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Tuesday, 13 Feb 2018

Written Answers Nos. 113-135

Dublin-Monaghan Bombings

Questions (113)

Micheál Martin

Question:

113. Deputy Micheál Martin asked the Tánaiste and Minister for Foreign Affairs and Trade if he has further information on the inquiry sought on the Dublin-Monaghan bombings. [6907/18]

View answer

Written answers

Dealing with long-outstanding issues relating to the legacy of the conflict in Northern Ireland is of the utmost importance to the Government. The Programme for a Partnership Government highlights this priority, with specific reference to implementation of the All-Party Dáil motions relating to the Dublin Monaghan bombings.

I acknowledge also those across the House who work on a cross-party basis with the Government on this issue and the tireless efforts of Justice for the Forgotten.

The All-Party motion on the 1974 Dublin Monaghan bombings that was adopted by the Dáil on 25 May 2016 has, like those adopted in 2008 and 2011, been conveyed to the British Government. These motions call on the British Government to allow access by an independent, international judicial figure to all original documents relating to the Dublin and Monaghan bombings, as well as the Dublin bombings of 1972 and 1973, the bombing of Kay’s Tavern in Dundalk and the murder of Seamus Ludlow.

The Government is committed to actively pursuing the implementation of these all-Party Dáil motions, and has consistently raised the issue with the British Government.

I am actively engaged with the British Government on an ongoing basis on this issue, as are officials from the Department of Foreign Affairs and Trade. I discussed the matter on a number of occasions with the former Secretary of State, James Brokenshire, and I will continue to pursue the issue directly with the current Secretary of State for Northern Ireland, Karen Bradley.

As part of this engagement, the Government underlines that the Dáil motions represent the consensus political view in Ireland that an independent, international judicial review of all the relevant documents is required to establish the full facts of the Dublin Monaghan atrocities. I have also advised that the absence of a response from the British Government is of deep concern to the Government and indeed this House, and I have emphasised the urgent need for such a response.

The Government will continue to engage with the British Government on the request in relation to the Dublin-Monaghan bombings, and pursue all possible avenues that could achieve progress on this issue, consistent with the request made by this House.

Tax Code

Questions (114)

Dara Calleary

Question:

114. Deputy Dara Calleary asked the Minister for Finance the independent economic evidence and analysis that concludes that Ireland's income tax regime and rates are prohibitive in terms of job creation or attracting foreign direct investment. [6651/18]

View answer

Written answers

The average tax wedge is used by the OECD to measure the extent to which taxes on labour income discourage employment. The tax wedge is defined as the ratio between the amount of taxes paid by an average single worker without children (i.e. a worker on 100% of average earnings) and the corresponding total labour costs for the employer including employer social insurance costs.

Ireland historically has one the lowest tax wedge levels both within the EU and the OECD at average wages. In 2016 (the latest year of data available), Ireland’s average tax wedge was 27.1% of labour costs. This compares very favourably to the OECD-average of 36.0%, and has been the lowest of the EU28 member states since 2000.

However, this comparative difference in tax wedge is eroded as incomes increase. Analysis published in the Income Tax Reform Plan in 2016, available online at http://www.finance.gov.ie/wp-content/uploads/2017/07/Income-Tax-Reform-Plan.pdf, shows that in 2015 the Irish tax wedge for a single person was comparatively low at income of up to 125% of average earnings. It then surpassed the UK and USA at c.125% and 150% respectively and surpassed the comparative French tax burden at c.210% of average earnings, while still remaining below Denmark and Germany.

In Budget 2015, the Department of Finance undertook an Economic Impact Assessment of Ireland’s Corporation Tax Policy available online at http://www.budget.gov.ie/Budgets/2015/Documents/EIA_Summary_Conclusions.pdf. As part of this work, ESRI researchers estimated that the corporate tax rate has a negative effect on the location decision of multinational companies. In other words, the higher the corporation tax rate in a country, the lower the probability of FDI locating there. Although not the main focus of this research, they also examined the relationship between labour costs and FDI. The researchers found that the higher the labour costs in a country, the lower the probability of FDI locating there. This negative relationship between labour costs and FDI is borne out in other international studies such as:

- Johansson et al. (2008) “TAX AND ECONOMIC GROWTH”, OECD, https://www.oecd.org/tax/tax-policy/41000592.pdf

- Hajkova et al. (2006) “TAXATION, BUSINESS ENVIRONMENT AND FDI LOCATION IN OECD COUNTRIES”, OECD, http://www.oecd.org/eco/public-finance/37002820.pdf

All else equal, it implies that countries with higher tax wedges than other countries are more likely to deter FDI.

