Fiona O'Loughlin
Question:127. Deputy Fiona O'Loughlin asked the Minister for Finance the buildings owned by NAMA in Newbridge, County Kildare; and if he will make a statement on the matter. [41863/19]
View answerNAMA Portfolio
Questions (127)
Written answers
As the Deputy may be aware, NAMA does not own property, rather NAMA has acquired loans for which properties act as security. I am advised by NAMA that its debtors and receivers control a small number of properties in Newbridge, County Kildare.
Under Sections 99 and 202 of the NAMA Act, NAMA is prohibited from disclosing confidential debtor information, including information on the location and type of assets owned by debtors. It is therefore not possible to identify particular assets which secure NAMA loans in Newbridge as to do so would identify the owners as NAMA debtors.
Tax Reliefs Data
Questions (128)
Catherine Martin
Question:128. Deputy Catherine Martin asked the Minister for Finance further to Parliamentary Question No. 108 of 17 September 2019, the number of properties that have been converted from purpose-built student accommodation to private rented accommodation following the end of the ten-year stipulation under section 50 of the Finance Act 1999; and if he will make a statement on the matter. [42202/19]
View answerWritten answers
Section 50 of Finance Act 1999 provided for a student accommodation scheme whereby expenditure incurred on student rental accommodation can be set against the rental income from the property and against other Irish rental income, thus reducing the taxable income of the person incurring the expenditure. The relevant provisions in the Taxes Consolidation Act 1997 are contained in Part 10,Chapter 11, sections 372AK to 372AV.
The scheme has now terminated, in so far as the termination date for incurring qualifying expenditure has now passed. The qualifying period applied up to 31 December 2006, although under certain circumstances the qualifying period could be further extended to 31 July 2008. Claims in relation to qualifying expenditure incurred before the termination date may continue to arise.
I am advised by Revenue that the number of properties availing of tax relief for student accommodation, up to the most recent year for which data are available, is as follows:
|
Year |
Uptake |
|
2017 |
246 |
|
2016 |
292 |
|
2015 |
361 |
|
2014 |
414 |
|
2013 |
537 |
|
2012 |
606 |
|
2011 |
640 |
Information on the number of properties that have been converted from purpose-built student accommodation to private rented accommodation following the end of the ten-year stipulation is not available from tax returns.
Insurance Costs
Questions (129)
Éamon Ó Cuív
Question:129. Deputy Éamon Ó Cuív asked the Minister for Finance the progress made to date in controlling spiralling insurance costs; the average increase in insurance costs in each of the years 2010 to 2018 and to date in 2019; the proposed further steps to be taken in 2020 to deal with this issue; and if he will make a statement on the matter. [42214/19]
View answerWritten answers
At the outset, it is important to note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation and my Department does not collect or publish the type of information being sought by the Deputy. However, the Central Statistics Office, does track the cost of insurance to consumers as part of the Consumer Price Index (CPI).
My officials advise me that the CPI statistics include price indices for certain types of insurance, such as health insurance, insurance related to a dwelling (property insurance), and motor insurance. They would note however that it would be difficult to determine a meaningful figure for the increase or decrease in overall insurance costs as each type of insurance may not necessarily reflect an overall average figure. However, with regard to the types of insurance with which I have policy responsibility for, I understand that the overall increase as per CSO data over the period requested for motor insurance is approximately 22.5% and for property insurance is approximately 19%. The Deputy will appreciate that for motor insurance, this doesn’t reflect the fact that prices fell in the early part of the decade, increased substantially between 2013 and 2016, and have since fallen 24% from their peak. With regard to the figures for motor insurance between 2018 and 2019, the cost of motor insurance has decreased by 8.3% and the cost of property insurance has increased by 2.6%. I would note however that insurance costs to businesses are not tracked through the CPI index therefore it is not possible to provide information on employer and public liability insurance.
Notwithstanding the limitations of the figures above, it is widely recognised that there have been issues around the cost and availability of insurance in more recent years, particularly with regard to motor, and employer and public liability insurance. This is why the Government established the Cost of Insurance Working Group in 2016. It has produced two reports, the Cost of Motor Insurance Report and the Cost of Employer and Public Liability Insurance Report, and is continuing to work to implement the recommendations of each report. Its most recent Progress Update was published in July and shows that the vast majority of recommendations and actions due by Q2 2019 have been completed. Going forward, there are some further measures that will be carried out by Government over the next few months and into 2020. These include the following:
- Commencement of the remaining parts of the Judicial Council Act 2019, which provides for the establishment of a Personal Injuries Guidelines Committee. It is now matter for the Judiciary to put in place the Judicial Council and to operationalise the Personal Injuries Guidelines Committee, which will introduce new guidelines to replace the Book of Quantum; this is an essential step if award levels are to be reduced.
- The completion of the Central Bank’s feasibility study into adding Employer and Public Liability insurance to the National Claims Information Database (NCID). In addition, the first report of the NCID, on motor insurance, is due by the end of the year;
- The completion of the CSO’s feasibility study into tracking the cost of business insurance, as it does with other forms of insurance including motor. The CSO is due to report back to my Department by the end of the year;
- The Law Reform Commission’s work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries. It is expected that there will be a public consultation on this by the end of the year; and,
- The furtherance of measures necessary to implement Pre-Action Protocols (PAPs) for personal injury cases, beginning with medical negligence cases.
