Written Answers Nos. 351-379
351. Deputy Emer Higgins asked the Minister for Finance if a parent who is fully financially supporting their child who resides outside of the EU can claim tax relief on their income; and if he will make a statement on the matter. [31096/21]
View answerI am advised by Revenue that while there is no specific child tax relief available to parents, there are some reliefs that may apply to parents supporting children who reside outside of the EU. Each of these reliefs is subject to certain conditions.
Revenue advises that parents supporting children outside the EU may be eligible for health expenses relief in the form of income tax relief for expenditure on certain health expenses for themselves and their dependents, including visits to the doctor, medicines, nursing care in the patient’s home (in certain circumstances), nursing home fees, expenditure in respect of children with life threatening illnesses, kidney patients’ expenses, mileage for individuals who need to travel for treatment and certain medical appliances. More information on tax relief for health expenses is available here: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-12.pdf
Revenue also advises that parents in the circumstances outlined may also be eligible under section 473A Taxes Consolidation Act 1997 which provides for income tax relief in respect of qualifying tuition fees paid by an individual for a postgraduate third level education course, subject to the terms and conditions set out in that section. The relief is granted at the standard rate of income tax (currently 20%), where an individual pays qualifying fees for an approved course whether on his or her own behalf or on behalf of another individual. Claimants who pay tuition fees in instalments can claim tax relief either in the tax year when the academic year started or the tax year when the instalment is paid.
“Qualifying fees” mean tuition fees in respect of an approved course at an approved college. Tuition fees that are, or will be, met directly or indirectly by grant, scholarship, employer contribution or other means are deducted in arriving at the net qualifying fees. A claim for relief may be made in respect of a number of students. It should be noted that any claim for relief must be submitted within the 4-year time limit which applies to claiming tax reliefs. The maximum amount of fees that can qualify for the relief is €7,000 per course per academic year. A disregard amount per claim is applied which is currently €3,000 in the case of a full-time course(s) and €1,500 for a part time course(s). One disregard amount applies to each claim. Full details of the relief, including the terms and conditions that apply, are set out on the Revenue website at www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx .
Further reliefs may arise where eligibility for specific relief(s) from income tax depends on the circumstances of the individual claimant.
Single Person Child Carer Tax Credit
The single person child carer tax credit is available to a ‘single person’ who has a qualifying child residing with him or her for the whole or greater part of the year of assessment.
A single person, for the purposes of this tax credit, is an individual who is not jointly assessed for tax as a married person or civil partner, living with his or her spouse or civil partner, or cohabiting with a partner.
A qualifying child includes:
- a child who was born in the tax year;
- a child who was under the age of 18 at the start of the tax year;
- an individual who is over the age of 18 at the start of the tax year if he or she is either in full-time education or permanently incapacitated by reason of mental or physical infirmity from maintaining themselves; or
- a permanently incapacitated individual who is over the age of 21, if he or she became permanently incapacitated before reaching the age of 21 or while in full-time education.
As noted above, the qualifying child must be resident with the claimant for the whole or greater part of the year of assessment. The greater part of the year of assessment is taken to be a period greater than six months.
However, where a child is in receipt of full-time education and is required to live away from home during term time, the child may be deemed to be resident with the claimant for the purposes of the credit. Full-time education includes all primary degrees and diplomas undertaken in public and private educational establishments where the course is for one year or more. It also includes programmes of training for any trade or profession (apprenticeships) where the child is required to devote the whole of his or her time to the training for a period of not less than 2 years.
Widowed Parent Tax Credit
The widowed parent tax credit may be available to a surviving spouse or civil partner in each of the five years following the year of bereavement.
The credit will be available where the surviving spouse or civil parent has not married, remarried, entered into a civil partnership or entered into a cohabiting relationship and has a qualifying child residing with him or her for the whole or part of the year.
A qualifying child, for the purposes of the widowed parent tax credit, will be determined on the same basis as for the single person child carer tax credit.
Finally, it is not clear from the information provided whether the Irish resident individual has entered a maintenance agreement with a former spouse or civil partner. Maintenance payments which are specifically for the benefit of a child or children may be payable on foot of a maintenance agreement or an order of the Court. Such payments are ignored for income tax purposes and the paying party cannot claim an income tax deduction for these payments. The receiving party will not pay income tax, universal social charge or PRSI on payments received on behalf of any child or children.
352. Deputy Pearse Doherty asked the Minister for Finance the revenue generated in capital gains tax from the disposal of cryptocurrency assets in 2018, 2019 and 2020; his views regarding the paying and filing of capital gains tax from the disposal of cryptocurrency assets, particularly a cryptocurrency (details supplied) for 2021; and if the Revenue Commissioners are monitoring same. [31122/21]
View answerI am advised by Revenue that statistics in respect of Capital Gains Tax (CGT), for the most recent years available, are published on the Revenue website in the release 'Summary of Capital Gains Tax Returns'.
