Written Answers Nos. 200-219
200. Deputy Catherine Murphy asked the Minister for Finance the type of sports facilities that will remain at the 9% VAT rate for visitor fees; if the 9% VAT rate will be applicable to sports facility memberships in view of changes made in budget 2019; and if he will make a statement on the matter. [43253/18]
View answerAs indicated in my budget speech, there has been no change to the application of the 9% VAT rate in respect of the provision of facilities for taking part in sporting activities including golf or physical education activities. Therefore, the VAT treatment of visitor fees and membership fees has not changed.
201. Deputy Michael McGrath asked the Minister for Finance the reason it is planned to place a cap of €50,000 on the original market value for the extension of benefit-in-kind on electric vehicles; the number of electric cars purchased under benefit-in-kind in 2018; the number of those purchases greater than €50,000; the number of electric vehicles on sale here for €50,000 or less; and if he will make a statement on the matter. [43292/18]
View answer204. Deputy Michael McGrath asked the Minister for Finance the estimated cost in addition to the €3 million provided for in budget 2019 documents if the €50,000 cap is removed for the extension of the 0% benefit-in-kind rate for electric vehicles; and if he will make a statement on the matter. [43340/18]
View answerI propose to take Questions Nos. 201 and 204 together.
Vehicle benefit in kind (BIK) is chargeable where, by reason of employment, a vehicle is made available (without a transfer of ownership) to an employee, and is available either for that individual’s private use or to his/her family or household.
Comprehensive data regarding BIK on company cars does not currently exist and it is not possible to provide precise information in relation to the take-up of the 0% benefit-in-kind rate for electric vehicles or the removal of the €50,000 cap. I have asked my officials to further discuss this matter with Revenue with a view to improving the data quality in this area .
I extended the benefit-in-kind exemption for electric vehicles until 31 December 2021 to support policies to reduce carbon emissions in the transport sector. This forms part of a broader series of measures to support the uptake of electric vehicles, including VRT relief of up to €5,000, an SEAI grant of up to €5,000, very low motor tax of €120 per annum, 50% discount off tolls fees and 0% BIK on electric charging.
Having regard to value for money and tax equity considerations, a cap of €50,000 on this exemption is applied such that an electric vehicle with an original market value exceeding €50,000 will be subject to BIK on the amount in excess of €50,000. The cap will take effect from the 2019 tax year.
In examining value for money and tax equity considerations, the quantum of tax expenditure provided annually to qualifying taxpayers in relation to the use of high end cars must be taken in account. To take the example of an electric vehicle with an original market value of, say, €150,000 that has been purchased by the employer for the use of a Director, where the employer has already benefitted from VRT relief and an SEAI grant. Without the imposition of a €50,000 cap, the tax expenditure on such a vehicle is the equivalent of an annual grant from the taxpayer to the employee or Director of up to €23,400, for a single tax year (i.e. the tax liability of the taxpayer would be reduced by up to this amount in a single tax year). This amount is equivalent to 7 or 8 home insulation grants to low income households under the SEAI Better Energy Warmer Homes Scheme, where the benefit of these grants will last for many years. Or, that the same amount, under the National Fuel Allowance Scheme, is equivalent to an allowance for about 37 low income households for one year.
I am encouraged by the fact that registrations of new electric vehicles has doubled in the year to September and am satisfied that the cap has been set at a reasonable level which maintains a strong incentive for the take-up of electric vehicles while having due regard for value for money and tax equity.
202. Deputy Jonathan O'Brien asked the Minister for Finance the reason the quantity of Ireland State Savings prize bonds prizes in a fiscal year has decreased while income for same has increased. [43322/18]
View answerI am answering this question on the basis of fiscal year 2017. Under Prize Bonds the number of prizes is determined by a variable percentage rate applied to the value of Prize Bonds outstanding. The variable percentage rate set to calculate the Prize Bond Fund was adjusted from 0.85% to 0.50% in August 2017. The interest rate reduction reflected changes across the retail savings market and the fall in the cost of borrowing by the State. All changes in rates seek to maintain the balance of remaining competitive, providing good value for the holders of Prize Bonds while also remaining conscious of the cost to the taxpayer.