Finally, as mentioned above in the context of the commencement of the Judicial Council Act 2019, it is recognised that the single most essential challenge to be addressed, if we are to overcome issues regarding the cost and availability of insurance, is a sustainable reduction in insurance costs, in particular award levels. In this regard, this Act provides for the establishment of a Personal Injuries Guidelines Committee upon the formal establishment of the Judicial Council. This Committee is tasked with introducing new guidelines to replace the Book of Quantum. While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly.
Carbon Tax Implementation
Questions (130)
Maureen O'Sullivan
Question:130. Deputy Maureen O'Sullivan asked the Minister for Finance the impact assessments his Department has carried out regarding increased carbon taxes; and his views on the various NGO reports that estimate that those least well off in society are the most impacted by carbon taxes such as the one introduced in budget 2020. [42290/19]
View answerWritten answers
As part of a joint research programme between the Department of Finance, the Revenue Commissioners and the Economic and Social Research Institute (ESRI), the ESRI published research on the impacts of increases in the carbon tax, including distributional impacts. This research paper can be accessed at: https://www.esri.ie/publications/the-economic-and-environmental-impacts-of-increasing-the-irish-carbon-tax.
I recognise that the research points to carbon tax increases disproportionately impacting low income households. In order to minimise the impact of the increase on heating costs, I have delayed the increase on home heating fuels until 1st May 2020. I am also increasing the fuel allowance by €2 per week. This increase applies from the first of January 2020 and means an annual increase of €56 to each household. Based on the findings from the aforementioned ESRI research, this will leave the 370,000 households who are in receipt of the fuel allowance better off than before the increase in the carbon tax. This ensures that the most vulnerable in society are protected from the increased carbon tax.
Alongside this I am providing increases to programmes that help to address the causes of fuel poverty. The Warmer Homes scheme provides free energy efficiency upgrades to households deemed to be in or at risk of energy poverty. This reduces the energy required to heat a home adequately, thus reducing a household’s exposure to increases in energy costs. This will be more effective in the long run at reducing heating costs than increases in the fuel allowance. An extra €13m will be provided for this scheme in 2020, bringing its total budget allocation for the year to over €50m.
These measures will help to protect the most vulnerable in society from the impact of the carbon tax increases in the short, medium and long term.
Carbon Tax Implementation
Questions (131)
Maureen O'Sullivan
Question:131. Deputy Maureen O'Sullivan asked the Minister for Finance his views on whether it is necessary to introduce legislation to ensure that revenues raised from carbon duty measures to combat climate change will be ring-fenced for just transition and climate mitigation as he indicated. [42292/19]
View answerWritten answers
In Budget 2020 I announced that the revenues from the increase in the carbon tax from €20 to €26 per tonne CO2 would be ring fenced and the funds used to:
- Protect the most vulnerable in society;
- Just Transition; and
- Investing in low carbon transition
On 9 October 2019, the Department of Public Expenditure and Reform published "The carbon tax increase - what it will be spent on", which sets out specific details in relation to where the ringfenced monies will be going. This can be accessed at: https://assets.gov.ie/35942/a72c67a62786496686fa9257b3f6fa64.pdf
These are increases that would not have taken place in the absence of an increase to the carbon tax and the increased funding is additional to that provided by the National Development Plan. All funds are ring-fenced for these schemes only. Departments will not be allowed to use the carbon tax revenues for any other purpose, other than those schemes detailed below. This guarantees that all funds raised by the carbon tax will go towards climate action.
I am satisfied that this approach will enable the continued ringfencing of additional carbon tax revenues to just transition and climate mitigation areas in future years.
Corporation Tax Regime
Questions (132, 156, 157)
Michael McGrath
Question:132. Deputy Michael McGrath asked the Minister for Finance if he will provide an outline of the OECD corporate tax proposals; and if he will make a statement on the matter. [42349/19]
View answerMichael McGrath
Question:156. Deputy Michael McGrath asked the Minister for Finance the fiscal impact in monetary terms of the new corporate tax proposals put forward by the OECD; if this is not possible at this stage when he expects to have such an analysis completed; and if he will make a statement on the matter. [42341/19]
View answerMichael McGrath
Question:157. Deputy Michael McGrath asked the Minister for Finance the process and timelines now that the OECD has put forward proposals on corporate tax reform; if this will involve all countries signing up to the proposals; the result if all countries do not sign up to the proposals; the result if only a majority of countries sign up; if countries that do not sign up can ignore the proposals; and if he will make a statement on the matter. [42342/19]
View answerWritten answers
I propose to take Questions Nos. 132, 156 and 157 together.
The OECD is currently undertaking a significant project to address the tax challenges of the digital economy. The work is being divided across two Pillars – Pillar One and Pillar Two.
I understand that the deputy is referring to the public consultation document published on 9 October in respect of the ‘Pillar One’ proposals. The consultation paper outlines a proposed ‘Unified Approached” developed by the OECD Secretariat after continuous consultation with countries.
The work under ‘Pillar One’ focuses on the distribution of taxing rights in respect of highly digitalised activities and seeks to undertake a coherent review of the profit allocation and nexus rules used in the existing international tax framework. There has been three differing proposals under discussion and this unified approach is an attempt to find consensus based on the common features of those proposals.
The unified approach is an OECD Secretariat proposal to allow for discussion and to form the basis for future negotiation between countries. The unified approach has been referred to by the OECD as “sketching the first draft of an architecture” of an eventual solution. While the unified approach represents an advancement of the Pillar One proposals, there are significant remaining questions and a huge amount of technical consideration and discussion is still needed.