These statistics include information on specific asset types, disposals of which give rise to taxable gains. However, gains from cryptocurrencies are not separately identified as an asset category on the relevant returns; as such, the information requested by the Deputy is not available.
Revenue considers cryptocurrencies, including Bitcoin, to be digital assets. Revenue expects that the buying and selling of cryptocurrencies by an individual is normally an investment as opposed to a trading activity. As such, the tax treatment of the gains and losses arising from such an activity generally falls to be considered by reference to CGT, with gains arising on the disposals chargeable to CGT at 33%. A disposal can occur where a person:
- sells or gifts cryptocurrency,
- trades or exchanges cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency),
- converts cryptocurrency to fiat currency (a currency established by government regulation or law), such as Euro, or
- uses cryptocurrency to obtain goods or services.
Losses on the disposal of cryptocurrency investments are allowed as a deduction against other chargeable gains. The first €1,270 of chargeable gains of individuals in a tax year are exempt from CGT.
Where an individual buys and sells cryptocurrency assets in the course of a trade, rather than as an investment, they will be subject to income tax, PRSI and USC on any profits arising on the disposal of those assets. Whether a person is trading or not depends on a number of factors such as the length of time they owned the cryptocurrency asset as well as the frequency and manner in which they are sold.
Where a person trades cryptocurrency assets, they may claim deductions for expenses incurred wholly and exclusively in the course of their cryptocurrency trade (such as transaction fees) and income tax loss relief rules apply where losses are incurred.
A person disposing of cryptocurrency assets is required to file a tax return and pay any tax due on a self-assessment basis. In monitoring tax compliance, Revenue can scrutinise returns received to ensure they comply with legislative provisions.
Ireland is an active contributor to the ongoing work, at both EU and OECD levels, to develop tax reporting frameworks that will provide information to tax authorities on transactions involving crypto assets and e-money and has also been engaged in work to better understand how such transactions are treated for tax purposes in different jurisdictions.
Further guidance on the tax treatment of cryptocurrency transactions can be found on the Revenue website in the Tax and Duty Manual.
353. Deputy Cian O'Callaghan asked the Minister for Finance if his attention has been drawn to the fact that persons on the employment wage subsidy scheme are still not being allowed to draw down their mortgages; the steps he is taking to address this; and if he will make a statement on the matter. [31123/21]
View answerSince the COVID-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. In relation to the particular issue of new mortgage lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who were on the Employment Wage Subsidy Scheme on a case by case basis and that they are taking a fair and balanced approach. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Therefore, if mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should in the first instance contact their lender directly on the matter.
However, there are certain consumer protection requirements which govern the provision of mortgage credit. For example, the 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 with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further 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 are 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. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.
Within this regulatory framework, the decision to grant or refuse an application for mortgage credit remains a commercial matter for the individual lender. Also a loan offer may contain a condition that would 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 offer is also a commercial and contractual decision for the lender.
Nevertheless, 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. If a mortgage applicant is not satisfied with how a regulated firm is dealing with them in relation to an application for credit or the drawn down of credit, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If the mortgage applicant is still not satisfied with the response from the regulated firm, he or she can refer the complaint to the statutory Financial Services and Pensions Ombudsman.
356. Deputy Neale Richmond asked the Minister for Finance if he has considered altering the fact that barristers must pay VAT at 23% for their professional fees; and if he will make a statement on the matter. [31259/21]
View answerAs the Deputy will be aware Irish VAT law must comply with the EU VAT Directive. Under the VAT Directive it is not possible to apply a reduced rate of VAT to professional legal fees.
357. Deputy Róisín Shortall asked the Minister for Finance the reason the Climate Action Plan contains no proposal to allow disabled drivers who avail of the drivers and passengers with disabilities scheme to claim back the costs of running an electric car when fossil fuel costs are refundable under the same scheme; if he will undertake to address this anomaly; and if he will make a statement on the matter. [31265/21]
View answerThe Drivers and Passengers with Disabilities Scheme provides for the remission or repayment of Vehicle Registration Tax (VRT) up to maximum limits. Section 135C(3)(b) of the Finance Act 1992 further provides that a Category A series production electric vehicle can avail of relief of up to €5,000 on the VRT due.
Under the Drivers and Passengers with Disabilities Scheme there is no differentiation between electric and other vehicles in terms of VRT/VAT relief. The amount of VRT due or paid on a vehicle is remitted or repaid up to the maximum relief applicable (€10,000 for VRT/VAT relief in most cases). As there is a separate VRT relief for electric vehicles provided for by Section 135C(3)(b) of the Finance Act 1992, the amount of VRT due or paid on an electric vehicle may be lower than the maximum relief permitted. In such a case the VRT relief will equate to the actual VRT due or paid. The VAT element of the refund is given regardless of whether it is an electric vehicle.