I would also note that it is important to look at the effects of budgetary measures over time and not ignore their broader impacts. The contribution of budgetary policy to employment growth over the past number of years is a case in point. Employment is the best route out of poverty and is crucial to ensuring the sustainability of Ireland’s prosperity. Therefore the importance of the role of budget measures in creating an environment conducive to employment creation should not be understated. As such, it remains a key Government priority to maintain competitiveness and support employment growth. The Department of Finance will continue to monitor developments in this evidence base closely.

Disabled Drivers and Passengers Scheme

Questions (115)

Pat Deering

Question:

115. Deputy Pat Deering asked the Minister for Finance the reason a person (details supplied) was refused assistance from the disabled drivers and passengers scheme. [6721/18]

View answer

Written answers

To qualify for the Disabled Drivers and Disabled Passengers Scheme an applicant must be in possession of a primary medical certificate (PMC). I have no function in relation to the issuing of PMCs.

A Senior Medical Officer for the relevant local Health Service Executive administrative area makes a professional clinical determination as to whether an applicant satisfies the medical criteria necessary to qualify for a PMC.

An applicant who is unsuccessful in applying for a PMC can appeal the decision of the Senior Medical Officer to the Disabled Drivers Medical Board of Appeal which makes a new clinical decision within the scope of the qualifying criteria. The Regulations mandate that the Medical Board of Appeal is independent in the exercise of its functions to ensure the integrity of its clinical determinations.

Tax Code

Questions (116)

Micheál Martin

Question:

116. Deputy Micheál Martin asked the Minister for Finance the discussions he has had recently regarding the proposed changes from other EU states on tax harmonisation. [6818/18]

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Written answers

Proposals for tax harmonisation at EU level are not new. The Common Consolidated Corporate Tax Base has been discussed for a number of years and was first formally proposed in 2011. In line with the Programme for Partnership Government, Ireland is constructively engaging in the debate on the CCCTB proposal while critically analysing the extent to which the proposal impacts Ireland's interests.

Any tax Directive at EU level leads to convergence on some aspect of tax. Ireland has supported the EU Anti-Tax Avoidance Directives, which standardise anti-avoidance measures across the EU in line with the OECD BEPS recommendations.

However, taxation remains within the competence of individual Member States and unanimity is needed before any tax changes can be agreed at EU level.

Ireland's position has always been clear - we do not support tax harmonisation that undermines a Member State's ability to set its own tax rate and to determine its own tax base. We have however shown we are willing to agree EU tax Directives that seek to implement agreed international best practice in a consistent manner across the EU. This remains Ireland's position.

Ireland are by no means alone in having concerns about tax harmonisation. These views are shared by many other Member States across the EU.

Insurance Coverage

Questions (117)

Frank O'Rourke

Question:

117. Deputy Frank O'Rourke asked the Minister for Finance if an anomaly whereby insurance companies are refusing to offer flood insurance for houses not located in known flood zones and with no history of flooding will be examined (details supplied); and if he will make a statement on the matter. [6849/18]

View answer

Written answers

I am conscious of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has been prioritising investment in flood defences over the last number of years.

However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which has to be based on a proper assessment of the risks they are willing to accept. This assessment will in many cases include insurers own presumptions based on their private modelling and research. Consequently, neither the Government nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from doing so.

Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. This in turn should lead to the increased availability of flood insurance. To achieve this aim, there is a focus on:

- prioritising spending on flood relief measures by the Office of Public Works (OPW) and relevant local authorities,

- development and implementation of plans by the OPW to implement flood relief schemes, and

- improving channels of communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in marginal areas.

The above approach is complemented by a Memorandum of Understanding between the OPW and Insurance Ireland, which provides for the exchange of data in relation to completed flood defence schemes which should provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, now meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties.

Finally, you should be aware that a consumer can make a complaint to the Financial Services Ombudsman in relation to any dealings with a Financial Services or Insurance provider during which they feel they have been unfairly treated. In addition, individuals who are experiencing difficulty in obtaining flood insurance or believe that they are being treated unfairly may contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance.

Tax Credits

Questions (118)

Martin Kenny

Question:

118. Deputy Martin Kenny asked the Minister for Finance the estimated cost of allowing the €5,000 tax credit incentive under the farm partnership scheme to be allowable against non-farm income (details supplied). [6992/18]

View answer

Written answers

I assume the Deputy is referring to the tax credit available through the Succession Farm Partnership scheme.

