Written Answers Nos. 202-221
202. Deputy Brendan Griffin asked the Minister for Finance if he will review the anomaly (details supplied) that is preventing businesses from qualifying for the Covid restrictions support scheme payment; and if he will make a statement on the matter. [3887/21]
View answer205. Deputy Brendan Griffin asked the Minister for Finance if he will review the anomaly (details supplied) that is preventing businesses from qualifying for the Covid restrictions support scheme payment; and if he will make a statement on the matter. [3911/21]
View answer209. Deputy Niall Collins asked the Minister for Finance if an organisation (details supplied) can qualify for the Covid restrictions support scheme; and if he will make a statement on the matter. [4017/21]
View answer215. Deputy Mary Lou McDonald asked the Minister for Finance if his attention has been drawn to the fact that there a number of businesses who do not qualify for the Covid restrictions support scheme as they do not have a fixed premises although they meet all other criteria; if he plans to review the criteria in order that businesses can access support; and if he will make a statement on the matter. [4104/21]
View answer220. Deputy Richard Bruton asked the Minister for Finance if his attention has been drawn to the fact that childcare providers that have charitable status cannot avail of the Covid restrictions support scheme; and if he has considered any alternative support for such providers. [4161/21]
View answer227. Deputy Brendan Howlin asked the Minister for Finance if he will review the supports available under the Covid restrictions support scheme particularly regarding wholesalers that cater for the hospitality industry; and if he will make a statement on the matter. [4316/21]
View answerI propose to take Questions Nos. 202, 205, 209, 215, 220 and 227 together.
The CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with Covid-19 Plan.
Details of CRSS were published in Finance Act 2020 and detailed operational guidelines, which are based on the terms and conditions of the scheme as set out in the legislation, have been published on the Revenue website at:
https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf.
To qualify under the scheme a business must, under specific terms of the Covid restrictions, be required to either prohibit or significantly restrict, customers from accessing their business premises to acquire goods or services, with the result that the business either has to temporarily close or to operate at a significantly reduced level. For the purposes of CRSS, a qualifying “business premises” is a building or other similar fixed physical structure in which a business activity is ordinarily carried on.
It is not sufficient that the trade of a business has been impacted because of a reduction in customer demand as a consequence of Covid-19. The scheme only applies where, as a direct result of the specific terms of the Government restrictions, the business is required to either prohibit or restrict access to its business premises. Where a business supplies goods or services to businesses in the hospitality industry which, under the specific terms of the Covid restrictions, are required to prohibit or significantly restrict customers from accessing their business premises (for example pubs and restaurants), it will not result in the supplier business being eligible to make a claim under CRSS. Each business must meet the qualification criteria in their own right.
Businesses whose trading profits are not chargeable to tax under Case I of Schedule D do not meet the eligibility criteria for CRSS.
A childcare provider that is not chargeable to tax under Case I of Schedule D will not qualify for CRSS. This includes a childcare provider that has been granted charitable tax exemption status because it is exempt from paying corporation tax or income tax on any income received where the income is used for its main charitable purpose.
A sports club that has been granted a sports body exemption is exempt from paying Corporation Tax or Income tax on any income received where the income is used for the purposes of promoting the game or sport. Such income would include income from a bar. A sports club with such an exemption is not chargeable to tax under Case I of Schedule D in respect of its income and therefore does not qualify for CRSS. I am advised by Revenue that a list of sports bodies that have been granted an exemption is published on their website and Ballybrown GAA Club is on the list. On that basis, it does not qualify for CRSS.
An approved sports body is not exempt from Value Added Tax (VAT) or payroll taxes and may be entitled to financial support under other measures put in place by the Government, including the Employment Wage Subsidy Scheme (EWSS). These clubs may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities and any excess payments received under the Temporary Wage Subsidy Scheme (TWSS).
The CRSS is just one of the Government’s supports to assist businesses impacted by COVID-19. Businesses who are not eligible for CRSS may be entitled to alternative supports put in place by the Government, including the COVID Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS). Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020. I have no plans to change the eligibility criteria for the CRSS.