Members of the Scheme may claim payment of a fuel grant based on a per litre rate of €0.619 for petrol, €0.515 for diesel and €0.118 for liquefied petroleum gas (LPG) in respect of the mineral oil taxes applying to these products. An annual maximum of 2,730 litres applies in respect of a driver or passenger, and 4,100 litres in respect of an organisation. The fuel grant covers the excise tax elements of petrol, diesel and LPG, it does not cover electricity used to recharge electric vehicles. However, it should be noted that electricity supplied for household use is not subject to Electricity Tax.
358. Deputy Holly Cairns asked the Minister for Finance the way in which his Department and agencies under his remit are meeting the requirement to have a statement on the compliance of their websites and mobile applications with the regulations under the directive 2016/2102 (EU), as articulated in SI No. 358/2020 - European Union (Accessibility of Websites and Mobile Applications of Public Sector Bodies) Regulations 2020; and if he will make a statement on the matter. [31283/21]
View answer359. Deputy Holly Cairns asked the Minister for Finance the way in which his Department and agencies under his remit are meeting the requirement to subject to Regulation 6, public sector bodies shall, in accordance with Regulation 3, take necessary measures to make their websites and mobile applications more accessible by making them perceivable, operable, understandable and robust under the directive 2016/2102 (EU), as articulated in SI No. 358/2020 - European Union (Accessibility of Websites and Mobile Applications of Public Sector Bodies) Regulations 2020; and if he will make a statement on the matter. [31301/21]
View answerI propose to take Questions Nos. 358 and 359 together.
My Department is hosted on the Gov.ie website which currently hosts 15 of all 19 Departments and there is a compliant accessibility statement available under the ‘Accessibility’ section on the Gov.ie website. Gov.ie partially complies with the double-A WCAG 2.1 standards and the 4 principles of accessibility in that it is perceivable, operable, understandable and robust. This is similar to most other government sites across the EU. One way in which accessibility is being improved is by improving the level of plain English used for services on the site to allow users of all levels to find and understand information as quickly as possible. The Gov.ie team have performed multiple accessibility reviews since the website has gone live and has engaged with an accessibility expert to outline all accessibility requirements. This is an ongoing process. Following the last accessibility audit, 65 issues were fixed and the Office of the Government Chief Information Officer has since released updates to the core code of the site to improve accessibility.
The following is the position in relation to bodies under the aegis of my Department that are within the scope of Directive 2016/2102 (EU), as articulated in SI No. 358/2020:
The Central Bank of Ireland’s accessibility statements for its websites are currently under review and will be updated later this year. The accessibility statement for the Bank’s main website will be published later this month and this will include information on the areas of focus to ensure compliance. Statements for the remaining websites will follow. The Central Bank’s main website is partially compliant with the harmonised European Standard Accessibility requirements for ICT products and services (based on Web Content Accessibility Guidelines 2.1). The accessibility standard for the Bank’s other websites is under review and a roadmap for enhancement is expected later this year.
The Irish Fiscal Advisory Council has advised that its website accessibility statement will be published shortly. The Fiscal Council recognises the importance of ensuring that its website is accessible and ensures that its videos are subtitled, that images have alt text (a short written description of an image, which makes sense of that image when it can't be viewed) and that content on the website is machine readable so that it is compatible with immersive readers. It is committed to ensuring that its website continues to meet the basic four POUR principles (Perceivable, Operable, Understandable, Robust) in respect of accessibility and will draft future policies to ensure that this is achieved on an ongoing basis.
While the current website of the Financial Services and Pensions Ombudsman (FSPO) meets the majority of the Directive’s requirements, the FSPO is developing a new website which will be based on the requirements of the Directive. The new website will include an Accessibility Statement, as outlined in S.I. No. 358/2020, confirming the FSPO’s compliance with the regulations under the Directive, as well as details of a mechanism through which users can provide feedback on the accessibility of the FSPO’s website/app.
Home Building Finance Ireland (HBFI) has advised that it is in compliance with the Web Accessibility Directive in respect of HBFI.ie. An Accessibility Statement can be found on the ‘Legal’ section of its website under ‘Accessibility’ outlining the steps taken in this regard.
The Irish Financial Services Appeals Tribunal is currently working with an IT consultant to ensure that all content on its website is in compliance with the Web Accessibility Directive and expects to publish its accessibility statement in the near future.
The National Asset Management Agency (NAMA) has a statement of compliance which can be viewed under the ‘Accessibility’ section of its website. While NAMA does not provide services to the public, it advises that it is committed to making the information on this website accessible to all in compliance with the Directive.
The National Treasury Management Agency (NTMA) is in compliance with the Web Accessibility Directive in respect of its primary website. A programme of works is currently being undertaken in respect of secondary NTMA websites and, following same, all secondary websites will be in compliance with the Directive. The NTMA has an accessibility statement in place that can be found under the ‘Accessibility’ section on its website and a contact mechanism is available in the event that content is not accessible, in line with Article 7 of the Web Accessibility Directive. The Accessibility Statement will be updated shortly to take account of outstanding requirements.