This scheme is a joint initiative between my Department and the Department of Agriculture, Food and the Marine, designed to encourage an older farmer to form a partnership with a young trained farmer, with a view to transferring management of the farm and ultimately ownership of the farm.

It was announced in Budget 2016 and commenced early 2017 following State Aid approval. The use of a partnership model, rather than an upfront outright sale, allows for the transfer of knowledge from the older farmer to the younger farmer in advance of the transfer of ownership of the land.

For a period of five years, a tax credit of €5,000 is available to the partners. The credit can only be offset against their farming income, and it is to be split between the partners in accordance with their profit sharing ratio.

As 2017 was the first year in which this credit could be claimed, I am advised by Revenue that data in respect of taxpayers availing of this credit, and their relevant incomes, are not yet available. Information in relation to 2017 will not be available until mid-2019 when tax returns for 2017 have been filed by taxpayers and processed by Revenue.

As such, I am not currently in possession of the relevant data which would allow me to make the cost estimation which has been requested by the Deputy.

Tax Exemptions

Questions (119)

Martin Kenny

Question:

119. Deputy Martin Kenny asked the Minister for Finance the estimated cost of increasing the age limit from 35 to 40 years to qualify for the stamp duty exemption on the transfer of farm land. [7193/18]

View answer

Written answers

I am advised by Revenue that it is not possible to provide an estimated cost of increasing the age limit to qualify for the Stamp Duty exemption on the transfer of farm land. This is because from the tax return and other data available to Revenue, it is not possible to identify the numbers of cases that could be affected or predict changes to their tax liability.

Strategic Communications Unit

Questions (120)

Micheál Martin

Question:

120. Deputy Micheál Martin asked the Minister for Finance if he, his officials or advisers have had meetings with the strategic communications unit since it was set up; the issues that were discussed; and if he will make a statement on the matter. [6690/18]

View answer

Written answers

My Department has engaged with the Strategic Communication’s Unit (SCU), Department of the Taoiseach, on an ongoing basis and one senior official is a member of the Assistant Secretary Delivery Team. This team meet on a bi-monthly basis to advance the work of the reform of Government strategic communications.

Discussion on the following specific actions to be implemented are taking place:

1. Roll out of a single unified Government of Ireland identity programme;

2. Migration of Government Department websites to one new portal for Government;

3. Commencement of a Government wide capacity building professional development programme for officials working in communications;

4. A number of proposed cross Government priority campaigns;

5. Creation of a unified international communications programme for Ireland as part of the ‘Doubling the Global Footprint initiative’.

Officials from my Department have also been working in partnership with the SCU team on an informal basis to commence the implementation of the single unified identity and the completion of a migration plan for existing official Department websites to move to http://www.gov.ie/.

Financial Services Ombudsman Remit

Questions (121)

Pearse Doherty

Question:

121. Deputy Pearse Doherty asked the Minister for Finance if the Financial Services and Pensions Ombudsman Act 2017 allows the Financial Services Ombudsman to investigate a complaint regarding conduct that took place post 2002 even if the product itself was sold before 2002 assuming all other conditions are met; and if he will make a statement on the matter. [6692/18]

View answer

Written answers

As the Deputy will be aware the Financial Services and Pensions Ombudsman Act 2017 which commenced on 01 January 2018 established the Financial Services and Pensions Ombudsman (FSPO).

Firstly, I must point out that the Ombudsman is independent in the performance of his statutory functions. I have no role in the day to day workings of the office. I would consider that the Ombudsman could investigate a complaint in the general circumstances described.

I have been informed by the Ombudsman that he considers that the jurisdiction of the FSPO to investigate a complaint regarding conduct, is dependent upon whether that conduct relates to a pension provider or a regulated financial service provider.

Conduct complained of against a financial service provider must have occurred during or after 2002. Although the sale of the product prior to 2002 is not a bar in itself to the investigation by the FSPO of conduct which occurred after 2002, it is important to note that the legislative provisions governing the power of the FSPO to investigate such complaints are complex.

Section 51 of the Act prescribes a period of 6 years for the making of a complaint to the FSPO that does not relate to a “long-term financial service”.

Complaints about long-term financial services can be made to the FSPO within whichever of the following periods is the last to expire:

1. 6 years from the date of the conduct giving rise to the complaint;

2. 3 years from the earlier of the date on which the person making the complaint became aware, or ought reasonably to have become aware, of the conduct giving rise to the complaint;

3. such longer period as the Ombudsman may allow where it appears to him or her that there are reasonable grounds for requiring a longer period and that it would be just and equitable, in all the circumstances, to so extend the period.