The purpose of the CRSS is to provide additional support to the businesses who have had to close temporarily or significantly restrict access to their premises as a direct result of public health Regulations. The Government will continue to assess the effects of the Covid-19 pandemic on the economy and I will continue to work with Ministerial colleagues to ensure that appropriate supports are in place to mitigate these effects.
204. Deputy Neasa Hourigan asked the Minister for Finance his plans to remove VAT from beekeeping equipment and supplies. [3892/21]
View answerI have no plans to remove VAT on beekeeping equipment and supplies. Irish VAT law must comply with European VAT law which does not allow for a zero rate to be charged on goods outside of those specified in the VAT Directive or falling under an existing derogation.
206. Deputy Jennifer Carroll MacNeill asked the Minister for Finance the status of the living over the shop scheme; the areas in which it is operating or has previously operated in; the number of pilot schemes there were; if the scheme was successful; and if he will make a statement on the matter. [3941/21]
View answerThe original Living over the Shop (LOTS) scheme was part of a suite of capital allowance schemes which have now terminated and, in relation to this particular scheme, relief is not available for any capital expenditure incurred after 31 July 2008. The incentive was introduced in 2001 in the five city boroughs of Cork, Dublin, Galway, Limerick and Waterford. It provided relief of 100 per cent for eligible expenditure on the refurbishment or conversion of under-utilised space for residential accommodation at a rate of 10 per cent per annum over 10 years, against total income. The incentive closed to new claimants in mid-2006.
The estimated total cost to the Exchequer of the scheme was some €48.7m and an estimated 440 residential units were delivered.
A review of various existing tax incentives was undertaken by my Department, in part internally and in part by Indecon and Goodbody Economic Consultants, and included an examination of the LOTS incentive. The review was published in three volumes in February 2006. Volume two, the Goodbody Review of Area Based Tax Incentive Renewal Schemes is available at the following link:
https://assets.gov.ie/8101/2cfc2bb49fc7481aa2179cdf7712798b.pdf .
On the question about the success of the scheme, the above review found that there was a relatively limited take-up of the scheme for a variety of reasons. Also, having regard to the above figures on numbers and costs, it is hard to see an average tax relief cost of almost €111,000 per unit delivered as good value for money.
Finally, having regard to the well-documented part played by property-based tax incentives in contributing to the financial crisis here, there are no plans for the reintroduction of similar reliefs.
210. Deputy Carol Nolan asked the Minister for Finance the banking levy contributions made by individual banks and financial institutions from its inception to date; and if he will make a statement on the matter. [4038/21]
View answerThe Financial Institutions ("Bank") Levy was introduced for the three-year period 2014 to 2016 in Finance (No.2) Act 2013 with the purpose of enabling the banking sector to contribute to economic recovery. The annual yield of this levy is approximately €150 million.
In Finance Act 2016 my predecessor, Minister Michael Noonan, extended the bank levy to 2021, with a rolling series of base years for calculating the levy, and a corresponding change in the percentage of DIRT receipts in the base year to be applied to protect the €150 million annual yield.
The names of the financial institutions subject to the bank levy, and the amounts paid by each one, is confidential taxpayer information in accordance with section 851A of the Taxes Consolidation Act 1997.
211. Deputy Carol Nolan asked the Minister for Finance the measures being taken by his Department with respect to corporation tax reform and to address concerns that Ireland is disproportionately reliant on the revenue generated by this tax; and if he will make a statement on the matter. [4039/21]
View answerAs the Deputy may be aware, on 14 January I published an Update to Ireland’s 2018 Corporation Tax Roadmap. The Update demonstrates that Ireland has a proven track record of taking significant actions to prevent aggressive tax planning. Appendix 1 of the Update outlines 20 corporation tax reforms that Ireland has implemented since 2013, showing an extensive and continuing programme of reform. The Deputy may also be interested in page 21 of the Update, which summarises our commitments to future action, consideration and consultation to ensure that our corporation tax code remains competitive, fair and sustainable.