The Office of the Comptroller and Auditor General (OCAG) is in compliance with the accessibility requirements of S.I. No. 358 of 2020. The Office is currently preparing an Accessibility Statement which will be available on its website soon. OCAG has taken measures to make the website more accessible, and thereby perceivable, operable, understandable and robust, through the installation of accessibility software. It has also engaged a specialist company to conduct an accessibility scan and assessment review of the website, in order to optimise its accessibility.
The Office of the Revenue Commissioners maintains an Accessibility Statement on its website. In order to comply with Directive 2016/2102 (EU), its public-facing web-based systems and mobile app service are built to Level AA requirements based on Web Content Accessibility Guidelines. Revenue has advised that it keeps all such services under review and addresses any accessibility issues identified as quickly as possible and ensures that new system enhancements and developments continue to meet the accessibility standards required.
The Strategic Banking Corporation of Ireland (SBCI) has advised that it is in compliance with the Web Accessibility Directive and that an Accessibility Statement is available under the ‘Disclaimer’ section on their website outlining the steps taken in this regard.
The Tax Appeals Commission (TAC) is in the process of drafting an Accessibility Statement to meet its obligations and this will be published on its website soon. The TAC has currently adopted universal accessibility and the W3C (World Wide Web Consortium) WCAG V2.0 Level AA in the design and development of its website. However, the Commission is currently redeveloping its website in the short and medium term and accessibility has been taken into account during the design process, as part of the providers’ commitments to the project. The new website is expected to be published in the coming weeks.
360. Deputy Francis Noel Duffy asked the Minister for Finance his views on a recent article by the Economic Social and Research Institute (details supplied); if the recommendations have been considered by his Department in conjunction with the Department of Housing, Local Government and Heritage considering the proposed significant increase in provision of housing; and if he will make a statement on the matter. [31379/21]
View answer361. Deputy Francis Noel Duffy asked the Minister for Finance if he will engage with the Minister for Housing, Local Government and Heritage to consider the recommendations outlined in a recent article by the Economic Social and Research Institute (details supplied); and if he will make a statement on the matter. [31380/21]
View answerI propose to take Questions Nos. 360 and 361 together.
The paper to which the Deputy refers essentially calls for higher levels of borrowing to increase public spending on housing, but it is important that we place this discussion in full context.
The Government’s response to the Covid-19 pandemic has had a significant impact on our deficit. In 2020, a general government deficit of over €18 billion was recorded. This is the equivalent of nearly 9 per cent of modified gross national income, or GNI*, or 5 per cent of GDP. For this year, the Stability Programme Update projected a deficit of another €18 billion.
Against this background, Budget 2021 still allocated €3.1 billion towards housing, the highest level of funding ever committed. Total expenditure in this area has more than doubled since 2016 and is 41 per cent above the previous peak level in 2008. The capital spending on housing for 2021 is 26 per cent higher than the previous year, and almost two and a half times what it was in 2017, demonstrating the massive commitments Government has already made in the area of housing.
While public investment has an obvious role in alleviating housing market pressures, there are also significant non-fiscal constraints. In particular, the public health measures needed to suppress Covid-19 have placed a direct restriction on the construction of new housing. The industry is now facing increased costs and difficulty sourcing building materials as a result of the pandemic, high international demand, and Brexit. There are also skills shortages within the construction sector, which is why the Government is providing significant investment in skills and trades. As acknowledged in the report, simply increasing expenditure will not negate these capacity constraints.
From a broader fiscal perspective, as we move beyond the extraordinary events of the pandemic, it is important to remember that it is neither sustainable nor prudent to run perpetual deficits. This fact is underlined by the European Commission’s recent announcement that the General Escape Clause of the EU fiscal rules should not extend beyond 2022.
Nevertheless, the Government is determined to fulfil its Programme for Government commitments to increase the social housing stock by 50,000 during its term of office. While capital expenditure allocations are a matter for the Minister for Public Expenditure and Reform, my Department and I are in regular contact with our counterparts in the Department of Housing, Local Government and Heritage through the Cabinet Committee on Housing and various other forums. Significant capital investment has been provided to ensure more people have access to quality, affordable housing. The Government will also publish its upcoming Housing for All Strategy later this summer, which will build on our commitments in the Programme for Government. However, we must also be cognisant of other, non-financial constraints on housing development and the need to ensure public investment is made in a sustainable manner.
362. Deputy Louise O'Reilly asked the Minister for Finance if the interest penalty for tax warehousing for self-employed persons will be deferred until 2022. [31383/21]
View answerFinance Act 2020 legislated for warehousing of certain liabilities of self-assessed income taxpayers, including the self-employed, whose income has been affected by the restrictions introduced to combat Covid-19. For the self-employed, the liabilities that may be warehoused (“Covid-19 income tax”) are the balance of self-assessed income tax, PRSI and USC for 2019 and preliminary tax, PRSI and USC for 2020, which were due to be paid on or before 31 October 2020, or 10 December 2020 where the individual filed electronically through ROS (“Period 1”); and, in certain circumstances, the balance of self-assessed income tax, PRSI and USC for 2020 and preliminary tax, PRSI and USC for 2021, which are due to be paid on or before 31 October 2021, or 17 November 2021 if filed electronically.