It should be noted that the long-term financial service should not have expired or otherwise been terminated more than 6 years before the date the complaint is made.

The FSPO is precluded by Section 50 of the Act from investigating complaints where:

(a) the internal dispute resolution procedures required under Section 54 have not been complied with,

(b) there are or have been proceedings (other than where the proceedings have been stayed under Section 49) before any court in respect of the matter that is the subject of the investigation,

(c) the complaint relates to a matter that is within the jurisdiction of the Workplace Relations Commission or Pensions Authority or an alternative suitable forum or tribunal, or

(d) the complaint, or any matter arising in connection with the complaint, is excluded from the jurisdiction of the Ombudsman by regulations made under Section 4.

The Ombudsman must also be cognisant of the provisions of Section 52 of the Act which prescribe that he may decline to investigate a complaint where, in his opinion:

(a) the complaint is frivolous or vexatious or was not made in good faith,

(b) the subject matter of the complaint is trivial,

(c) the conduct complained of occurred at too remote a time to justify investigation,

(d) there is or was available to the complainant an alternative and satisfactory means of redress in relation to the conduct complained of,

(e) the complainant has no interest or an insufficient interest in the conduct complained of, or

(f) the subject matter of the complaint is of such a degree of complexity that the courts are a more appropriate forum.

Each complaint is dealt with on its own merits and there may be any number of aspects to a complaint which require consideration, in order to determine whether the Ombudsman can investigate a complaint about conduct which has occurred after 2002.

Departmental Expenditure

Questions (122)

Dara Calleary

Question:

122. Deputy Dara Calleary asked the Minister for Finance the amount spent by his Department on photography, by photographer and-or agency, the public relations or communications advice external to the media officers of his Department, by agency; the use of public relations or communications advice by an agency fully funded by his Department, by agency and month in tabular form, since 1 January 2016; and if he will make a statement on the matter. [6748/18]

View answer

Written answers

The costs incurred by my Department on photography are set out in the following table.

Please note that; Of the seventeen bodies under the aegis of my Department, The Disabled Drivers Medical Board of Appeal (DDMBA) is the only one that is fully funded by my Department. Since 1 January 2016 the DDMBA have not incurred any expenditure on photography, public relations or communications advice.

Year

Month

Supplier

Amount

Description

2016

March

Brendan Lyon Photography

€105

Irish Institute of Training and Development (IITD) award photo

2017

February

Sherwood Photography

€758

Recognition of Award Event

2017

March

Event Portraits Ltd

€701

IITD Award Photo (photo to be published in the below Sunday Business Post piece)

2017

April

MediaVest

€2871

Sunday Business Post Media coverage for the Department winning the IITD Award 2017

Stamp Duty

Questions (123)

Martin Kenny

Question:

123. Deputy Martin Kenny asked the Minister for Finance the position regarding the stamp duty being charged in respect of a matter (details supplied). [6789/18]

View answer

Written answers

I am advised by Officials from my Department that a response to this letter issued to the Deputy's office on 12th February 2018.

From the information received, it appears that the person concerned was engaged in contract negotiations for the purchase of non-residential land at the time of the restoration of the 6% stamp duty rate on non-residential land. However, from the correspondence, it is not clear if the transaction meets the requirements for the transitional measures.

Any person who filed a Stamp Duty return before the enactment of the Finance Bill and who was satisfied that the transitional measures would apply had two options. He or she could:

1. File a return through the e-stamping system, pay Stamp Duty at the rate of 6% and be issued with a stamp certificate. On enactment of the Finance Bill, the filer could then request a refund of the difference in the Stamp Duty paid between the 2% and 6% rates by amending the return and submitting the relevant documentation to Revenue, or

2. File a return through the e-stamping system and pay the Stamp Duty at the rate of 2%, in which case a stamp certificate would not be issued until enactment of the Finance Bill, Revenue will publish information on how the postponed stamp certificate can be obtained.

VAT Registration

Questions (124)

Noel Grealish

Question:

124. Deputy Noel Grealish asked the Minister for Finance the number of businesses whose place of business is registered outside of Ireland that are registered for VAT here; and if he will make a statement on the matter. [6830/18]

View answer

Written answers

The VAT treatment of the supply of goods and services in the State is subject to EU VAT law with which Irish VAT law must comply.

As a consequence, entities with a business address in another EU Member State can be required to register and account for VAT in Ireland if the place of supply of goods and services is deemed by EU law to be in this State.

