Written Answers Nos. 51-75
51. Deputy Cathal Crowe asked the Minister for Finance if he will give consideration to introducing a 0% VAT rate as an interim measure for the tourism and recreation sectors to give them a much needed boost post Covid-19 restrictions. [11150/20]
View answer108. Deputy Denis Naughten asked the Minister for Finance if he will reduce the VAT rate to zero for the hospitality sector to assist with the Covid-19 recovery of the economy; and if he will make a statement on the matter. [11369/20]
View answerI propose to take Questions Nos. 51 and 108 together.
I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive. Specific services relating to the tourism and recreational sector are listed in Annex III of the Directive and therefore can be reduced to 9%. However, there is no discretion under the Directive to zero rate these supplies.
52. Deputy David Cullinane asked the Minister for Finance the reason there has not been flexibility in accommodating businesses that were unable to meet the payroll submission deadline in March 2020 and which can demonstrate their legitimate need to access the temporary wage subsidy scheme; if new applications are being accepted for businesses that require access to the scheme to retain and rehire employees in the coming weeks and months; and if he will make a statement on the matter. [11312/20]
View answerThe Temporary Wage Subsidy Scheme (TWSS) is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. The scheme builds on data returned to Revenue through its real-time PAYE system.
It must be accepted that the underlying legislation and the scheme itself cannot be tailored to meet every individual unique set of circumstances for either employers or employees. The core principles of the scheme, as prescribed in the underlying law, are that the business is suffering significant negative economic impact due to the pandemic, that the employees were on the payroll at 29 February 2020 and that the employer had fulfilled its PAYE reporting obligations for February 2020 before, in general, 15 March 2020. The latter two requirements in particular were critical safeguards against abuse and exploitation of the scheme.
As the Deputy may be aware, I announced an extension of the TWSS until the end of August 2020 and thus, where the employer meets the eligibility conditions for the TWSS, new applications will continue to be accepted by Revenue for businesses that require access to the scheme to retain and rehire employees in the coming weeks and months.
I have been advised by Revenue that following a review of cases since the TWSS commenced, it became apparent that a number of employers had been unable to access the scheme because they failed the 15 March 2020 rule but had qualified under all other conditions of the scheme and are otherwise tax compliant. Given the purpose and objective of the scheme, Revenue announced on 24 April 2020, under its care and management provisions, that it would allow such employers access the scheme provided:
- the employees in respect of whom the wage subsidy is claimed were included on the employer’s payroll on 29 February 2020,
- the February 2020 payroll submissions were submitted to Revenue before 1 April 2020, and
- the payroll submissions for all previous months were submitted to Revenue before 15 March 2020.
Where a business qualifies for the scheme under the revised criteria and makes the necessary declaration that it is significantly impacted by the Covid-19 crisis, the wage subsidies under the scheme will be payable for eligible employees in respect of payroll submissions made on or after 24 April 2020, with a pay date on or after 24 April 2020. These revised arrangements cannot be made retrospective.
Where a business fails to meet the revised qualifying criteria for TWSS but wishes to further engage with Revenue on the matter, it must provide supporting evidence setting out the rationale for why it should be included in the scheme. This supporting documentation should be provided via Revenue’s myEnquiries system.
Revenue advises that it does not propose to make any further concessions in relation to compliance with those reporting requirements for the purposes of qualification for the scheme.
54. Deputy Cormac Devlin asked the Minister for Finance the estimated cost of increasing by €250,000 the threshold at which businesses must use the invoice system as opposed to cash receipts system for VAT; and if he will make a statement on the matter. [10515/20]
View answerIncreasing the allowable threshold for accounting for VAT on a monies received basis would generate a once-off cash-flow cost to the Exchequer.
I am advised by Revenue that, based on 2019 VAT returns, increasing the threshold from €2.0m to €2.25m could have a cash-flow cost in the region of €27m in the year in which the change is made.