Notwithstanding the decline in the variable percentage rate, the balance of savings in Prize Bonds increased by approximately €0.3 billion to €3.2 billion in 2017, which was an increase of 10%.
203. Deputy Pearse Doherty asked the Minister for Finance if the Revenue Commissioners' tender for a report was completed (details supplied); if so, when the report was compiled and published; and if he will make a statement on the matter. [43324/18]
View answerI am advised by the Revenue Commissioners that, following a submission by the Irish Health Trade Association (IHTA) concerning the distinction between food supplements that the Revenue Commissioners was prepared to accept as liable to VAT at the zero rate and those that are liable at the 23% rate, they undertook an in-depth review of the issue. As part of this review, an expert in the field of food science was engaged to produce a report on the definition of food and the relationship of food supplements to food. I understand that as part of this review a submission was made by the IHTA. The expert report was finalised in October 2017 and formed the basis for further consultation with the IHTA.
The Revenue Commissioners has also advised me that to date they have not amended their guidance in relation to the VAT treatment of food supplement type products and has not published the report. Currently, the report is part of a deliberative process and the Revenue Commissioners will publish the report after this process has concluded.
205. Deputy Robert Troy asked the Minister for Finance the reason an electricity upgrade in relation to a new line and meter box is not covered by the HRI in view of the fact that it is part of home renovations; and if he will make a statement on the matter. [43376/18]
View answerThe Home Renovation Incentive (HRI) provides a tax relief by way of an income tax credit on repair, renovation or improvement works on principal private residences or rental properties carried out by tax compliant contractors.
However, the Deputy's question does not give sufficient information to enable me give a comprehensive reply. Revenue advise me that the individual concerned may provide the full information to it via MyEnquiries, which is an online service that allows customers to securely send correspondence to Revenue. MyEnquiries can be accessed from the Revenue website www.revenue.ie either through myAccount or through ROS (Revenue’s Online Service), depending on whether the claimant is a PAYE taxpayer or a self-employed taxpayer.
I am further advised by Revenue that full details on the operation of the HRI scheme are available on its website at: http://www.revenue.ie/en/tax/it/reliefs/hri/index.html.
206. Deputy Mattie McGrath asked the Minister for Finance the details of engagements, meetings or correspondence that he has had with a person (details supplied) in the past three years; and if he will make a statement on the matter. [43393/18]
View answerI would refer the Deputy to my response to PQ 42821 of 18th October 2018, which details my predecessor as Minister for Finance's meeting with representatives from Enet in the Department of Finance on Wednesday 14 December 2016 with officials in attendance.
Although not a request on behalf of Mr David McCourt and outside the three year period stipulated in the question a meeting request on behalf of Mr Conal Henry, CEO of Enet was received and declined by my predecessor on June 12th 2015. The meeting was declined due to the Minister's heavy schedule at that point in time.
207. Deputy Louise O'Reilly asked the Minister for Finance further to Parliamentary Question Nos. 82 and 83 of 10 May 2018, his plans to reduce the rate of VAT on defibrillators in 2022 when the new amended VAT directive is expected to take effect; if preparatory work will be undertaken before then to ensure this can take effect immediately; if so, the details of the work; and if he will make a statement on the matter. [43402/18]
View answer208. Deputy Louise O'Reilly asked the Minister for Finance further to Parliamentary Question Nos. 82 and 83 of 10 May 2018, if there is facility for a similar measure to be applied here in terms of VAT reduction on defibrillators in the interim as has happened in Belgium (details supplied) in view of the fact that the new amended VAT directive is expected to take effect in 2022; and if he will make a statement on the matter. [43403/18]
View answerI propose to take Questions Nos. 207 and 208 together.