In relation to the Deputy's second question, the Department of Finance carried out a comprehensive economic impact assessment of Ireland’s corporation tax policy in 2014. This identified that Ireland collects a similar share of corporation tax as a percentage of GDP to the EU average. Also, a distinctive feature of the Irish economy is the high share of economic activity accounted for by foreign direct investment. Multinationals also account for a large proportion of Ireland’s corporation tax receipts, which is not surprising given our success in attracting leading multinationals to locate here and our high level of integration with the global economy. This level of concentration results in potential volatility in our corporation tax receipts, a fact that has been widely recognised by commentators including the Irish Fiscal Advisory Council.
My officials and I are fully aware of the risks associated with this level of concentration and volatility, and actions have been taken in recent years to mitigate the risk of over-reliance on potentially cyclical or over-concentrated corporation tax receipts. A range of base broadening measures have been introduced over the last decade and the rainy day fund was established and funded. While corporation tax receipts were maintained and in fact over-performed against expectation in 2020, these recent measures helped to fund the emergency support and stimulus measures introduced by the Government last year to support businesses facing the challenges arising from the COVID-19 pandemic.
Notwithstanding the current strength in corporation tax receipts, the risk of future volatility remains. The second round of the OECD BEPS process could pose a risk to corporation tax revenues in small open economies such as Ireland. Specifically, the allocation of corporation tax receipts based on the location of a company’s sales or users would benefit larger markets that are net-importers. Small, export-intensive economies such as Ireland would lose a portion of its tax base as a larger proportion of profits would be allocated to larger countries.
Ultimately, any impact on the Irish Exchequer and on inward investment will depend on the detail of whatever is actually agreed globally. However, my Department’s working estimate based on ongoing work being carried out by the Revenue Commissioners, is that the overall risk from BEPS-related changes could be in the range of €800 million to €2 billion annually. These significant potential costs notwithstanding, Ireland recognises that change is necessary to ensure that we have an international tax framework which fits the modern world. The certainty and stability provided by a globally agreed sustainable solution would help encourage trade and economic growth to the benefit of all.
212. Deputy Carol Nolan asked the Minister for Finance the measures being taken by his Department to tackle the aggressive tax avoidance behaviour engaged in by Irish real estate funds and real estate investment trusts; if an assessment has been made by the Revenue Commissioners with respect to calculating the amount of tax that has been avoided by IREFs and REITs from 2018 to 2020; and if he will make a statement on the matter. [4040/21]
View answerFinance Act 2013 introduced the regime for the operation of Real Estate Investment Trusts (REITs) in Ireland. The purpose of the REIT regime is to allow for a collective investment vehicle which provides a comparable after-tax return to investors to direct investment in rental property, by eliminating the double layer of taxation at corporate and shareholder level which would otherwise apply. REITs are required to distribute 85% of all property income profits annually to investors. Dividend Withholding Tax (DWT) at a rate of 25% must be applied to these distributions, other than those distributed to certain limited classes of investors such as pensions and charities as they are more generally exempt from tax.
An Irish Real Estate Fund (IREF) is an investment undertaking where 25% or more of the value of that undertaking is made up of Irish real estate assets. The legislation was introduced to address concerns raised regarding the use of collective investment vehicles by non-residents to invest in Irish property. Generally IREFs must deduct a 20% withholding tax on distributions to non-resident investors. Certain categories of investors such as pension funds, life assurance companies and other collective investment undertakings are generally exempt from having IREF withholding tax applied provided the appropriate declarations are in place. Irish resident investors may be subject to the investment undertakings exit tax, at a rate of 41%.
In 2019, officials in my Department produced a report on Real Estate Investment Trusts (REITs) and Irish Real Estate Funds (IREFs) as respects their investment in the Irish property market. The report was presented to the Tax Strategy Group and published in July 2019. It provided a basis for policy discussions and the amendments which were introduced in Finance Act 2019.