55. Deputy Cormac Devlin asked the Minister for Finance the estimated full-year yield from standard rating all discretionary tax reliefs and expenditures that cost in excess of €5 million per year in revenue; the breakdown of each tax relief and expenditure; and if he will make a statement on the matter. [10516/20]
View answerI am informed by Revenue that the estimated yields from standard-rating discretionary tax reliefs and expenditures currently available at the marginal rate that cost in excess of €5 million per year are as shown in the following table. These yields are based on 2017 data. The estimates are tentative and do not account for alterations in taxpayer behaviour.
|
Relief or Expenditure |
Full Year Yield (€m) |
|
Employee Pension Contribution |
381 |
|
Carry forward of excess relief under the High-Income Earners Restriction |
46 |
|
Exemption of Interest on Savings Certificates, National Instalment Saving & Index Linked Saving Bonds |
27 |
|
Approved Profit-Sharing Schemes |
24 |
|
Donations to Charities and Approved Bodies |
12 |
|
Employment and Investment Incentive |
10 |
|
Health Expenses (Nursing Homes) |
7 |
|
Dispositions such as Maintenance Payments |
6 |
|
Rental Deduction for Leasing of Farm Land |
5 |
|
Employing a Carer |
3 |
|
Exemption of Certain Earnings of Writers, Composers and Artists |
5 |
|
Stock Relief (General) (S,666 Taxes Consolidation Act 1997) |
2 |
|
Exempt Income Rent A Room |
0.7 |
Further details on the costs of tax reliefs and expenditures, which may be of interest to the Deputy, are published on Revenue’s website at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/index.aspx.
56. Deputy Frankie Feighan asked the Minister for Finance when the local property tax will be sanctioned by the Revenue Commissioners to be taken from the bank accounts of persons; if the matter has been paused until after the Covid-19 crisis; if not, if the suggested date of 21 July 2020 is accurate; and if he will make a statement on the matter. [10542/20]
View answerRevenue has deferred collection of 2020 Local Property Tax (LPT) liabilities that were scheduled for payment on 21 March 2020 via the electronic Annual Debit Instruction (ADI) option. The initial revised date for collection was 21 May 2020 but Revenue subsequently further extended the date to 21 July 2020 in response to the unfolding COVID-19 crisis.
Revenue has advised me that arrangements are now being put in place for these payments to be deducted from nominated bank accounts on 21 July and that no further extensions are envisaged. However, Revenue has also confirmed that any residential property owners that opted for the ADI option, but are now experiencing changed financial circumstances due to the COVID-19 pandemic, can still amend their payment arrangement to a more suitable method by logging on to their online LPT account at link https://lpt.revenue.ie/lpt-web/views/login.html?execution=e1s1. To access the system, property owners require their unique Property ID and PIN numbers. Alternatively, they should write directly to Revenue at LPT Branch, PO Box 1, Limerick, confirming the preferred revised payment option.
57. Deputy Pádraig O'Sullivan asked the Minister for Finance if his attention has been drawn to the fact that a person (details supplied) whose company is using the temporary wage subsidy scheme has been taxed over €90 on their weekly wage and that the person is not normally subject to tax under the incapacitated child allowance; and if there is a process in place to claim the tax back in the short term without having to wait until year end. [10547/20]
View answerThe Temporary Wage Subsidy Scheme (TWSS) is designed to support the objective of getting much needed financial assistance to employers and employees, where businesses have been seriously affected by the COVID-19 pandemic and the necessary restrictions introduced to fight the spread of the virus.
The subsidy is operated by employers through their payroll and the amount due to each employee is based on the aggregate weekly net pay (of the employee) for January and February 2020. While the TWSS is liable to Income Tax and Universal Social Charge (USC), these amounts are not being deducted from employees in real time through the PAYE system. Instead, they will become chargeable later as part of the employee end year review and may in fact be offset by unused tax credits or additional reliefs such as health expenses.
Revenue has advised me that it is not possible to determine the tax position of the person/s in question from the information provided. However, Revenue has assured me that it will immediately review the situation if the Deputy can provide further details regarding the identity of the person/s. The Deputy can make direct contact with Revenue via the Oireachtas Helpline at telephone number 01-858 9999.