The detail of the proposal is set out in the OECD public consultation document which is available at: http://www.oecd.org/tax/beps/public-consultation-document-secretariat-proposal-unified-approach-pillar-one.pdf
In summary, the OECD document proposes creating a new taxable nexus for certain highly digitalised consumer facing businesses and rules for calculating how much profit should be considered to relate to this new nexus. At the same time, the approach largely retains the current transfer pricing rules based on the arm’s length principle but complements them with new solutions in areas where tensions in the current system are the highest.
The proposal also seeks to increase tax certainty for taxpayers and tax administrations by agreeing rules on how the tax due in respect of marketing and distribution functions should be calculated.
At this early stage it is not possible to estimate the potential impact in monetary terms of the implementation of any outcome which may eventually be agreed at the OECD. Technical working parties at the OECD are examining the various issues in detail and no decisions have yet been made. Work on estimating any potential impact is underway by my Department and the Revenue Commissioners and this work will continue to evolve as the proposal develops. Currently however there is insufficient clarity to properly assess the potential impact on tax revenues of any of the proposals under discussion at the OECD. Ultimately any monetary impact will depend on the detail of whatever is actually agreed globally.
Regarding the issue of whether all countries must sign up to the proposal, the OECD operates on the basis of consensus. It is hoped and envisaged that a consensual agreement is reached that all members of the BEPS Inclusive Framework will sign up to. Where all countries do not sign up to a final proposal, this may damage the effectiveness of any agreement, and may result in further fragmentation to the international tax system with the potential for double taxation.
Ultimately, any changes will also need to be implemented by countries for them to be effective, either through domestic law changes or via multilateral instruments similar to the OECD BEPS Multilateral Instrument.
In terms of timelines, the OECD’s ambition is to seek political agreement during 2020 although further technical work and work in respect of implementation is likely to continue over a longer period.
A further public consultation will be launched on the separate 'Pillar Two proposals' in mid-November.
Ireland recognises that further change to the international tax framework is necessary to ensure that we reach a stable global consensus for how and where companies should be taxed. A certain, stable, and globally agreed international tax framework is vital to facilitate cross border trade and investment. We remain convinced that the OECD BEPS Inclusive Framework is the correct forum for this work to be carried out. There are a variety of views at the OECD table and the eventual outcome of the work will need to strike a balance to reflect these differing perspectives.
Tax Exemptions
Questions (133)
Michael Healy-Rae
Question:133. Deputy Michael Healy-Rae asked the Minister for Finance if exemptions can be made in the case of a person (details supplied); and if he will make a statement on the matter. [41613/19]
View answerWritten answers
I am advised by Revenue that two specific reliefs are provided for in section 134(1), Finance Act 1992 in respect of persons transferring their residence to the State and transferring a business into the State. Qualifying conditions are set out in Statutory Instrument No. 59 of 1993 Vehicle Registration Tax (Permanent Reliefs) Regulations, 1993 in respect of transfer of residence (regulation 4) and transfer of business (regulation 5).
In general, where a person is transferring their residence they must show to the satisfaction of Revenue that they have had possession and use of the vehicle for greater than six months prior to the transfer in the UK. In respect of a transfer of business, a vehicle may avail of the tax relief if it has been used by the business that is transferring for a period of at least twelve months prior to the date of ceasing business in the UK and starting up a similar activity in the State. In respect of the transfer of residence or a transfer of business, the vehicle must be brought into the State within twelve months.
Where Revenue finds that the conditions for the relief involved have not been met then it will point out the shortcomings in the application to the applicant and try to resolve them. Where it cannot be resolved to Revenue's satisfaction then the application for relief from the tax will not be allowed. If the deputy wishes to provide more details of this particular case, my officials can refer the matter to Revenue for direct reply.
Further information on the reliefs can be found on the Revenue website at the following link: https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/reliefs-and-exemptions/index.aspx and in respect of appeals at https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/appeals/index.aspx.
Tax Data
Questions (134, 135, 136)
Pat Buckley
Question:134. Deputy Pat Buckley asked the Minister for Finance the amount of revenue raised from taxation on rental income in each of the years 2011 to 2018 and to date in 2019, in tabular form. [41670/19]
View answerPat Buckley
Question:135. Deputy Pat Buckley asked the Minister for Finance the number of persons who reported and-or paid taxation on rental income in each of the years 2011 to 2018 and to date in 2019, in tabular form. [41671/19]
View answerPat Buckley
Question:136. Deputy Pat Buckley asked the Minister for Finance the number of persons who declared overall losses on a rental property in each of the years 2011 to 2018 and to date in 2019, in tabular form. [41672/19]
View answerWritten answers
I propose to take Questions Nos. 134 to 136, inclusive, together.
Regarding the Deputy's question on the amount of revenue raised from taxation on rental income in each of the years 2011 to 2018 and to date in 2019, I am informed by Revenue that income tax is calculated on the total income of a taxpayer; total income can arise from multiple income sources that are not separately identified on tax returns. For this reason, it is not possible to separately identify tax revenue arising from rental income.
Regarding the Deputy's question on the number of persons who reported and/or paid taxation on rental income in each of the years 2011 to 2018 and to date in 2019, the following table contains data in respect of income taxpayers up to 2017 (the latest year for which data are currently available).
Number of Taxpayer Units* declaring rental income
|
Year |
Irish Rental Income |
Foreign Rental Income |
|
2017 |
195,200 |
15,200 |
|
2016 |
193,100 |
15,800 |
|
2015 |
183,500 |
15,300 |
|
2014 |
178,500 |
15,900 |
|
2013 |
166,700 |
16,300 |
|
2012 |
157,900 |
16,500 |
|
2011 |
149,400 |
16,500 |
* Jointly assessed couples are counted as one taxpayer unit
Regarding the Deputy's question on the number of persons that declared overall losses on a rental property in each of the years 2011 to 2018 and to date in 2019, the following tables include: the numbers of income taxpayers that declared losses on rental income from 2011 to 2017; and those using losses carried forward from a previous year. The information provided is up to 2017 (the latest year for which data are currently available).
