10 working days of a borrower entering financial difficulties, a regulated entity must inform the borrower of, among other things:
- the status of the account;
- the applicability of the SME Regulations;
- the availability of the information booklet referred to above; and
- that it is in the borrower’s interest to engage with the regulated entity about arrears or financial difficulties
Where a regulated entity offers an alternative arrangement to an SME borrower, the regulated entity must provide certain information in writing to the borrower including how the alternative arrangement will be reported by the regulated entity to a relevant credit reference agency or credit register and that it may impact on the borrower’s credit rating. The decision to grant credit is a commercial decision for lenders.
65. Deputy Maureen O'Sullivan asked the Minister for Finance the tax expenditures that exist to support credit unions, including those which the tax strategy group referenced in its 2009 recommendation that tax exemption for the income of credit unions should be continued (details supplied); if the tax expenditures recommended for continuance in that report are still in place; and the reason they are not enumerated in the Revenue Commissioners' published data on the cost of tax expenditures. [44731/17]
View answerI am advised by the Revenue Commissioners that the profits of Credit Unions have been exempt from tax since 1972. Since 1998 that exemption applies to Credit Unions which are registered or deemed to be registered under the Credit Union Act 1997. There are no other tax expenditures or reliefs available specifically or primarily to credit unions.
I am further advised by Revenue that there are no costings available in relation to this exemption from tax.