59. Deputy Darragh O'Brien asked the Minister for Finance if his attention has been drawn to cases in which persons are availing of the temporary wage subsidy scheme which is then having negative implications on their ability to draw down mortgage offers from banks; the actions he has taken to counteract this; and if he will make a statement on the matter. [10588/20]
View answerThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. That assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR also provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. Where a formal loan offer is made by a lender, the loan offer may contain a condition that may allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the loan offer is also a commercial decision for the lender.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. In addition, the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
60. Deputy Eoin Ó Broin asked the Minister for Finance further to Parliamentary Question No. 63 of 27 May 2020, the number of the 70 local applications to HBFI that were rejected; the number still pending; the number of the 23 approved loan applications that had planning permission; and the number that were awaiting planning and had not applied for it at the time of loan approval. [10583/20]
View answerI am advised by HBFI that of the 70 loan applications received there are currently 12 pending decision. I am further advised that HBFI has approved approximately 50% of all valid applications received to date and that this approval level is standard for residential development lending and reflects the underlying risk profile of the projects. Loan applications are assessed on a case by case basis and the main reason an application does not get approved is that the housing or apartment scheme is not viable. Viability of a project is an important element of the assessment process and is undertaken to ensure that state funds are leant in a prudent manner with a high probability of repayment. Lending to an unviable project would expose taxpayer money to an unacceptable level of risk.
In relation to planning, I am advised by HBFI that all of the applications approved to date had the required planning permission already in place but HBFI does engage with projects that are in the planning system to ensure that the final approval of funding can happen as soon as planning is achieved.
61. Deputy Michael McGrath asked the Minister for Finance when he plans to commence all sections of the Consumer Insurance Contracts Act 2019; and if he will make a statement on the matter. [10573/20]
View answerThe Consumer Insurance Contracts Act 2019 was signed into law by the President on 26 December 2019. The Act provides the Minister for Finance with powers to appoint a date for the Act to come into operation, or to appoint different days to commence different provisions of the Act.
At the end of January, I took the decision that the matter of when to commence the Act should be taken by the next Government. The background to this decision was a series of meetings with the major insurers where significant concerns were expressed about the early implementation of certain aspects of the Act. Specifically, it was indicated to me that sufficient time would be needed in relation to the implementation of Sections 8 (Pre–contractual duties of consumer and insurer) and Section 12 (Renewal of contract of insurance). In addition, Sections 9 (Proportionate remedies for misrepresentation) and 14 (Duties of consumer and insurer at renewal) are sufficiently interrelated with Section 8 that it is reasonable to consider that the concerns expressed also apply to these sections. Moreover, the Deputy should note that a general view was expressed by insurers that they also needed a number of months to prepare themselves for the implementation of the sections other than those referred to above.
My officials have advised me that the sector has indicated to them that if insurers are not provided with sufficient time to implement the requirements necessary to fulfil the obligations of the above mentioned sections, they may be forced to withdraw certain products from the market in order to prioritise others so as to ensure that they are fully compliant with the law. Officials understand that such a development would most likely to impact the employer/public liability part of the market. While conscious of the sector’s concerns, officials have emphasised to Insurance Ireland the importance of the need for ongoing preparation by the sector for the ultimate commencement of this Act, either on a phased basis or in full.
Consequently, as I believe that this matter is one to be considered after the formation of the next Government, I cannot currently give any indication of a likely timeline for the commencement of this Act, on a phased basis or in full.
62. Deputy Ged Nash asked the Minister for Finance his plans to address the withdrawal of mortgage approval for those availing of the temporary wage subsidy scheme; and if he will make a statement on the matter. [10577/20]
View answerThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. That assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR also provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. Where a formal loan offer is made by a lender, the loan offer may contain a condition that may allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the loan offer is also a commercial decision for the lender.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. In addition, the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
63. Deputy Brendan Howlin asked the Minister for Finance if he has an agreement from the banks that persons with mortgage approval and who subsequently went on the temporary wage subsidy scheme payment will not have their mortgage approval withdrawn; and if he will make a statement on the matter. [10611/20]
View answerThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. That assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR also provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. Where a formal loan offer is made by a lender, the loan offer may contain a condition that may allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the loan offer is also a commercial decision for the lender.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. In addition, the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
64. Deputy Jack Chambers asked the Minister for Finance the amount collected in carbon tax to date in 2020. [10659/20]
View answerI am advised by Revenue that €209.2 million was collected in Carbon Tax for the period January to May 2020. This is an increase of €20.7 million over the same period in 2019.
It is important to note that for the period January to May 2019 carbon tax was charged at €20 a tonne, while in the period January to May 2020 carbon tax on petrol and auto-diesel was charged at €26 a tonne.
The increase to €26 per tonne for other oils became effective from 1 May 2020 and will be reflected in tax receipts from June 2020.