Number of Taxpayer Units with rental income with no profit declared
|
Year |
Irish Rental Income |
Foreign Rental Income |
|
2017 |
13,300 |
2,500 |
|
2016 |
13,900 |
2,700 |
|
2015 |
15,300 |
2,900 |
|
2014 |
17,600 |
3,200 |
|
2013 |
19,100 |
3,500 |
|
2012 |
20,400 |
3,900 |
|
2011 |
21,500 |
4,300 |
Number of Taxpayer Units declaring unused losses from a prior year
|
Year |
Irish Rental Income |
Foreign Rental Income |
|
2017 |
20,000 |
4,100 |
|
2016 |
23,300 |
4,400 |
|
2015 |
26,000 |
4,400 |
|
2014 |
28,500 |
4,800 |
|
2013 |
29,600 |
5,000 |
|
2012 |
30,000 |
5,000 |
Insurance Coverage
Questions (137)
Willie O'Dea
Question:137. Deputy Willie O'Dea asked the Minister for Finance his plans to assist persons who are endeavouring to ensure their properties against loss and damage in view of the fact that there are a number of houses of long standing in Limerick city and its environs in areas that have now been designated as a flood plain as a result of which the owners cannot obtain house insurance; and if he will make a statement on the matter. [41741/19]
View answerWritten answers
The Deputy will be aware that the provision of insurance is a commercial matter for insurance companies, which is 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 I, as Minister for Finance, 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 (Solvency II Directive) which expressly prohibits Member States from doing so.
Having said that, 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.
In May last year, the OPW completed the most extensive and comprehensive study on flood risk through the National Catchment-based Flood Risk Assessment and Management (CFRAM) Programme which identified the flooding risk to 300 communities. The Flood Risk Management Plans prepared under the CFRAM Programme identify 118 flood relief schemes in addition to the 35 flood relief projects that are already in design and development under the existing capital programme. I have been informed by the OPW that Flood Relief Works have already been completed in a number of areas in Limerick City, including Clancy’s Stand and Harry’s Mall (mid 2000’s) and Howley’s Quay (2012).
Current government policy in relation to increasing flood insurance coverage is focused on the development of a sustainable, planned and risk-based approach to managing flooding problems. This it believes should in turn 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,
- implementation of flood relief management plans by the OPW to implement flood relief schemes, and
- maintaining 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.
This commitment is underpinned by a significant capital works investment programme to be delivered by the OPW and Local Authorities, and 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.
The nature of this arrangement is that, overall, there has been an increase in the provision of flood insurance cover observed in areas protected by these schemes over the period 2015 to 2019, according to Insurance Ireland Flood Survey Results. It should be noted that my Department is continuing to actively examine what can be done to increase the level of cover in areas with demountable defences.
In terms of the use of flood maps and insurance provision, flood maps are community based maps and provide a useful resource for planning and cannot be used for commercial purposes. The Disclaimer and Conditions for Use of OPW Flood Maps on floodinfo.ie includes a provision that users of the website must not use the flood maps, or any other content of the website, for commercial purposes. It should be noted that the insurance industry has informed OPW that it uses its own flood modelling tools for assessing the level of risk that it is willing to underwrite in relation to individual properties, and does not use the OPW Flood Maps to inform its flood modelling.
Finally, you should be aware that a consumer can make a complaint to the Financial Services and Pensions 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 ((01 676 1914 or feedback@insuranceireland.eu).
Insurance Costs
Questions (138)
Noel Grealish
Question:138. Deputy Noel Grealish asked the Minister for Finance the number of businesses impacted by increased employer and public liability insurance; the estimated proportion that could be forced out of business as a result of increased insurance costs over the next couple of years; and if he will make a statement on the matter. [41782/19]
View answerWritten answers
At the outset, it is important to note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation and my Department does not collect the type of information being sought by the Deputy. I understand that the Central Bank does not collect such information either. Therefore, I am unable to provide the Deputy with information on the number of businesses impacted by increased employer and public liability insurance costs, or the number that might be expected to be effected by such increased insurance costs in the next couple of years.
Notwithstanding this, I am very much aware that there are certain businesses that are having difficulties arising from either the affordability or even the availability of insurance, particularly in specific sectors such as leisure, hospitality and recreation. In this regard, the work of the Cost of Insurance Working Group (CIWG), particularly its Cost of Employer and Public Liability Insurance Report highlights these difficulties. Therefore, there is a clear understanding of the impact of this problem on businesses across the country.
Unfortunately, neither I, nor the Central Bank of Ireland, have any direct role over the pricing of insurance products. This position is reinforced by the EU framework for insurance, which expressly prohibits Member States from adopting rules, which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. A further constraint is the fact that, for constitutional reasons, the Government cannot direct the courts as to the award levels that should be applied.
The Deputy should note however that through the work of the CIWG, there is a recognition that the single most essential challenge which must be addressed if we are to overcome the current cost and availability problems is to provide for a sustainable reduction in insurance costs.