Defibrillators, other than implantable defibrillators, are liable to VAT at the at the standard rate, currently 23%, and, in the absence of a change in the VAT Directive, there is no legal basis for reducing this rate.
In my response to Parliamentary Questions Numbers 82 and 83 of 10 May 2018, I referred to the Commission’s plans to introduce legislation that would allow Member States more flexibility in how they apply VAT rates while also seeking to ensure that the VAT base is protected. That proposal has been presented to the EU Council but detailed discussions have not yet commenced. The outcome of these discussions and eventual adoption of the proposed legislation will clarify and establish the full scope available to Member States to alter the VAT rating of goods and services.
As the Deputy is aware, the proposal must be agreed unanimously by all Member States before being adopted. As previously stated, it is expected that fundamental changes such as those proposed will be the subject of intense discussion and negotiation before legislative changes are adopted and it is not possible at this stage to predict the degree of discretion that will be available to Member States in relation to the setting of rates of VAT on any category of goods. Accordingly, I have no plans to undertake a review of VAT rate changes that might be possible until the proposed legislative changes are fully agreed upon and adopted.
209. Deputy Peter Burke asked the Minister for Finance the anticipated yield for each of the years 2020 to 2024 if the carbon tax was increased by amounts (details supplied). [43434/18]
View answerI am advised by Revenue that an increase in Carbon Tax from €20 per tonne to €45 per tonne over the years 2020 to 2024 would give the estimated yield for each year as shown in the table. These estimates are based on the current volumes for each commodity and include both Carbon Tax and VAT.
|
|
2020 |
2021 |
2022 |
2023 |
2024 |
|
Carbon Tax Rate |
€25 |
€30 |
€35 |
€40 |
€45 |
|
|
€m |
€m |
€m |
€m |
€m |
|
Estimated Carbon Tax Total Yield (inclusive of VAT) |
533 |
639 |
746 |
852 |
959 |
210. Deputy Robert Troy asked the Minister for Finance the recourse an applicant for the home renovation initiative has if one of the contractors they have used refuses to register online even though they charged 13.5% VAT. [43436/18]
View answerThe Home Renovation Incentive (HRI) is provided for in section 477B of the Taxes Consolidation Act 1997. As the Deputy will be aware, HRI provides a tax relief by way of an income tax credit on repair, renovation or improvement works on principal private residences or rental properties carried out by tax compliant contractors. A key element of obtaining relief is that the contractor must be a qualifying contractor for the purposes of the Incentive. Revenue have advised me that where the contractor does not register as a qualifying contractor, then no relief is due to an individual under the Incentive.
I am also advised by Revenue that their guidance for homeowners includes material on ‘Choosing a HRI contractor’. I understand that the guidance emphasises that it is important for a homeowner to check the Revenue system online to see that the details of works have been entered before the work commences. The guidance states that if a contractor is not a qualifying contractor, he/she will not be able to enter the details on the Revenue online system and that the homeowner will not be able to claim the HRI tax credit. However, if the Deputy knows of a contractor who is not co-operating with an individual to allow them make a claim under HRI, he should provide the relevant details to Revenue.
Details on the operation of the HRI scheme are available on the Revenue website at www.revenue.ie/en/tax/it/reliefs/hri/index.html.
211. Deputy Michael McGrath asked the Minister for Finance the projected structural balance each year from 2019 to 2023 inclusive, both in money terms and as a percentage of GDP; and if he will make a statement on the matter. [43511/18]
View answerI can advise the Deputy that the projected structural balance for each year 2019 to 2023 is detailed in percentage terms in table 1 of the Economic and Fiscal Outlook published as part of Budget 2019.