I am advised by the Revenue Commissioners that there are currently 9,636 non-resident businesses registered for VAT in Ireland. This number can vary considerably over time due to the transient nature of many of the activities carried out in the State by the businesses concerned.

Tax Reliefs Data

Questions (125, 126)

Dara Calleary

Question:

125. Deputy Dara Calleary asked the Minister for Finance the cost of the tax relief on private rented accommodation in each of the years from 2000 to 2017, in tabular form. [6867/18]

View answer

Dara Calleary

Question:

126. Deputy Dara Calleary asked the Minister for Finance the number of persons who benefitted from the tax relief on private rented accommodation in each of the years from 2000 to 2017, in tabular form. [6868/18]

View answer

Written answers

I propose to take Questions Nos. 125 and 126 together.

I assume the Deputy is referring to the Rent Tax Credit, which was a credit available to those paying for private rented accommodation. This included rent paid for flats, apartments or houses. It did not include rent paid to local authorities. The credit has been phasing out for a number of years and remained available only to persons who were renting on 7 December 2010. The credit ceased to be available after 31 December 2017.

I am advised by Revenue that the numbers availing of the Rent Tax Credit and the cost associated with the provision of this credit are available on Revenue’s website in tabular form for the years 2004 to 2015 (the latest year for which comprehensive data are currently available) at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx. Information for the years 2000 to 2003 is shown in Revenue’s statistical reports for those years, available at: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/archive/index.aspx.

Motor Insurance Costs

Questions (127)

Seán Haughey

Question:

127. Deputy Seán Haughey asked the Minister for Finance if his attention has been drawn to the problems faced by returned emigrants from non-EU countries in obtaining motor insurance; if his attention has been further drawn to the fact that these persons pay high motor insurance premiums; if this matter can be addressed in the context of the implementation of the cost of insurance working group report; and if he will make a statement on the matter. [6873/18]

View answer

Written answers

I wish to inform the Deputy that issues faced by returned emigrants, both from EU and non-EU countries, featured prominently in the Cost of Insurance Working Group’s examination of the motor insurance sector. Accordingly, Recommendation 6 of the Report on the Cost of Motor Insurance aims to address the problems faced by this category of drivers. Pursuant to this recommendation, a protocol has been agreed between the Department and Insurance Ireland under which insurance companies have committed to accepting the driving experience returning emigrants gained while abroad, when the driver has had previous driving experience in Ireland. The guiding principle of the protocol is to ensure that a returning emigrant is not treated any differently to any other driver subject to their ability to demonstrate, and the insurance company to verify, continuous driving experience and the normal acceptance criteria of the company. What this means is that the returning emigrant will not be disadvantaged from spending time abroad. Furthermore, under the protocol insurance companies will not distinguish between countries on the basis of which side of the road driving takes place therein or, indeed, whether the country is a member of the EU or not.

In addition to the above, insurance companies have agreed to provide relevant and helpful information on their websites to make it easier for consumers to understand the implications of their move abroad from a motor insurance perspective. As part of this exercise, they will outline what people need to do under a number of different circumstances depending on the length of time they intend being away from Ireland.

Insurance Ireland submitted a report on the implementation of this recommendation to the Department of Finance on 22 December 2017. This report confirmed that Insurance Ireland members have agreed to publish the wording of the agreed protocol on their company websites and any other forms of social media, in addition to providing training for staff who can work through issues with emigrants before they leave, whilst they are out of the country and when they return to Ireland. The stated intention is “to resolve any issues well before they arise and for the consumer to be aware of the considerations when moving abroad”. The wording of the agreed protocol is also available on the Insurance Ireland website.

The report also outlines some sample cases which demonstrate how the rolling-out of the protocol has already led to disputed cases being resolved to the benefit of returning emigrants, and provides figures indicating that the number of such cases being processed under the Declined Cases Agreement is decreasing.

If, however, a returning emigrant is unable to secure a motor insurance quotation on the open market, they may be in a position to avail of the Declined Cases Agreement process, and the relevant contact details are: declined@insuranceireland.eu or 01-6761914. More generally, Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu or 01-6761820.