In this regard, the establishment of the Personal Injuries Commission (PIC) and the publication of its two reports, which included a benchmarking of award levels between Ireland and other jurisdictions for the first time has been very helpful in identifying the scale of the problem that is faced. This research showed that award levels for soft tissue injuries in Ireland were 4.4 times higher than in England and Wales. The PIC recommended that a Judicial Council be established and that it should compile guidelines for appropriate general damages for various types of personal injury. In carrying out this exercise, the PIC believes that the Judiciary will take account of the jurisprudence of the Court of Appeal, the results of its benchmarking exercise, etc.
As the Deputy is aware, the Government with the support of all parties in the Oireachtas prioritised the passing of the Judicial Council Act 2019. This Act provides for the establishment of a Personal Injuries Guidelines Committee upon the formal establishment of the Judicial Council. This Committee is tasked with introducing new guidelines to replace the Book of Quantum. While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly.
Other steps taken to date to address the cost of insurance include the following:
- The establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance. The Central Bank is due to make its first report by the end of 2019, and will make recommendations to me regarding potentially expanding the scope of the Database to include employer and public liability insurance. I would also note that the CSO is due to report to the CIWG shortly on a final view as regards the feasibility of tracking insurance prices for businesses, following completion of a pilot project it has been conducting on the same;
- Reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019 to strengthen the powers of PIAB around compliance with its procedures;
- Commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to align the timeframes by which claims should be notified to businesses with GDPR time limits on the keeping of CCTV footage to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;
- The reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers, resulting from the failure of Setanta Insurance;
- Various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality, and;
- The commencement and prioritisation by the Law Reform Commission (LRC) of its work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform.
I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from September 2019 show that the price of motor insurance is now 24% lower than the July 2016 peak). The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, particularly those relevant to businesses.
In conclusion, I would like to assure the Deputy that important reforms are taking place and that I am confident that if the level of awards are reduced as a result of the Personal Injuries Guidelines Committee, then the insurance premium and coverage issues that are being experienced by certain businesses should recede.
Departmental Staff Data
Questions (139)
Catherine Murphy
Question:139. Deputy Catherine Murphy asked the Minister for Finance the number of full-time and part-time civil servants his Department has recruited by grade in each of the years 2014 to 2018 and to date in 2019; the number of full-time and part-time civil servants his Department has lost due to retirement by grade in the same period; and if he will make a statement on the matter. [41818/19]
View answerWritten answers
I wish to inform the Deputy that the number of full-time and part-time civil servants the Department of Finance has recruited by grade in each of the years 2014 to 2018 and to date in 2019; the number of full-time and part-time civil servants the Department of Finance has lost due to retirement by grade in the same period is outlined in the attached document.
Tax Data
Questions (140)
Willie O'Dea
Question:140. Deputy Willie O'Dea asked the Minister for Finance the estimated amount it would cost to scrap the 50 cent stamp duty per cheque or bills of exchange; and if he will make a statement on the matter. [41835/19]
View answerWritten answers
I am advised by Revenue that the Stamp Duty charge on cheque payments in 2018 amounted to almost €13 million.
Revenue has also confirmed that the annual cost to the Exchequer would be broadly similar if the charge was abolished.
Universal Social Charge Application
Questions (141)
Robert Troy
Question:141. Deputy Robert Troy asked the Minister for Finance the reason a person (details supplied) did not qualify for the USC charge reduction in 2019. [41839/19]
View answerWritten answers
Section 531AN of the Taxes Consolidation Act (TCA) 1997 provides for a reduced Universal Social Charge (USC) rate of 2% on all income above €12,012, where a person’s total income in a year does not exceed €60,000 and where the person is aged 70 or over or holds a full medical card. A rate of 0.5% on the first €12,012 of income applies to all taxpayers.
Revenue has advised me that it has reviewed the tax position of the person in question for 2015 to 2018 inclusive and to date in 2019 and is satisfied that the reduced rate of USC was applied in each year.
Budget 2020
Questions (142)
Michael McGrath
Question:142. Deputy Michael McGrath asked the Minister for Finance the breakdown of the €30 million measures to support enterprise, SMEs and the agri-sector in the tax policy changes budget 2020 document; and if he will make a statement on the matter. [41997/19]
View answerWritten answers
In Budget 2020 I announced policy changes to a number of taxation measures, to include Income Tax; Corporation Tax; Capital Gains Tax; and Excise Duties, with the objective of supporting Enterprise, SMEs and the Agri-sector. The combined cost (€30 million in 2020) of the policy changes was provided in the Budget 2020 Summary of Taxation Measures document, which was published on Budget day.
Further details of the nature of these policy changes, including a breakdown of the €30 million cost, is provided in the table below.
|
Measure |
Exchequer Cost (€M) |
|
Key Employee Engagement Programme Enhancements to the programme |
0.5 |
|
Employment and Investment Incentive Enhancements to the incentive |
21 |
|
Special Assignee Relief Programme Extension in its present form until 31 December 2022* |
0 |
|
Foreign Earnings Deduction Extension in its present form until 31 December 2022* |
0 |
|
R&D Tax Credit -Enhancements to credit for small and micro companies-Increased third level outsourcing limit |
0 |
|
Microbrewery relief Production ceiling for qualification raised |
0 |
|
Diesel Rebate Scheme Relief for users of the scheme from increase in carbon tax |
4.9 |
|
Betting Tax relief Introduction of a relief from betting duty and betting intermediary duty up to a limit of €50k per calendar year (applying only to single undertakings) |
2.6 |
|
CGT relief for Farm Restructuring Extension in its present form to end 2022 |
1 |
*As matters stand currently, this relief has a sunset clause of 31 December 2020.