In relation to REITs, Finance Act 2019 extended the obligation to deduct DWT to include distributions of the proceeds of capital disposals. If the net proceeds from such capital disposals are not re-invested in the REIT business or distributed within a 2 year period, they become part of the profits of the REIT business, 85% of which must be distributed annually. In addition, the deemed disposal provisions upon cessation of REIT status were restricted to REITs that have been in operation for at least 15 years, in line with the regime's stated objective of encouraging long-term, stable investment in rental property. Finance Act 2019 also introduced a “wholly and exclusively” test when calculating the REIT profits available for distribution. This test was introduced to ensure that inflated costs, such as inflated management fees, cannot be used to reduce distributable profits. These amendments ensure the regime operates as intended.
In relation to IREFs, amendments were made to prevent the use of excessive debt and other payments to reduce distributable profits and to prevent the avoidance of tax on gains on the redemption of IREF units. In addition, the IREF return filing requirement was placed on a mandatory annual footing and the information which Revenue can request was increased to facilitate ongoing monitoring of the sector. These amendments were made to ensure appropriate levels of tax are paid by investors in Irish property.
Officials in my Department and Revenue continue to monitor the taxation of IREFs and REITS. Revenue have advised me that they analyse returns submitted by both IREFs and REITs and have measures available to them in the event of non-compliance. Should additional issues be identified I will take further action as necessary.
213. Deputy Carol Nolan asked the Minister for Finance if his Department has introduced new anti-hybrid mismatch rules in line with commitments under the Anti-Tax Avoidance Directive; the impact these rules have brought about; and if he will make a statement on the matter. [4041/21]
View answerAs part of Finance Act 2019, I introduced Anti-Hybrid rules in accordance with our obligations under the EU Anti-Tax Avoidance Directives or “ATAD”. The ATAD Anti-Hybrid rules have applied to all corporate taxpayers with effect from 1 January 2020. They are intended to prevent arrangements that exploit differences in the tax treatment of an instrument or entity under the tax laws of two or more jurisdictions to generate a tax advantage.
As the Anti-Hybrid rules took effect from 1 January 2020, it is only when corporation tax returns for 2020 are filed and analysed that the effect of these rules on Irish corporation tax receipts will be known. However, the expectation is they may not significantly affect Irish companies because our worldwide system of taxation and various existing Anti-Hybrid and anti-avoidance rules already existing in legislation have meant that hybrid structures have not been a feature of tax planning here.
It is also to be noted that Anti-Hybrid rules are not designed primarily to raise Exchequer revenue, but rather to modify taxpayer behaviour by preventing the use of hybrid mismatches to create tax advantages. The purpose of the rules is to improve the robustness of the international corporate tax system as a whole, and the coordinated introduction of Anti-Hybrid rules across all EU Member States aims to ensure their effective operation. Implementing Anti-Hybrid rules is part of a global solution to a global problem.
214. Deputy Catherine Murphy asked the Minister for Finance the specific funding streams available to local authorities to apply for; the amount that has been given by county; the amount awarded under each scheme in each of the years 2018 to 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [4055/21]
View answerI can advise the Deputy that my Department does not have a direct role in funding local authorities.
216. Deputy Colm Burke asked the Minister for Finance if VAT of 21% and duties of 10% apply to vehicles imported from Northern Ireland; and if he will make a statement on the matter. [4121/21]
View answer217. Deputy Colm Burke asked the Minister for Finance if VAT of 21% and duties of 10% apply to vehicles imported from Northern Ireland if the dealer in Northern Ireland has bought the car from England, Scotland or Wales; and if he will make a statement on the matter. [4122/21]
View answer233. Deputy Colm Burke asked the Minister for Finance the position regarding circumstances in which cars which are imported from the UK or Northern Ireland but built within an EU country are not liable to the import tariff; and if he will make a statement on the matter. [4384/21]
View answerI propose to take Questions Nos. 216, 217 and 233 together.