Estimates of the approximate equivalent levels in nominal terms are presented in tabular form below.
|
|
2019 |
2020 |
2021 |
2022 |
2023 |
|
Structural balance, per cent of GDP |
-0.7 |
0.0 |
0.2 |
1.0 |
1.4 |
|
Structural balance, €m |
-2,390 |
0.0 |
750 |
3,920 |
5,735 |
|
Nominal GDP, €m |
341,475 |
359,975 |
375,775 |
392,225 |
409,725 |
212. Deputy Michael McGrath asked the Minister for Finance the available fiscal stance after annual contributions to the rainy day fund each year to 2023 (details supplied); the projected general Government balance and the structural Government balance in each of the years based on the projections announced on budget day, in tabular form; and if he will make a statement on the matter. [43512/18]
View answerThe projected general government balance and structural balance were published in table 1 of Budget 2019 Economic and Fiscal Outlook. This is reproduced below for the Deputy's convenience.
|
per cent of GDP |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
|
general government balance |
-0.1 |
0.0 |
0.3 |
0.4 |
1.1 |
1.4 |
|
structural balance |
-1.0 |
-0.7 |
0.0 |
0.2 |
1.0 |
1.4 |
I addressed the matter of fiscal stance in responding to the Deputy's questions on 16 October (Dáil No. 169, 170, 171 and 172), which I have reproduced below for the Deputy's convenience.
At present, the fiscal rules - both the structural balance rule and, especially, the expenditure benchmark rule - are not well-suited to guide budgetary policy, given our position in the economic cycle. I highlighted this in the Summer Economic Statement and I note that the Irish Fiscal Advisory Council, in its pre-Budget statement, also highlighted this issue.
Essentially, the problem boils down to the fact that full allocation of 'fiscal space' would lead to a repeat of pro-cyclical budgetary policies that would threaten the living standards of Irish people. Pro-cyclical budgetary policies should be avoided; this is especially true when we are facing serious issues such as the exit of the UK from the European Union (and a non-negligible possibility of a 'disorderly' exit).
With this in mind, the more important framework for guiding fiscal policy is 'fiscal stance' - what is right for the economy at a particular point in time, so as to support sustainable, incremental improvements in public services and living standards.
The correct 'fiscal stance' can only be ascertained once account is taken of the position in the economic cycle. If the economy is operating at full capacity, then it would be incorrect to adopt an expansionary budgetary policy. On the other hand, if there is spare capacity in the economy, then it may be appropriate to use tax and expenditure policy to help absorb the spare capacity.
Given the many issues facing the economy and the heightened level of uncertainty (such as what form the UK's exit from the EU will take), it is only possible to assess the appropriate fiscal stance on a year-to-year basis at present.
213. Deputy Michael McGrath asked the Minister for Finance if under existing domestic and EU VAT law it is possible to apply different rates to different transactions under the same class of activity depending on the value of the business turnover or the value of the individual transaction; and if he will make a statement on the matter. [43517/18]
View answerI am advised by the Revenue Commissioners that existing EU or national VAT law does not provide for VAT registered traders to apply different VAT rates to the same taxable supply based on business turnover or the value of an individual transaction.
I would point out, however, that businesses with a low turnover have the option of remaining unregistered for VAT which means they can be exempt from VAT on any goods and services that they supply. In this circumstances exempt businesses who supply goods valued under €75,000 or services valued under €37,500 in a 12 month period, do not charge VAT on those supplies.
214. Deputy Joan Burton asked the Minister for Finance if he will apportion out the cost to the Exchequer of budget 2018 changes to the standard rate threshold and reduction in the USC rate between income tax cases below €70,000 and above €70,000; and if he will make a statement on the matter. [43524/18]
View answerIt is assumed that the Deputy is referring to the changes made in the recent Budget.