Fuel Rebate Scheme
Questions (143)
Michael McGrath
Question:143. Deputy Michael McGrath asked the Minister for Finance the details of the diesel rebate scheme; the annual cost of the scheme; the way in which it compares to the previous rebate scheme; and if he will make a statement on the matter. [41998/19]
View answerWritten answers
The Diesel Rebate Scheme (DRS) was introduced in 2013 and offers a partial refund to qualifying road operators on the excise paid on diesel when the retail price is €1.00 (Vat exclusive) or above. The maximum rebate is 7.5 cents per litre when the retail price is €1.25 (Vat exclusive) or above.
Certain qualifying criteria apply, for example, auto diesel must be purchased in the State, either in bulk (over 2,000 litres) or via a Revenue approved Fuel Card, and used in a qualifying vehicle for the purpose of business transport activities. Operators with a licence issued in other EU Member States are also eligible to claim on diesel purchased in the State subject to meeting all the other scheme criteria.
The cost of this scheme depends upon the average retail price of diesel as well as the uptake of the scheme by qualifying road transport operators. While claims in respect of 413 million litres of diesel were made in respect of 2014, at a total cost of €21 million, the relatively low price of oil in recent years has resulted in low costs for the scheme. The scheme cost €2.4 million in 2018 and €8.4 million in the year to date.
In recognition of the challenges facing the road haulage sector due to the uncertainty surrounding Brexit, I announced in my budget speech that the Diesel Rebate Scheme is being enhanced. The publication of the Finance Bill on Thursday 17th October will set out the details of the enhancements to the Scheme. This is intended as a temporary support measure, to be reviewed as part of the annual budgetary process.
Fiscal Compact Treaty
Questions (144)
Micheál Martin
Question:144. Deputy Micheál Martin asked the Minister for Finance if he and his officials read the analysis piece by a person (details supplied) on the fiscal treaty and the 2012 referendum in particular; his views on same; and if he will make a statement on the matter. [42006/19]
View answerWritten answers
The article to which the Deputy refers concerns the EU fiscal rules, which are a key component of the architecture of European Monetary Union. The rules aim to preserve national fiscal autonomy but, at the same time, to constrain the fiscal stance of individual Member States in order to ensure fiscal sustainability and prevent negative spill-overs to other participants. The EU’s fiscal rules have been an integral part of our own fiscal framework for a number of decades, dating back to the Stability and Growth Pact in 1997. These rules were strengthened following the crisis, including through the Treaty on Stability, Coordination and Governance, which was approved by referendum in Ireland in May 2012.
Of course, no set of rules is perfect and on Budget Day, my Department published a scoping paper entitled Addressing Fiscal Vulnerabilities. Amongst other things, this paper identifies and outlines vulnerabilities arising from the ‘one-size-fits-all’ approach taken by the European fiscal framework. From an Irish perspective, the fact that the rules are formulated in GDP terms is increasingly problematic. As my Department has outlined on many occasions, GDP overstates the ‘true’ size of the Irish economy and, as such, ratios expressed as a share of GDP give a misleading picture.
In addition, the calculation of adherence to the MTO remains troublesome. This requires estimates of the structural budget balance: the headline balance adjusted for the impact of the economic cycle (cyclical component) and excluding temporary measures. The cyclical component, in turn, requires an estimate of the output gap - an unobserved variable that is calculated using a harmonised, one-size-fits-all approach which does not sit well with the Irish economy. The difficulties inherent in the structural balance are well understood in the EU. In many senses, some of these complexities are a necessary evil, as to promote counter cyclical policies, estimates of the cyclical position of the economy are needed. However, Ireland is more affected than most by these issues given the unique aspects of our economy.
These issues notwithstanding, I am encouraged by recent discussions regarding the fiscal rules at EU level. In particular, I support efforts to increase the transparency, predictability and simplicity of the rules. I, along with my officials, will continue to engage in these talks. That said, I do accept that there are difficult trade-offs involved. This means that finding agreement may be challenging. As such, we must continue to consider the domestic application of the existing fiscal rules.
Carbon Tax Implementation
Questions (145)
Michael Fitzmaurice
Question:145. Deputy Michael Fitzmaurice asked the Minister for Finance if the increase in the carbon tax immediately applies to white diesel, green diesel and kerosene; and if he will make a statement on the matter. [42021/19]
View answerWritten answers
The increase in carbon tax applied to auto diesel and petrol from midnight on Budget night. I have delayed the increase on all other fuels which the carbon tax is applied to until May 2020 after the winter heating season.
Carbon Tax Exemptions
Questions (146)
Michael Fitzmaurice
Question:146. Deputy Michael Fitzmaurice asked the Minister for Finance if an exemption exists within the tax system regarding the increase in the carbon tax for an agricultural contractor who is carrying out agricultural work for a farmer; and if he will make a statement on the matter. [42022/19]
View answerWritten answers
In my Budget 2020 speech, I announced an increase from €20 to €26 in the carbon tax. Following the approval of the Dáil, this increase has been applied to Mineral Oil Tax (MOT) rates for mineral oils used as auto-fuels (for cars and trucks) from midnight on 9 October 2019. All other MOT rates remain at their current levels until 1 May 2020 when new rates will take effect subject to the enactment of the Finance Bill 2019.
The current rate of MOT for marked gas oil (MGO), also referred to as “green agricultural diesel”, is €102.28 per 1,000 litres, comprised of a carbon charge component of €54.92 and a non-carbon charge component of €47.36 per 1,000 litres. These rates did not increase from Budget night. From 1 May 2020 the MOT rate for MGO will be €117.78 per 1,000 litres, arising from the increase of the carbon component from €54.92 to €70.42; the non-carbon component will not change from its current level of €47.36 per 1,000 litres.