The legislation currently provides that “Covid-19 income tax” will be subject to no interest for a period of 12 months and 3% interest per annum thereafter until the liability is paid in full. Where an individual is eligible to warehouse the balance of 2020 income tax, PRSI and USC and preliminary income tax, PRSI and USC for 2021, s/he can avail of 0% interest on the warehoused amounts for an additional 12 months.
As part of the Economic Recovery Plan announced by the Government on 1 June, the debt warehousing scheme will be extended to the end of 2021 for all eligible taxpayers. As a result, self-assessed income taxpayers who warehoused the balance of income tax for 2019 and preliminary tax 2020 will have an additional period of over 12 months, up to 31 December 2022, during which no repayment of the warehoused liabilities is required and no interest will accrue on those liabilities. Such taxpayers will not be required to repay these liabilities until January 2023. Interest at a reduced rate of c. 3% per annum will apply from that date.
Where a self-assessed taxpayer is eligible to warehouse the balance of income tax for 2020 and preliminary tax 2021 (the liabilities due to be paid in October / November 2021), the extension will also suspend collection of these liabilities, interest-free, until 31 December 2022.
Some self-employed taxpayers may be availing of the other warehousing schemes. A similar extension is also proposed for the warehousing schemes for PAYE (Employer) liabilities, VAT and excess Temporary Wage Subsidy Scheme (TWSS) payments. Currently, the liabilities that can be warehoused are those relating to “Period 1”, the period in which the ability of a business to trade was restricted due to the impact of Covid-19. The proposed extension of the scheme will allow business to warehouse additional liabilities for periods up to and including December 2021. Collection of these liabilities will be suspended, interest-free, until 31 December 2022. Repayments will commence with effect from 1 January 2023, at a reduced interest rate of c. 3% per annum.
363. Deputy Jackie Cahill asked the Minister for Finance if he will consider extending the 9% tax on hospitality to the end of September 2022 rather than the beginning of the same month (details supplied); and if he will make a statement on the matter. [31452/21]
View answerThe Government’s decision to extend the concessionary low 9% VAT rate to the hospitality sector until end August 2022 is a temporary measure that is aimed at giving an additional support to the sector where businesses can now begin to open up gradually as the necessary Covid related restrictions are gradually eased. Together with the wide range of other support measures that the Government is making available for businesses affected by the pandemic, the temporary low rate will assist the businesses over the initial stages of their recovery and help support jobs. Given the many competing demands for publicly funded support, and in the context of future uncertainty, the measure is designed as a temporary change, with a sunset clause included in the enacting legislation.
It is important to note that VAT is normally administered on a bi-monthly basis, with traders required to make returns and account for VAT 6 times per year: in respect of January/February, March/April, May/June, July/August, September/October and November/December. For ease of administration for traders, any changes to VAT rates are normally made at the end of one of these VAT periods. This has informed the Government’s approach in the present case.
364. Deputy Jackie Cahill asked the Minister for Finance the taxation rates that are applied in the case of compensation being paid to a landowner for a compulsory purchase order being made against the owner’s property for the purpose of upgrading a public road; and if he will make a statement on the matter. [31460/21]
View answerThe acquisition of land by way of compulsory purchase order is the disposal of an asset by the landowner for the purposes of Capital Gains Tax (CGT). Any chargeable gain arising on such a disposal is subject to CGT at a rate of 33%. The first €1,270 of total chargeable gains in respect of an individual in any year of assessment is exempt.
Should the landowner meet the conditions of the revised CGT entrepreneur relief in respect of the disposal, a lower CGT rate of 10% may apply, subject to a lifetime limit of €1m.
The disposal for CGT purposes will occur by reference to the date on which the compensation proceeds are received and any CGT liability arising will be payable by reference to that date. Where the compensation is received between 1 January and 30 November, any CGT liability must be paid by 15 December of the same year. Where the compensation is received between 1 December and 31 December, any CGT liability must be paid by 31 January of the next year.
A self-assessment tax return should be completed and returned to Revenue on or before 31 October in the year after the date of disposal. The obligation to make a return exists even where no tax is due because of the use of reliefs or allowable losses.
365. Deputy Michael Healy-Rae asked the Minister for Finance if the case of a company (details supplied) will be addressed; and if he will make a statement on the matter. [31475/21]
View answerSection 11 of the Finance Act 2020 provides the legislative basis for the Covid Restrictions Support Scheme (CRSS). The scheme is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities the profits of which are chargeable to tax under Case 1 of Schedule D. A qualifying business must operate from a business premises located in a region that is subject to restrictions introduced in line with the Government’s Living with COVID-19 Plan.
The scheme is designed to help traders meet their costs at a time when they cannot provide goods or services to their customers from their business premises, or can only do so to a limited extent, due to COVID-19 related restrictions. The legislation also provides that a claim for the CRSS can be made no later than eight weeks from the date on which the ‘claim period’ commences.