65. Deputy Mary Butler asked the Minister for Finance his views on and if he will address matters relating to expensive insurance premiums (details supplied); and if he will make a statement on the matter. [10668/20]
View answerAt the outset it should be noted that neither I, as Minister for Finance, nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct insurance companies as to how they price their policies or what terms and conditions they apply in those policies.
On a general level, my understanding is that insurers will use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. For example, in relation to commercial van insurance, including for couriers, factors may include those such as the age of the driver and their relevant driving experience, as well as the age and type of vehicle, how and where it is used, the claims record, the number of drivers, and the storage and use of the vehicle. Insurers also price in accordance with their own past claims experience, and do not all use the same combination of rating factors, so as a result prices vary across the market. While I cannot comment on the specific case referenced in the details supplied, a number of these factors may be influencing the ability of the individual courier to secure insurance at a lower price.
The above said however, it is my understanding that there are a number of brokers and insurers still offering courier van insurance. Consequently, my view is that it is now more important than ever for those operating in this sector to shop around for their insurance policies. In this regard, the Competition and Consumer Protection Commission (CCPC), on its website, recommends that consumers get quotes from a number of insurance companies, including their current one.
With regard to steps taken by Government to create a more competitive environment in relation to insurance generally, I believe that the Cost of Insurance Working Group (CIWG) has done considerable work to reform the insurance market so as to stabilise pricing and availability of insurance. The impact of this can be seen in particular in relation to private motor insurance, however I accept that more needs to be done in some key areas such as the personal injuries legal environment. In this regard, the Deputy may recall the Personal Injuries Commission’s conclusions that soft tissue injuries are significantly higher here than in England and Wales (4.4 times) and recommended that action be taken to address this disparity through the establishment of the Judicial Council. I believe that the discrepancy in award levels is unsustainable and that these should be reduced considerably. Completion of those recommendations related to the Judicial Council and Law Reform Commission (LRC) is therefore vital if we want to attract more insurers into the Irish market.
By way of update to the Deputy, I understand that the relevant Personal Injuries Guidelines Committee (PIGC), within the Judicial Council, was established on 28 April and is due to submit its first draft Personal Injuries Guidelines to the Council within six months, as per the requirements of the legislation. While the Government cannot interfere in the Judicial Council’s deliberations due to the constitutional separation of powers, I would hope that the Guidelines will take into account the Personal Injury Commission’s benchmarking report, and can come into operation as soon as possible following their submission to the Judicial Council. In return for lower and more consistent award levels, I believe insurers have to significantly reduce their premium levels and broaden their risk horizons.
Finally, I would like to assure the Deputy that the Cost of Insurance Working Group is continuing to focus on implementing the recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Report on the Cost of Motor Insurance. The cumulative effects of the completion of the two Reports’ recommendations should include increased stability in the pricing of insurance for small businesses, like the one referenced, and a more competitive insurance market.
66. Deputy Róisín Shortall asked the Minister for Finance if he has made contact with a bank (details supplied) to discuss the temporary closure of more than 100 branches and the future of same; if he will write to the bank seeking a timeline for the reopening of the branches; and if he will make a statement on the matter. [10680/20]
View answerAs the Deputy is aware, I have engaged and will continue to engage extensively with the Banking and Payments Federation (BPFI) and the banks directly in relation to supports for personal and business customers affected by the COVID-19 crisis. Furthermore, officials in my Department are alert to issues raised directly by the public and these inform the Department’s ongoing engagement process and policy formation. All the banks, Bank of Ireland included, have continued to evolve and expand the supports they have available and I would expect that this process will continue.
Bank of Ireland has introduced a wide variety of solutions designed to help both personal and business customers affected by the COVID-19 crisis including mortgage breaks, cash flow supports for businesses and banking arrangements for customers who are cocooning/self-isolating.
The Deputy may also be aware that as Minister for Finance, I am precluded from intervening in how Bank of Ireland manages its day-to-day business and relationship with any of its customers. Decisions in this regard are solely the responsibility of the board and management of the bank which must be run on an independent and commercial basis. The independence of the banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.
Notwithstanding this, officials in the Department have requested a comment from Bank of Ireland in relation to the manner in which it is managing its branch network during the current crisis and have received the following response:
“Due to COVID-19 Bank of Ireland has made a number of operational changes to safeguard critical services during the pandemic, respond to a significant shift in how customers are banking, and support social distancing requirements.