Revenue Commissioners

Questions (128)

Robert Troy

Question:

128. Deputy Robert Troy asked the Minister for Finance his views on whether an adequate service is being provided at the Revenue Commissioners' office in Athlone (details supplied) in view of the difficulties experienced by persons who have limited or no online experience; and if he will make a statement on the matter. [6874/18]

View answer

Written answers

I am advised by Revenue that it has introduced an appointments service in a number of public offices, including the Athlone office. A dedicated telephone line for the purposes of making appointments at this Office has been in operation since 4 July 2016. The availability of an appointments facility at the office has improved Revenue's services to its customers. The service allows taxpayers to meet Revenue officials at a time that suits the customer, when they can be certain of a speedy service, removing any potential for queuing or delays. If, during the course of the initial telephone conversation, the Revenue Officer identifies a more efficient and cost effective means for the customer to carry out their business, he or she will be advised in this regard. Circumstances of elderly customers and those with limited or no access to internet facilities are always taken into account.

Revenue is not aware of any difficulties encountered by customers in accessing its services since the appointments facility was introduced at the Athlone office but if the Deputy provides details of any particular difficulties that he may be aware of, Revenue will contact the customers concerned and resolve their issues without delay.

Customs and Excise Controls

Questions (129)

Tom Neville

Question:

129. Deputy Tom Neville asked the Minister for Finance if an exemption from custom taxes in respect of the importation of alcohol and herbs (details supplied) for the alternative treatment of Lyme disease will be allowed; and if he will make a statement on the matter. [6878/18]

View answer

Written answers

I am advised by Revenue that having regard to the range of products and substances involved, Revenue will need to engage directly with the person concerned before a considered view can be provided. I am advised by Revenue that direct contact is being made with the person concerned with a view to confirming Revenue’s view on the matter as soon as possible.

Mortgage Data

Questions (130)

Michael McGrath

Question:

130. Deputy Michael McGrath asked the Minister for Finance the number and value outstanding of private dwelling home mortgages that have tracker, variable and fixed interest rates; the number and value outstanding of buy-to-let mortgages that have tracker, variable and fixed interest rates; and if he will make a statement on the matter. [6967/18]

View answer

Written answers

Central Bank of Ireland statistics on private household credit and deposits (Money, Credit and Banking Statistics - Tables A.18.1 and A.18.2) indicates that, as at the end of quarter 3 2017, the following are the outstanding amounts of loans advanced to Irish resident private households for the purpose of house purchase (including loans that are securitised/transferred but remain serviced by any Irish resident credit institution) broken down as follows:-

PDH

Tracker - €36.1 bn

Variable - €36.0 bn

Fixed rate - €13.4 bn

BTL (inc. holiday/second homes):

Tracker - €12.9 bn

Variable – €5.9 bn

Fixed rate – €0.3 bn

(Mortgages where the interest rate is fixed for a period up to one year are included in ‘variable’ category above).

The Central Bank advises that it does not have data for the corresponding number of mortgage credit contracts.

Interest Rates

Questions (131)

Michael McGrath

Question:

131. Deputy Michael McGrath asked the Minister for Finance the estimated impact of a 1% increase in ECB interest rates on interest owed on tracker mortgages here; and if he will make a statement on the matter. [6968/18]

View answer

Written answers

The Central Bank has advised that it published a research paper in December 2017 entitled, 'Resolving a Non-Performing Loan crisis: The ongoing case of the Irish mortgage market', which provides information relevant to the Deputy's request.

One of the issues this paper investigates is the impact of a 200bps increase in the interest rate on trackers on mortgage repayments specifically for Primary Dwelling Houses. The research demonstrated that in the event of such an increase in rates the ratio of payments for many borrowers will be between 10 and 30 per cent greater than currently. (Please refer to Figure 13. - https://www.centralbank.ie/docs/default-source/publications/research-technical-papers/10rt17---resolving-a-non-performing-loan-crisis-the-ongoing-case-of-the-irish-mortgage-market.pdf)

For the Deputy's information, the following table provides examples of the effect a hypothetical 100bps increase in mortgage rates would have on 100k, 200k and 300k mortgages at various terms remaining, where the rate goes from 1% to 2%.

Figure: Payment Changes for various terms for 100k mortgage

Months

Pre

Post

Diff

Cumulative increase

120

€875.84

€919.32

€43.48

€5,217.66

180

€598.29

€642.68

€44.38

€7,988.62

240

€459.69

€505.03

€45.34

€10,880.47

300

€376.67

€422.97

€46.31

€13,892.18

360

€321.43

€368.71

€47.28

€17,022.43

Figure: Payment Changes for various terms for 200k mortgage

Months

Pre

Post

Diff

Cumulative increase

120

€1,751.69

€1,838.65

€86.96

€10,435.32

180

€1,196.59

€1,285.35

€88.76

€15,977.24

240

€919.38

€1,010.05

€90.67

€21,760.95

300

€753.33

€845.95

€92.61

€27,784.36

360

€642.86

€737.43

€94.57

€34,044.85

Figure: Payment Changes for various terms for 300k mortgage

Months

Pre

Post

Diff

Cumulative increase

120

€2,627.53

€2,757.97

€130.44

€15,652.98

180

€1,794.88

€1,928.03

€133.14

€23,965.86

240

€1,379.07

€1,515.08

€136.01

€32,641.42

300

€1,130.00

€1,268.92

€138.92

€41,676.54

360

€964.29

€1,106.14

€141.85

€51,067.28

Property Tax

Questions (132)