I am advised by Revenue that the business in question registered for the CRSS on 17 November 2020 and submitted its first claim on 4 December 2020 and correctly received payment for the ‘claim period’ 19 October 2020 to 6 December 2020. The business did not submit another claim until 17 May 2021 and correctly received payment for the ‘claim period’ 15 March 2021 to 16 May 2021. Under the legislation, it is not possible to provide CRSS payments to the business from 30 December 2020 to 14 March 2021 as these dates fall outside of the 8-week claim time limit.
Revenue has also confirmed that the business, which has now reopened, has received CRSS ‘restart payments’ and is no longer eligible for the scheme.
370. Deputy Jim O'Callaghan asked the Minister for Finance the position in relation to reports that the Irish affiliate of a company (details supplied) paid no tax in 2020 on profits of €260 billion; and if he will make a statement on the matter. [31575/21]
View answerIt is not appropriate for me to comment on the affairs of individual taxpayers and I do not intend to do so. I am aware that reports of this nature frequently refer to companies which were not Irish tax resident and as a result they were not subject to tax in Ireland. However taxation in other jurisdictions, in particular in the United States (US) following extensive tax reforms introduced there in 2017, is likely to have applied.
The so-called “Double Irish” exploited the different definitions of corporate tax residency in Ireland and the United States (US) while taking advantage of certain provisions of US tax law that allowed for a deferral of US taxation. It involved the use of an Irish incorporated company which was not Irish tax resident under Irish corporate tax residence rules and hence not within the charge to Irish corporation tax. In this context, it should be noted that Irish corporate tax residence rules were similar to those in the OECD’s Model Tax Convention on Income and on Capital.
In the absence of US reforms to address this issue, Ireland changed our corporate tax residence rules in Finance (No. 2) Act 2013 and Finance Act 2014. Thereafter, the US introduced the Tax Cuts and Jobs Act in 2017. It is my understanding that one of the anti-avoidance measures in that Act imposes a minimum tax rate on US multinational companies. The measure is referred to as “GILTI”, short for “global intangible low-taxed income”. It ensures that US multinationals pay tax on the income earned by US companies outside the US from intangible assets such as patents, trademarks, and copyrights. The actions taken by the Irish and US governments have therefore eliminated or significantly reduced the tax benefits to multinationals of using this type of deferral structure.
It is also important to highlight that reform of the international tax rules has been an ongoing process since 2013. Ireland has very much played its part in reframing these rules for the benefit of business and citizens, and we have proactively and diligently reformed our tax code in line with the new international norms. In this context, a lot has been achieved through the OECD’s BEPS process to address aggressive tax planning. We now have far more robust international tax rules and safeguards than existed a decade ago to prevent abuse, arbitrage, base erosion and profit shifting.
371. Deputy Paul Murphy asked the Minister for Finance the reason the Revenue Commissioners view cohabiting couples as two individual single persons even those who have children together given that for the purpose of payments to families, the Department of Social Protection recognise cohabiting couples as a family unit (details supplied). [31576/21]
View answerIn situations where a couple is cohabiting, rather than married or in a civil partnership, each partner is treated for the purposes of income tax as a separate and unconnected individual. Because they are treated separately for tax purposes, credits, tax bands and reliefs cannot be transferred from one partner to the other.
The basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income.
To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage. Cohabitants do not have the same legal rights and obligations as a married couple or couple in a civil partnership which is why they are not accorded similar tax treatment to couples who have a civil status that is recognised in law. Any change in the tax treatment of cohabiting couples can only be addressed in the broader context of future social and legal policy development in relation to such couples.
I have been advised by Revenue that from a practical perspective, it would be very difficult to administer a regime for cohabitants which would be the same as that for married couples or civil partners. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting. It would also be difficult to establish when cohabitation started or ceased. There would also be legal issues with regard to ‘connected persons’. To counter tax avoidance, ‘connected persons’ are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce, in respect of persons connected with a cohabiting couple where the couple has no legal recognition. There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band and the ability to transfer credits. However, their legal status has wider consequences from a tax perspective both for themselves and persons connected with them.
Furthermore, the difference in tax treatment for married couples is not confined to Income Tax, and is also a feature of other tax heads, such as Capital Acquisitions Tax. Therefore, any changes in the tax treatment could only be considered in the broader context of the tax system and future social and legal policy development more generally, given that the legal status of married couples has wider consequences than from a tax perspective.
The arrangements and associated legislation for the purposes of payments or allowances under the remit of the Department of Social Protection in relation to married couples, civil partners and cohabiting couples are a matter for the Minister for Social Protection and her Department.