"To safeguard critical services we prioritised one hundred and sixty one of our larger branches nationwide, as well as our contact centres and online banking which have seen a surge in use over recent months. One hundred and one mainly smaller locations, which had seen a sharp drop in usage, were closed. Colleagues from these locations have been supporting our contact centres and online services manage high volumes of requests, as well as our larger branches where social distancing can be better maintained.
"We're continuing to see shifts in customer behaviour towards online banking channels, and social distancing requirements remain in place. Our focus therefore remains on protecting the prioritised services across one hundred and sixty one branches, telephone and online banking, while keeping all developments under active review."
I note that, subsequent to receiving this response from the BOI, the bank issued a press release on 8 June announcing that it was reopening the majority of the relevant branches highlighting that branches in colleges, hospitals and airports will remain closed. BOI’s press release is this regard can be found at the following link:
https://www.bankofireland.com/about-bank-of-ireland/press-releases/2020/bank-of-ireland-announces-update-to-covid-19-services-and-supports/
67. Deputy Michael Healy-Rae asked the Minister for Finance his plans to change the 180-day tax rule (details supplied); and if he will make a statement on the matter. [10685/20]
View answerI am advised Revenue that an individual’s tax residence position is determined in accordance with the provisions of section 819 Taxes Consolidation Act 1997. In that regard, an individual’s tax residence status is determined by reference to his or her presence in the State during a particular tax year. For example, an individual will be considered tax resident in the State if they are present for:
- 183 days or more in a tax year; or
- 280 days or more in a tax year and the preceding tax year when taken together, with a minimum of 30 days in each year.
An individual’s liability to Irish income tax is determined by reference to the source of his or her income and his or her Irish tax residence, ordinary residence and domicile status for a particular year.
Once an individual has been tax resident in the State for three tax years, he or she will also be considered ordinarily resident from the fourth year.
Domicile is a legal concept and is not defined in tax legislation. Every person must have a domicile and a person can only have one domicile at any particular time. An individual is born with a domicile of origin, usually the domicile of his or her father. However, it is possible for an individual to acquire a domicile of choice, but this appears to be outside of the current question raised.
An Irish resident and domiciled individual is taxable on his or her worldwide income. Generally, non-residents are only taxable in respect of income from Irish sources. However, individuals who are not resident but who are ordinarily resident may also be liable to Irish income tax in respect of certain non-Irish sources. This is subject to any relief being provided by the terms of a relevant Double Taxation Agreement.
An Irish resident but non-domiciled individual is liable to Irish income tax on his or her Irish source income and foreign income to the extent that it is remitted.
An individual who is not resident but is ordinarily resident and not domiciled in the State will be liable to Irish tax on his or her Irish income and foreign income to the extent it is remitted. Income from an employment, all the duties of which are performed outside the State is not liable to Irish income tax, even if remitted.
An individual who is not resident, and not ordinarily resident, is liable to Irish income tax on his or her Irish source income only. This applies regardless of his or her domicile status.
A domicile levy may apply to an Irish domiciled individual where certain conditions are satisfied. Further information on domicile and the domicile levy can be found on Revenue’s website - available here.
Existing Revenue guidance states that where an individual is prevented from leaving the State on his or her intended day of departure due to extraordinary natural occurrences or an exceptional third party failure or action – none of which could reasonably have been foreseen and avoided – the individual will not be regarded as being present in the State for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in the State on that day due only to ‘force majeure’ circumstances.
Revenue’s interpretation of “force majeure” has been updated to consider those cases who as a result of COVID-19 have had a departure from the State restricted directly as a result of the emergency situation. In any case where a taxpayer relies upon “force majeure”, it will be necessary for him or her to be able to appropriately support this position (i.e. information/documentation in relation to how a departure from the state has been prevented due to restrictions in place).
Therefore, where an individual is present in the State in 2020, his or her tax residence position should be determined with regard to his or her presence in the State, while having regard to the “force majeure” position. The guidance on “force majeure” is included on the COVID-19 section of Revenue’s website - available here.