I am advised by Revenue that under the Protocol on Ireland and Northern Ireland, Northern Ireland will continue to apply and adhere to EU rules in relation to trade in goods with the result that there are no customs formalities, including customs declarations or payment of tariffs, on trade between Ireland and Northern Ireland. In relation to vehicles from Northern Ireland
- Vehicles registered in Northern Ireland or to a person resident in Northern Ireland before 1 January 2021 can be registered in Ireland without any checks on the customs status.
- Vehicles first registered in Northern Ireland after 1 January 2021 can be registered in Ireland without any checks on the customs status.
Vehicle Registration Tax (VRT) is payable on such vehicles upon registration in the State. Value Added Tax (VAT) is payable on new vehicles only. New vehicles as defined for VAT purposes are generally vehicles under six months old or with less than 6,000km.
Under the VAT rules currently in force in the UK, vehicles first registered in Great Britain and imported into Northern Ireland after 31 December are liable to customs duty, if applicable, and VAT at import if they are subsequently imported into the State.
The EU-UK Trade and Cooperation Agreement has eliminated tariff duties for trade between the EU and Great Britain where the relevant rules of origin are met. It is important to note that a claim for preferential tariff treatment for imports into Ireland can be made only where the goods are of UK origin. The customs tariff duty on the import of passenger cars of UK origin is 0%. The customs tariff duty on the import of passenger cars of non-UK origin is 10%. Customs tariff duty, if applicable, applies on the customs value of the vehicle. To import a car of EU origin from Great Britain into Ireland, a customs declaration must be completed. The customs value is the invoice price plus the cost of transport and insurance. In addition to any import tariff, VAT at 21% will also apply.
The routing of importations of used vehicles from Great Britain into the State through Northern Ireland to avoid EU requirements in relation to customs duty and VAT at import will not be permitted.
221. Deputy Neasa Hourigan asked the Minister for Finance his plans to introduce a VRT exemption for mountain rescue vehicles and other vehicles used solely in such rescue activities; and if he will make a statement on the matter. [4174/21]
View answerSection 130 of the Finance Act 1992 (as amended by Section 102 of the Finance Act 2010) introduced, from 1 January 2011, a revised classification system for the assessment of VRT which reflects the categories used for classification of vehicles at European level under various EC Directives. Passenger Vehicles (EU Category M) and Commercial Vehicles (EU Category N) are classified based on the specifications of these vehicle types and in particular, the number of seats and their goods carrying capacity. There are no provisions for the classification of vehicles based on their usage.
A vehicle may be registered as an ambulance if it conforms to the definition provided in Regulation (EU) 2018/858. This states that the vehicle must be: “intended for the transport of sick or injured people and having special equipment for such purpose .” Furthermore, the layout and technical equipment of the patient compartment have to comply with the European requirement (IS EN 1789:2007 +A1: 2010 +A2:2014) on medical vehicles and their equipment. This standard emphasises, amongst other things, the ceiling clearance level of the patient compartment which gives sufficient space for the treatment of the casualty during transport. Under the terms of the Directive these vehicles are assigned an EU SC bodywork code as a special purpose vehicle at EU type-approval stage.
Vehicles such as converted 4x4s and sports utility vehicles cannot meet the required standards as set out above, in particular in relation to the ceiling clearance level and partitions. Revenue therefore regards them as category A which is consistent with their passenger transport design. When deployed operationally, the primary function of these vehicles is to support ground personnel and provide transport facilities for patients to take them from off-road areas to a waiting emergency ambulance. In addition, these 4x4s may not be exclusively used for the carriage of sick or disabled persons, as they may also be used as staff vehicles outside of specific events.
Any attempt to base VRT classification on the use of a vehicle as distinct from its design would be unworkable legislatively and administratively.
Many organisations which operate these types of vehicle are already in receipt of significant Government funding such as the Department of Rural and Community Development’s CLÁR programme. The purpose of this funding includes to help maintain their vehicle fleet.