372. Deputy Ged Nash asked the Minister for Finance his views on the finding from a recent report (details supplied) which states that restricting some of the less well targeted, tax expenditure reliefs and exemptions that apply to taxes such as CGT and CAT could not only contribute to raising significant sums of tax revenue but could also result in a simpler, more efficient tax system; his plans to examine such reliefs in order to put Exchequer funding on a sustainable footing, especially in view of the proposed international changes on corporation taxation; and if he will make a statement on the matter. [31612/21]
View answerI welcome the ESRI report entitled “Options for raising tax revenue in Ireland,” and note their own wording in the report that they “do not seek to advocate any particular tax-raising measure,” but instead seek “to provide evidence for policymakers who are in a position to make these decisions.”
This is the basis on which I and my officials consider such findings, and as such any changes to tax policy are also considered within a wider framework of the fiscal space, impacts on income distribution and other concerns.
With regards to the specifics of Ireland’s Capital Acquisitions Tax (CAT), I would note that the recent OECD paper entitled “Inheritance Taxation in OECD Countries,” acknowledged our CAT regime as the only gift or inheritance tax applied over lifetime transfers, rather than a given time period, in the OECD. The analysis highlights the advantages of the Irish system, in particular with regard to horizontal equity, by ensuring that those who receive the same amount of wealth pay the same amount of tax. In this context, it is also important to consider that Ireland’s CAT is much less generous with exemption thresholds than many other OECD countries, as CAT exemptions apply on a lifetime basis.
In relation to Capital Gains Tax (CGT) and more specifically the reference in the report to the Revised Entrepreneur Relief, I would refer to the external review by Indecon Consultants published as part of the Budget 2020 documentation. A number of possible modifications, amendments and potential improvements were suggested in respect of the relief. These recommendations are under continuous review through the annual Tax Strategy Group (TSG) and Budget process.
Referring to the Principal Private Residence Relief, as the ESRI rightly point out, a removal of this relief could have a significant impact on 'lock-in' effects. Given the current economic impact of the pandemic, it is important to ensure CGT does not act as a barrier to the reallocation of firms and workers.
As with all taxes, a low rate can be funded through a wide base, similarly a narrower base designed to encourage/reward certain behaviour through targeted reliefs requires a higher rate. My Department will continue to examine current reliefs to ensure the sustainability of revenue while balancing the need for targeted incentives and reliefs to address certain market failures through the annual budgetary cycle.
373. Deputy Ged Nash asked the Minister for Finance his views on the finding from a recent report (details supplied) that eliminating some of the fossil-fuel tax reliefs could generate a significant amount of revenue while simultaneously promoting a cleaner environment; his plans to examine the elimination of such fossil-fuel tax reliefs; and if he will make a statement on the matter. [31613/21]
View answerWhile there is no globally accepted definition of Fossil Fuel Subsidies, the OECD defines a subsidy as the result of a government action that confers an advantage on consumers or producers, in order to supplement their income or lower their costs. This definition includes tax expenditures such as tax rebates, tax repayments and reduced tax rates, as well as direct subsidies.
The Central Statistics Office (CSO) Fossil Fuel Subsidies 2019 publication estimates total fossil fuel subsidies amounted to €2.4 billion in 2019. Direct fossil fuel subsidies accounted for 11% of total fossil fuel subsidies in 2019 while indirect subsidies arising from revenue foregone due to tax abatements accounted for 89%. The CSO estimates that the largest of these reliefs was the exemption from excise and carbon taxes of jet kerosene used for commercial flights, costing €634 million per year, while the lower rate of fuel duty applied to auto-diesel relative to petrol is estimated to amount to €400 million per year. The ESRI May 2021 Budget Perspectives Paper referenced by the Deputy refers to the possible removal of these reliefs and the potential additional revenue raised.
With regard to the exemption on aviation fuel for commercial flights, the Deputy will be aware that 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. The Commission is working on a proposal to revise the ETD and it is expected that changes to the current fossil fuel related reliefs and exemptions will be proposed.
On a national level, it is recognised that gradual removal of fossil fuel subsidies will play an important role in phasing out reliance on fossil fuels in the transition to a low carbon economy. To achieve this transition with minimum disruption, the Programme for Government commits to providing timely signposts as well as regulatory changes and incentives giving society and industry the chance to adapt.
As part of the annual budget process, the Tax Strategy Group will examine indirect environmental tax subsidies and examine options in this regard, having due regard to the EU legislative framework in this area.
374. Deputy Ged Nash asked the Minister for Finance his views on the recently reported comments of the Chief Executive of the NTMA who stated that short to medium term environment for debt refinancing will be benign; his further views on the recent comments from the President of the European Central Bank that strong policy support will continue to provide a bridge over the pandemic and well into the economic recovery (details supplied); the status of his stated a proposed deficit reduction framework and a medium-term fiscal target in the forthcoming Summer Economic Statement in view of favourable borrowing conditions; and if he will make a statement on the matter. [31614/21]
View answerI note the recently reported comments by the National Treasury Management Agency (NTMA) Chief Executive which the Deputy refers to.