68. Deputy Duncan Smith asked the Minister for Finance if he will implement a moratorium on SME debt and loans in order to help SMEs remain viable during the closures imposed due to the Covid-19 outbreak; and if he will make a statement on the matter. [10696/20]
View answerOne of my main concerns currently is to ensure that SMEs have access to sufficient liquidity, and that access to credit for SMEs is maintained.
While, as Minister for Finance, I have no function in the commercial decisions of banks, given the current COVID-19 crisis I have met with the CEOs of the 5 main banks and the Banking and Payments Federation of Ireland (BPFI). The banks assured me that they are working to ensure a wide range of credit, cash flow and supply chain supports are offered to businesses who are trying to manage the pressures arising from COVID-19. In these meetings I emphasised the important role of the banking sector in supporting the gradual re-opening of the Irish economy by ensuring a flow of credit to businesses as they begin to trade again, in line with the government’s Roadmap for Re-opening Society and Business.
In this regard I welcome the banks most recent announcement, on 30 April, to extend payment breaks to six months for households and businesses which require it and that loan terms may be extended.
The BPFI and its members published a new Guide on Payment Breaks on 28 May, available here: https://www.bpfi.ie/wp-content/uploads/2020/05/BPFI-Guide-to-C-19-Payment-Break.pdf . This guide outlines advice for those who may need a payment break but have not yet taken one or who are reaching the end of the initial 3 month break.
You can be assured that I continue to work to ensure that all necessary supports are available for businesses affected by COVID-19.
69. Deputy James Browne asked the Minister for Finance if he will review the help-to-buy scheme and examine the need to include second-hand properties in need of repairs; and if he will make a statement on the matter. [10727/20]
View answer70. Deputy Catherine Murphy asked the Minister for Finance his plans to extend to first-time buyers the incentives and assistance to persons seeking to purchase a home that is not a new build; and if he will make a statement on the matter. [10763/20]
View answerI propose to take Questions Nos. 69 and 70 together.
Section 477C of the Taxes Consolidation Act of 1997 provides for The Help to Buy scheme (HTB). HTB was initially announced on 19 July 2016 as part of the ‘Rebuilding Ireland: Action Plan for Housing and Homelessness’ and was due to terminate on 31 December 2019. However, in Finance Act 2019, I provided for an extension of the scheme, in its present form, for a further two-year period up to 31 December 2021. This extension aligns with the timeline envisaged for building more homes in Rebuilding Ireland.
HTB has been the subject of two independent reviews: an impact assessment (2017), and a full Cost Benefit Analysis (2018), both carried out by Indecon Economic Consultants.
The report of the impact assessment was published as part of Budget 2018 documents and is available at the following link:
http://www.budget.gov.ie/Budgets/2018/Documents/HTB_Independent_Impact_Assessment_Sept2017.pdf
The report of the Cost Benefit Analysis was published on the day of Budget 2019, in the Department of Finance Report on Tax Expenditures, and is available at the following link:
www.budget.gov.ie/Budgets/2019/Documents/Tax%20Expenditures%20Report%20Budget%202019.pdf .
An increase in the supply of new housing is fundamental to resolving the current housing crisis. One of the main aims of the policy underpinning the design of HTB was to help encourage the building of additional new properties. By restricting the scheme solely to new dwellings and new self-builds, it is anticipated that the resulting increase in demand for affordable new build homes will encourage the construction of an additional supply of such properties.
If the scheme were also available for second hand properties, such an extension would have little or no effect on the provision of additional supply, and would consist primarily of ‘economic deadweight’ in terms of incentive effect.
Finally, it should be noted that taxation is only one of the policy levers available to the Government through which to boost housing supply. Ireland’s past experience with tax incentives in the housing sector strongly suggests the need for a cautionary stance when considering intervention. Given these considerations, there are no plans at the present moment to extend the Help to Buy scheme to second hand properties.
72. Deputy Michael McGrath asked the Minister for Finance when the VRT offices will open again in order that dealers can register vehicles and complete vehicle sales; the way in which VRT registrations are being administered for the larger car dealerships; when the VRT office in Blarney, County Cork will open; and if he will make a statement on the matter. [10801/20]
View answerI am informed by Revenue that the following National Car Testing Service (NCTS) Centres will reopen for VRT business from 15 June: Blarney, Waterford, Limerick, Ballymount, Greenhills, Galway, Letterkenny, Dundalk and, from 22 June, Enniscorthy and Ennis. As more details become available in respect of other NCTS Centres they will be updated on the Revenue website.