When carbon tax was increased in Budget 2012, provision was made for a tax relief for farmers to compensate them for the increase. The statutory basis for the tax relief is section 664A of the Taxes Consolidation Act 1997. It is available to individuals and companies that carry on a trade of farming and are entitled to claim an income tax or corporation tax deduction in respect of farm diesel.
Section 664A provides that a farmer may take an income tax or corporation tax deduction for farm diesel (including any carbon tax charged in respect of the diesel) and then a further deduction for farm diesel which is equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at the rate of €41.30 per 1,000 litres of farm diesel (the 2012 baseline). Revenue advise me that agricultural contractors are not entitled to this relief as they are not carrying on a trade of farming. This, they advise, is because farming, which is defined in section 654 of the Taxes Consolidation Act 1997, requires the occupation of farm land and agricultural contracting does not involve the occupation of farm land. However, Revenue agricultural contractors who incur expenses in relation to farm diesel in the course of their trade of agricultural contracting may claim an income tax or corporation tax deduction for those expenses, including any carbon tax charged in respect of the diesel.
Corporation Tax Regime
Questions (147)
Peadar Tóibín
Question:147. Deputy Peadar Tóibín asked the Minister for Finance the effective rate of corporation tax that has been charged to companies here in the past year; the effective rate of corporation tax that has been charged to indigenous businesses in the past year; and the effective rate of corporation tax that has been charged to foreign direct investment companies in the past year. [42026/19]
View answerWritten answers
I am aware that on the matter of the effective corporate tax rate paid by corporations in Ireland, there have been seemingly conflicting figures and methodologies used in reference to Ireland. I would advise the Deputy that significant work has been undertaken on this matter by my own Department, by Revenue and by others.
I am advised by Revenue that the effective rate of Corporation Tax for all companies is set out on page 19 of its report on ‘Corporation Tax 2018 Payments and 2017 Tax Returns’ which is available on the Revenue website at link https://www.revenue.ie/en/corporate/information-about-revenue/research/research-reports/corporation-tax-and-international.aspx.
This paper shows that for the year 2017, the latest year available, the effective rate of Corporation Tax on aggregate net taxable profits, after taking account of various deductions, allowances, charges and reliefs was 10.2 per cent, an increase on the 10 per cent figure recorded for 2016.
The effective tax rate on taxable income, calculated on tax returns filed by foreign owned multinational companies for 2017, is 10.7%. The effective tax rate on taxable income for all other companies for 2017 is 8.6%.
Analysis of effective rates of Corporation Tax for 2018 will be made available in 2020 when all returns for 2018 have been filed and analysed.
The Deputy will also be aware of an analysis undertaken by my Department in 2014, co-authored by Mr Seamus Coffey as an independent academic, which confirmed that the overall effective rate of corporation tax, using the most appropriate methodology, paid by corporations in Ireland is between 10% and 11%.
While these percentages are lower than the 12.5% headline rate, this can be attributed to the availability of the small number of targeted tax measures, such as the Research and Development Tax Credit, available in Ireland that may lower the effective rate of corporation tax paid in Ireland.
Tax Reliefs Costs
Questions (148)
Pearse Doherty
Question:148. Deputy Pearse Doherty asked the Minister for Finance the estimated cost in 2020, 2021 and 2022 of extending the SARP scheme in its present from up to 31 December 2022. [42031/19]
View answerWritten answers
The Special Assignee Relief Programme (SARP) is an income tax incentive designed to help reduce the cost to employers of assigning skilled individuals in their companies from abroad, to take up positions in the Irish-based operations of their employer or an associated company, thereby facilitating the creation of jobs and the development and expansion of businesses in Ireland.
As the Deputy will be aware, earlier this year I commissioned an independent review of SARP. The report of this review (published on Budget day 2019) confirmed the strong policy rationale for the existence and continuation of the relief. Following on from these findings, I announced in my Budget speech that I intend to extend the relief until 31 December 2022.
With regard to the Deputy's specific question, Revenue advise me that it is not possible to estimate accurately the cost of extending the SARP scheme, in its present form, up to 31 December 2022. The reason for this is that there are currently no data available that would enable such calculations to be made.
The Deputy will be aware that in Finance Bill 2018 I re-imposed an upper salary ceiling of €1 million on the relief with effect of 1 January 2019 for new entrants and for existing beneficiaries of the programme from 1 January 2020. Such data as are available within the system relate to years before 2019 (no cap existed between 2015 and 2019). It would therefore be necessary to assess the cost-saving impact of the cap as well as taking account of evolution in the take up of the relief during the current year in order to begin to estimate the savings or costs that might arise in 2020 or subsequent years.
Tax Reliefs Data
Questions (149)
Pearse Doherty
Question:149. Deputy Pearse Doherty asked the Minister for Finance the number of persons that have availed of the SARP scheme in each of the years 2016 to 2018 and to date in 2019; and the number projected to avail of the scheme in 2020, 2021 and 2022. [42032/19]
View answerWritten answers
The Special Assignee Relief Programme (SARP) is an income tax incentive designed to help reduce the cost to employers of assigning skilled individuals in their companies from abroad, to take up positions in the Irish-based operations of their employer or an associated company, thereby facilitating the creation of jobs and the development and expansion of businesses in Ireland.