Seán Haughey

Question:

132. Deputy Seán Haughey asked the Minister for Finance his plans to reform the local property tax; if his attention has been drawn to the fact that the system is unfair to persons living in the greater Dublin area; and if he will make a statement on the matter. [6989/18]

View answer

Written answers

I recently announced a review of the Local Property Tax (LPT) which will look in particular at the impact on LPT liabilities of property price developments. It will include an examination of the outstanding recommendations of the 2015 Thornhill review of the Local Property Tax. It is expected that the review will be completed at the end of August and that the review report will provide a number of policy choices for consideration. The review will be informed by the desirability of achieving relative stability, both over the short and longer terms, in LPT payments of liable persons. It will also include a consultation process to enable all interested parties and individuals to submit their views on the future of the LPT.

Insurance Costs

Questions (133)

Michael McGrath

Question:

133. Deputy Michael McGrath asked the Minister for Finance when the cost of insurance working group's fourth progress update on quarter four of 2017 will be published; and if he will make a statement on the matter. [6990/18]

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Written answers

I expect to be in a position to approve the publication of the fourth quarterly update report in the coming days. The Deputy will be aware that the Report on the Cost of Motor Insurance was published in January 2017 and made 33 recommendations with 71 associated actions to be carried out in agreed timeframes, as set out in an Action Plan. There have been three quarterly updates published to date.

By way of further information, the fourth quarterly update report will provide details on how the implementation of the recommendations is progressing, with a particular focus on the fourteen action points which were due for completion during the fourth quarter. I understand that the majority of the fourteen actions due for completion during this quarter have been completed. The Update Report will also include a summary review of the implementation of the recommendations addressed to the various Departments and Bodies which are represented on the Cost of Insurance Working Group, with the aim of providing an overview of the work each has undertaken during 2017.

VAT Yield

Questions (134, 135)

Joan Burton

Question:

134. Deputy Joan Burton asked the Minister for Finance the VAT received by the Revenue Commissioners in respect of electronic services provided to unregistered customers resident in other EU states (details supplied) in each of the months between January 2017 and January 2018, inclusive, in tabular form; and if he will make a statement on the matter. [7036/18]

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Joan Burton

Question:

135. Deputy Joan Burton asked the Minister for Finance if he has revised the expected gain to the Exchequer in 2018 arising out of the right to retain a proportion of the VAT paid on certain services provided to unregistered customers in other member states, which has been assumed in his Department's estimates of tax yield for 2018, in view of the recent statement by a person (details supplied) expecting growth of around 90% in cloud services; and if he will make a statement on the matter. [7037/18]

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Written answers

I propose to take Questions Nos. 134 and 135 together.

On 1 January 2015 new EU VAT rules came into effect changing the place where VAT is chargeable in respect of all supplies of telecommunications, broadcasting and electronic (TBE) services to consumers. VAT on these services is now chargeable where the consumer is located instead of where the supplier is located.

As a result of the change, EU and non-EU businesses are required to register and account for VAT in every Member State in which they supply TBE services to consumers or, alternatively, to avail of the optional special scheme known as the Mini One Stop Shop (MOSS).

MOSS is a simplification scheme that allows a business engaged in TBE supplies to register in a single Member State, to file a single quarterly return and pay its VAT liability for all Member States through a web portal in the Member State of registration. This enables suppliers to avoid having to register and account for VAT in all the Member States to which they make TBE supplies.

Transitional rules for the period 2015-2018 provide that the Member State of registration may retain a percentage of the VAT collected for other Member States, with the retention percentage being 30% in 2015 and 2016 and 15% for 2017 and 2018. Therefore the final retention fee payment in respect to VAT retained by Ireland from VAT revenues collected in respect of supplies to other Member States through the MOSS system for 2018 will be received in Quarter 1 2019.