I am further informed by Revenue that registration by authorised dealers on the Revenue Online Service (ROS) of new cars and cars that have been pre-inspected has not been interrupted and such vehicles may be registered in the normal way before delivery to a customer.
73. Deputy Paul Kehoe asked the Minister for Finance the status of the documents required for a person (details supplied); if assistance will be offered to expedite the process; and if he will make a statement on the matter. [10832/20]
View answerRevenue has advised me that there has been extensive correspondence in this case, the most recent of which issued to the relevant parties on 3 June 2020. Revenue has also spoken directly with the representatives in the case to confirm the details required in order to finalise the matter.
Revenue has assured me that once the requested documentation is received it will have the matter dealt with immediately.
74. Deputy Bríd Smith asked the Minister for Finance his views on the difficulties faced by persons in receipt of social welfare payments and others who do not have access to debit or credit cards and who are being refused service at some retail outlets as a result of Covid-19 measures which see some outlets refusing cash; his plans to address the difficulty; and if he will make a statement on the matter. [10838/20]
View answer129. Deputy Bríd Smith asked the Minister for Finance if his attention has been drawn to the difficulties faced by persons on social welfare who do not have debit or credit card facilities and use cash only in the Covid-19 crisis in view of the fact many shops are refusing cash payments and will only take card payments; and his plans to deal with the situation. [11486/20]
View answerI propose to take Questions Nos. 74 and 129 together.
The Deputy will aware that card payments, and in particular contactless payments, are being promoted in order to support public health policy at this time.
As retail outlets begin to reopen, I am aware that some retailers are choosing to only accept card and contactless payments in store I understand that this may cause difficultly for consumers who do not have access to debit or credit card facilities.
The Payments Accounts Directive (PAD) was transposed into Irish law in September 2016. From this date, all banks offering payment accounts were required to offer an account with basic features free of charge for at least one year to consumers who do not already have a bank account. These basic features include an ATM card, direct debits and the ability to pay for goods and services online.
This means that unbanked customers are able to open a basic bank account whatever their personal financial situation and I would encourage anyone who doesn't have access to a credit union account or An Post account to contact a bank about opening a basic bank account.
Where retailers are accepting a limited range of payment options, consumers must be informed of the payment options available in advance of a transaction. This can be achieved, for example, by displaying signs at the till and at the store entrance. If a retailer does not specify clearly in advance of a transaction the means of payment they are prepared to accept, they must accept cash.
I am advised by the Central Bank that banknotes do not represent a particularly significant risk of infection compared with other surfaces that people come into contact with in daily life. Therefore, I would encourage retailers to provide a range of payment options for consumers.
75. Deputy Charlie McConalogue asked the Minister for Finance if he will consider the points raised in correspondence (details supplied); and if he will make a statement on the matter. [10930/20]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. Under the EU VAT Directive and Irish VAT legislation the supply of building materials is liable to VAT at the standard rate, currently 23%. Member states are not permitted to apply a VAT rate lower than the standard rate to building materials. By way of special derogation from the general rule, however, Ireland is permitted to continue to apply a reduced rate, currently 13.5%, to the supply of ready-to-pour concrete and certain concrete blocks but this reduced rate cannot be reduced below 12%.
Construction services that consist of the "renovation and repairing of private dwellings, excluding materials which account for a significant part of the value of the service supplied" can benefit from the reduced rate of VAT, currently 13.5%. This means that where a building contractor carries out home improvements and the materials cost does not exceed two-thirds of the cost of the improvements then the reduced rate of 13.5% applies to the total construction service. A consequence of this is that a VAT registered building contractor will generally be entitled to recover VAT at the 23% standard rate on most building materials purchased while the contractor is only liable to charge VAT at the 13.5% reduced rate on the total supply (including the materials and the labour elements of the job) to the homeowner. The difference in rates between the 23% input VAT and the 13.5% output VAT should normally be reflected in the VAT-inclusive cost to the homeowner.
Under my Department's Tax Expenditure Guidelines, the introduction of new tax incentive measures should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention. Tax relief in general can be a blunt instrument and in this case the grant scheme introduced by my colleague the Minister for Housing Planning and Local Government would seem to be the better approach in supporting affected homeowners to carry out the necessary remediation work.