I am also well aware of the support provided by the European Central Bank (ECB) during this pandemic. The length of time such extraordinary monetary policy measures will be needed is a matter entirely for the ECB. The support provided by the ECB during the pandemic has allowed Governments across Europe to utilise public sector balance sheets to compensate for the dramatic reduction in personal and corporate incomes. The level of support provided has been unprecedented and entirely appropriate given the circumstances. While considerable uncertainty remains, particularly in relation to new variants, we can be hopeful that the worst of the pandemic has passed.
Given these circumstances the Government announced the extension and gradual unwinding of temporary pandemic supports in the Economic Recovery Plan, published on 1st June. The cost of the extensions and other measures announced in the Plan will be integrated into revised high-level deficit projections to be published in the Summer Economic Statement (SES). The SES will also set-out a budgetary framework within which Budget 2022 can be delivered and will be published in the coming weeks.
375. Deputy Bernard J. Durkan asked the Minister for Finance further to Parliamentary Question No. 179 of 25 May 2021, if consideration will be given to deregistering a vehicle given that the vehicle in question was never taxed (details supplied); and if he will make a statement on the matter. [31616/21]
View answerAs previously outlined in my reply to Parliamentary Question No. 179 of 25 May 2021, Revenue has advised me that vehicles are only de-registered and vehicle registration tax (VRT) repaid in very exceptional circumstances. This includes where the exceptional circumstances occur within seven working days of the date of registration and where the vehicle has not been licensed for use in a public place, i.e. road tax has not been paid and, that the application for de-registration is received within 21 days of the date of registration.
In 2020 Revenue agreed, on an exceptional basis, to de-register the vehicle in question due to the COVID-19 pandemic and its unexpected impact on business. The company re-registered the vehicle in question in January 2021 despite the general awareness of the ongoing uncertainty and impact of the pandemic on business. It is not possible for Revenue to agree to deregister the vehicle for a second time as it was road taxed in 2020, has mileage accumulated and the request to de-register the vehicle was received more than 21 days after registration.
It is important that Revenue applies the relevant criteria to any request to de-register a vehicle, thereby ensuring that the integrity of the vehicle registration system is maintained. This provides assurance to purchasers that an unregistered vehicle is new.
376. Deputy Neale Richmond asked the Minister for Finance the level of consultation there is into Ireland’s tax treaty policy given that a statement is due on same by the end of 2021; and if he will make a statement on the matter. [31692/21]
View answerI made a commitment in the January 2021 Update to Ireland's Corporation Tax Roadmap, to publish a tax treaty policy statement taking account of International developments.
I launched a public consultation on this commitment on 7 April 2021 which ran until 7 May 2021. The aim of the public consultation was to gather the views of interested parties in relation to aspects of Ireland’s tax treaty policy, to ensure it can continue to support economic growth and prosperity, particularly in relation to new or emerging sectors of the economy, the consultation also had a particular focus on the our treaty policy with developing countries.
The consultation received 15 responses from across society including from members of the public, NGOs, business groups, and accountancy firms. The submissions received will be published on the Department of Finance website in the coming days and it is my intention to publish a treaty policy statement in the second half of 2021. The content of the submissions received is being considered in detail and my officials have arranged follow up stakeholder consultations which will take place over the coming weeks to discuss the submissions and to inform future policy development to the greatest possible extent.
379. Deputy Thomas Gould asked the Minister for Finance if a lending agency can refuse a person a loan based on their age. [31817/21]
View answerThere are certain regulatory requirements governing the provision of credit to consumers.
For example, 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, including the age of the borrower.
A regulated entity must also gather and record sufficient information from the consumer prior to offering, recommending, arranging or providing a product or service appropriate to that consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to provide a professional service and must include details of the consumer’s needs and objectives, personal circumstances (including age where relevant) and their financial situation.
Prior to offering, recommending, arranging or providing a credit product to a personal consumer, a lender must carry out an assessment of affordability to ascertain the consumer’s likely ability to repay the debt, over the duration of the agreement. A regulated entity must take account of the result of the affordability assessment when deciding whether a personal consumer is likely to be able to repay the debt for that amount and duration in the manner required under the credit agreement.
When assessing the suitability of a product or service for a consumer, the regulated entity must, at a minimum, consider and document whether, on the basis of the information gathered:
- the product or service meets that consumer’s needs and objectives;
- the consumer is likely to be able to meet the financial commitment associated with the product on an ongoing basis and is financially able to bear any risks attaching to the product or service;
- the consumer has the ability to repay the debt in the manner required under the credit agreement, on the basis of the outcome of the assessment of affordability; and
- the product or service is consistent with the consumer’s attitude to risk.
In addition, the 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. The 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 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.
Within the parameters of this consumer protection regulatory framework, it is then a commercial matter for each lender to determine its own lending policies and to make its own decisions on individual applications for credit. However, if a loan applicant is not satisfied with how a regulated entity is dealing with them, or they believe that the regulated entity is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated entity. If they are still not satisfied with the response from the regulated entity, the response to their complaint from the regulated entity is required to include details for the borrower on how to refer their complaint to the Financial Services and Pensions Ombudsman.