The number of individuals that availed of the SARP scheme in the years 2016 and 2017 (the most recent year for which data are available) is outlined in the table below:
|
Year |
No. of individuals |
|
2017 |
1,084 |
|
2016 |
793 |
SARP, like all tax expenditure measures, is demand led, and so it is not possible for me to accurately predict future take-up. The extent to which I can rely on retrospective data is limited as it will not reflect the recent changes that I made to the scheme. As the Deputy will be aware, in Finance Act 2018 I re-imposed an upper salary ceiling of €1 million on the relief with effect from 1 January 2019 for new entrants and for existing beneficiaries of the programme from 1 January 2020.
Tax Code
Questions (150)
Peadar Tóibín
Question:150. Deputy Peadar Tóibín asked the Minister for Finance the taxes that are levied on aviation fuel; and the estimated revenue that would be raised by the State if VAT and excise duties were applied to aviation fuel. [42048/19]
View answerWritten answers
Ireland’s excise duty treatment of fuel used for air navigation is based on European law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive. Under this Directive, Member States are obliged to exempt certain fuels used for commercial aviation purposes from excise duty. The scope of this exemption must include jet fuel (which is the most commonly used heavy oil in air navigation) and must encompass such fuel used for intra-Community and international air transport purposes.
A Member State may waive this exemption where it has entered into a bilateral agreement with another Member State to tax fuel for intra-community flights. With regard to fuel for international transport, the scope for a Member State to take a unilateral approach to taxation is limited by international law and a range of bilateral and multilateral agreements that operate under 1944 Convention on International Civil Aviation (known as the Chicago Convention).
VAT is charged on domestic and private usage of jet fuel at the reduced rate of 13.5%, while VAT is charged at the standard rate of 23% on aviation gasoline used for the same purpose. The supply of aviation fuel for international air travel is zero rated and airline tickets are exempt from VAT throughout the EU.
I am advised that consumption data required to estimate the revenue that could be accrued, if the Excise Duty applied fully to aviation fuel with no exemptions, is not readily available. According to the CSO, the revenue foregone due to the excise exemption on aviation fuel was €494 million in 2016. However, this is a theoretical amount that cannot be realised under the current EU and international legislative framework.
Finally, I am informed by Revenue that the breakdown of taxes levied on the different types of aviation fuel as provided for under the Finance Act 1999 and Energy Tax Directive are shown in the table below.
|
Aviation Fuel/Use |
Energy Tax Directive |
Finance Act 1999 |
|
Light oil (aviation gasoline) used for domestic commercial aviation |
No mandatory tax exemption, Member States may opt to exempt or partially exempt |
Partial relief from MOT, effective rate of €369.42 per 1,000 litres (section 97B Finance Act 1999) |
|
Light oil (aviation gasoline) used for intra-Community/international commercial aviation |
No mandatory tax exemption, Member States may opt to exempt or partially exempt |
Partial relief from MOT, effective rate of €369.42 per 1,000 litres (section 97B Finance Act 1999) |
|
Light oil (aviation gasoline) used for private pleasure flying |
Mandatory taxation |
Full MOT rate of €601.69 per 1,000 litres (section 96 Finance Act 1999) |
|
Heavy oil (jet fuel) used for domestic commercial aviation |
No mandatory tax exemption, Member States may opt to exempt or partially exempt |
Full exemption (section 100(2)(b) Finance Act 1999) |
|
Heavy oil (jet fuel) used for used for intra-Community/international commercial aviation |
Mandatory tax exemption, except where bilateral arrangement entered into with another Member State |
Full exemption (section 100(2)(b) Finance Act 1999) |
|
Heavy oil (jet fuel) used for private pleasure flying |
Mandatory taxation |
Full MOT rate of €494.90 per 1,000 litres (section 100(2)(b) Finance Act 1999) |
Central Bank of Ireland
Questions (151)
Noel Grealish
Question:151. Deputy Noel Grealish asked the Minister for Finance the position regarding CP 116; and if he will make a statement on the matter. [42075/19]
View answerWritten answers
CP116 as the Deputy is aware relates to the Central Bank of Ireland’s consultation paper on ‘intermediary inducements- enhanced consumer protection measures’ published in November 2017. In keeping with its mandate to protect the consumers of financial services, the Central Bank reviewed potential risks posed to consumers through the existence of commission arrangements between intermediaries and product producers. The Central Bank consulted with various stakeholders including the broker representative bodies. Officials from my Department also engaged with the Central Bank on CP 116 and they and Minister of State D’Arcy met the broker representative groups on a couple of occasions as part of this overall process. However, it is important to note the independence of the Central Bank in carrying out this role.
In line with Section 117 of the Central Bank Act 1989, the Central Bank consulted with me as Minister for Finance prior to amending the code. They then published, on 25 September 2019, new rules to be included in the Consumer Protection Code 2012 on the payment of commission to financial intermediaries involving new requirements on transparency for consumers and prohibitions on certain types of commission arrangements. The Central Bank will be supervising firms’ compliance with these new rules when they come into effect on 31 March 2020.
Under the new rules, the Central Bank will require intermediaries to publish details of the commissions they receive from product producers on their website. In addition, the Central Bank will no longer permit intermediaries to describe themselves and their regulated activities as ‘independent’ where they accept and retain commission in circumstances where advice is provided. The Central Bank is enhancing the conflict of interest provisions- certain criteria must be met in order for commission to be acceptable and commission linked to targets that do not consider a consumer’s best interests, and soft commission will no longer be permitted
In conclusion, you should note that I support these changes, which should increase transparency in the commission and inducements arrangements of intermediaries and result in a more level playing field between industry and consumers.
For further information please see the Central Bank’s website which has a press release and further information on the new rules for intermediaries.
https://www.centralbank.ie/news/article/press-release-intermediary-commissions-25-sept-2019