I am informed by the Revenue Commissioners that the following table provides an overview of the VAT collected, amount retained and the VAT remitted to each Member State from 1 January 2017 to 31 December 2017. Information for January 2018 is not yet available as these returns are not due until April 2018.

Small variations may be observed between the actual sums collected, retained and remitted due to rounding. Some of these values are provisional and may be subject to future revision.

EU Member State

Gross VAT Received

Amount Retained

VAT remitted

€million

€million

€million

Q1 2017

Q2 2017

Q3 2017

Q4 2017

Q1 2017

Q2 2017

Q3 2017

Q4 2017

Q1 2017

Q2 2017

Q3 2017

Q4 2017

Austria

6.9

7

6.6

7.3

2

1

1

1

4.9

5.9

5.6

6.2

Belgium

8.7

9

8.8

9.5

2.5

1.3

1.3

1.4

6.1

7.7

7.5

8.1

Bulgaria

0.5

0.6

0.6

0.6

0.2

0.1

0.1

0.1

0.4

0.5

0.5

0.5

Croatia

0.6

0.7

0.9

0.9

0.2

0.1

0.1

0.1

0.4

0.6

0.7

0.7

Cyprus

0.3

0.4

0.3

0.4

0.1

0.1

0.1

0.1

0.2

0.3

0.3

0.3

Czech Republic

2.2

2.4

2.4

2.7

0.6

0.3

0.3

0.4

1.6

2

2

2.3

Denmark

12.6

13.2

13.6

14.3

3.7

2

2

2.1

8.9

11.3

11.6

12.2

Estonia

0.3

0.4

0.4

0.4

0.1

0.1

0.1

0.1

0.2

0.3

0.3

0.4

Finland

4.1

4.3

4.1

4.6

1.2

0.6

0.6

0.6

2.9

3.7

3.5

4

France

48.2

53.1

52.8

55

13.9

7.6

7.6

8

34.3

45.5

45.1

47

Germany

61.7

62.6

59.8

65.8

17.5

8.9

8.5

9.2

44.1

53.7

51.3

56.5

Greece

2.3

2.3

2.5

2.4

0.7

0.3

0.4

0.4

1.6

2

2.1

2

Hungary

1.8

1.9

2

2.2

0.5

0.3

0.3

0.3

1.3

1.6

1.7

1.9

Italy

21.6

23.4

23.1

23.1

6.3

3.4

3.4

3.4

15.4

20

19.7

19.8

Latvia

0.4

0.4

0.4

0.4

0.1

0.1

0.1

0.1

0.3

0.3

0.3

0.4

Lithuania

0.4

0.4

0.4

0.4

0.1

0.1

0.1

0.1

0.2

0.3

0.3

0.4

Luxembourg

0.3

0.7

0.9

0.9

0.1

0.1

0.1

0.1

0.2

0.6

0.7

0.8

Malta

0.2

0.3

0.3

0.3

0.1

0

0

0

0.2

0.2

0.2

0.3

Netherlands

14.8

16

15.8

17.4

4.3

2.3

2.3

2.5

10.5

13.7

13.5

14.9

Poland

4.1

4.2

4.4

4.7

1.2

0.6

0.6

0.7

2.9

3.6

3.9

4

Portugal

2.3

2.6

2.7

2.8

0.7

0.4

0.4

0.4

1.6

2.2

2.3

2.4

Romania

1.4

1.4

1.4

1.6

0.4

0.2

0.2

0.2

1

1.2

1.2

1.3

Slovakia

0.8

0.8

0.8

0.9

0.2

0.1

0.1

0.1

0.6

0.7

0.7

0.8

Slovenia

0.3

0.4

0.4

0.4

0.1

0.1

0.1

0.1

0.2

0.3

0.3

0.4

Spain

15.2

17.1

17.8

17.8

4.4

2.5

2.5

2.6

10.8

14.7

15.3

15.2

Sweden

16.4

17.1

16.7

18.7

4.8

2.5

2.4

2.7

11.6

14.7

14.3

16

United Kingdom

113.8

122.2

116.7

119

32.4

17.5

16.6

17

81.5

105

100.1

102.1

In relation to Question 7037-18, regarding the potential growth in cloud computing services as highlighted by the Deputy, MOSS accounts for VAT that is chargeable on business to consumer supplies. VAT on intra-community business to business supplies are accounted for though the normal reverse charging mechanism within each EU Member State. The information furnished by traders on MOSS returns does not require the yield from a particular TBE service to be separately identified. It is therefore not possible to determine the potential additional yield from the supply of cloud computing services to consumers in other EU Member States.

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