I am advised by Revenue that the table below sets out the estimated cost to the Exchequer of the Budget 2019 changes, on a full year basis, in the manner requested by the Deputy.
|
Gross Income |
Income Tax €m |
USC €m |
|
<€70,000 |
76 |
62 |
|
>€70,000 |
84 |
60 |
|
Total |
161 |
123 |
The estimates are based on tax units. The Deputy will be aware that jointly assessed couples/partners are considered a single tax unit, which includes the combined income of both individuals. The calculations have been generated by reference to 2019 incomes on the basis of actual data for the year 2016, the latest year for which returns are available, and adjusted for income, self-employment and employment trends in the interim. They are however provisional and may be revised.
215. Deputy Michael McGrath asked the Minister for Finance if he will address a matter raised in correspondence (details supplied) regarding VAT; and if he will make a statement on the matter. [43634/18]
View answerThe VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. Under Irish legislation, professional medical care services, recognised as such by the Department of Health and Children, are exempt from VAT.
Professional medical care services recognised by the Department of Health and Children are generally those medical care services supplied by health professionals who are enrolled, registered, regulated, or designated on the appropriate statutory register provided for under the relevant legislation in force in the State or equivalent legislation applicable in other countries. This includes health professionals registered under the Medical Practitioners Act 2007, the Nurses Act 1985 and those engaged in a regulated profession designated under Section 4 of the Health and Social Care Professionals Act 2005.
Psychotherapy and counselling services are not recognised as a regulated profession under the Health and Social Care Professionals Act 2005 and are therefore precluded from coming within the scope of the exemption. Psychotherapy and counselling services are, however, applied at the reduced rate of VAT.
216. Deputy Michael McGrath asked the Minister for Finance the steps he has taken to date to recruit extra staff for the Revenue Commissioners to deal with Brexit; when the first recruits will join; the length of training that will be required for these new staff; the number that will be in place as at 29 March 2019; and if he will make a statement on the matter. [43672/18]
View answer217. Deputy Michael McGrath asked the Minister for Finance the number of extra staff the Revenue Commissioners requires by 29 March 2019 in the event of a no-deal Brexit with no transition period; and if he will make a statement on the matter. [43673/18]
View answer218. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question Nos. 166, 168, 169 and 173 of 2 October 2018, the breakdown of the functions to which these 600 staff will be assigned; when the Revenue Commissioners require to have these staff in place; and if he will make a statement on the matter. [43674/18]
View answer219. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question Nos. 166, 168, 169 and 173 of 2 October 2018, if this includes veterinary inspectors; and if he will make a statement on the matter. [43675/18]
View answerI propose to take Questions Nos. 216 to 219, inclusive, together.
I am advised by Revenue that they have a detailed framework in place to recruit additional resources for Brexit in line with the Government decision of September 2018. Revenue have determined that they will require an additional 600 staff as a result of Brexit. This is based on the central case scenario of an orderly withdrawal, to include a transition period to the end of 2020, followed by a comprehensive future trading relationship between the EU and the UK. The work to be undertaken by these staff will include support for trade facilitation measures and the operation of customs checks and controls where this is necessary.
Internal, interdepartmental and open recruitment campaigns are underway. An open recruitment campaign undertaken by the Public Appointments Service commenced on 11 September 2018 and attracted in excess of 3,000 applications. Interviews for this campaign commenced on 20 October 2018. Those considered suitable will proceed directly into an initial five week training and mentoring programme.
I am advised by Revenue that they are confident that plans are fully on track for the first 200 additional trade facilitation staff to be trained and in place by 29 March 2019.
The remaining 400 customs officials will be recruited during the transitional period to the end of 2020. Revenue are continuing to consider various measures that could be employed should additional staff be required for March 2019, including the acceleration of interdepartmental and open recruitment and the redeployment of existing Revenue staff.
Revenue’s preparations are focused on facilitating trade on an East-West basis and I am advised that staff will be assigned, and redeployed as necessary, to best service this requirement.
I wish to confirm that the information previously provided pertains only to the recruitment of customs officers. Recruitment of veterinary inspectors is a matter for my colleague, the Minister for Agriculture, Food and the Marine.
