Tuesday, 27 Jul 2021

Written Answers Nos. 395-411

Tax Code

Questions (395)

Brendan Griffin

Question:

395. Deputy Brendan Griffin asked the Minister for Finance if he will reconsider this Deputy’s previous proposal to eliminate capital gains tax for a two year window for sellers selling homes, sites or derelicts and currently uninhabitable properties to first-time buyers as a measure to bring more properties on to the market and give the first-time buyer a more competitive edge in that market versus investors; and if he will make a statement on the matter. [40435/21]

Written answers

Minister for Finance

As previously indicated to the Deputy, there are a number of existing reliefs that are available to property owners selling their home, and to first-time buyers such as the Help to Buy scheme and certain reliefs under the Capital Tax area which I outlined in my previous response.

I am very conscious of the need to bring more properties onto the market and to give first time buyers a more competitive edge in the market versus investors. In this regard, the forthcoming Housing for All Strategy will bring forward a number of proposals to help address the broader housing needs of our society. It should be noted however that, as of now, I have no plans to make any changes to the CGT rate in the way suggested by the Deputy. However, that said, all taxes and potential taxation options are of course constantly kept under review.

Finally, I wish to reiterate the importance I place on improving the position for first time buyers by pointing out that the rationale for the introduction of the recent 10% stamp duty charge on the multiple purchase of houses is to disincentivise such purchases by institutional investors with a view to levelling the playing field for first time buyers and others interested in buying a home to live in.

International Agreements

Questions (396)

Gerald Nash

Question:

396. Deputy Ged Nash asked the Minister for Finance the number of inquiries the Revenue Commissioners or his Department have received from companies or the Government of Malta regarding whether a new company should be deemed Irish resident or Maltese resident under the terms of the Competent Authority Agreement signed between Malta and Ireland in November 2018; the number of these cases the Revenue Commissioners determined that a company should be deemed Irish resident or Maltese resident; and if he will make a statement on the matter. [40465/21]

Written answers

Minister for Finance

The Competent Authority Agreement (CAA) under the Ireland-Malta Double Taxation Convention 2008 records that the Irish and Maltese competent authorities for the purpose of that Convention have agreed that, in relation to the tax avoidance structure outlined in the CAA, the Double Taxation Convention’s deeming of a company – incorporated in Ireland but managed in Malta – to be resident in Malta only, does not serve the purposes of the Double Taxation Convention and is not “for those purposes”.

The effect of the CAA is that section 23A(2) of the Taxes Consolidation Act 1997, which can result in a company incorporated in Ireland being regarded as not tax-resident in Ireland, will not apply to an Irish-incorporated but Malta-managed company in the circumstances outlined in the CAA. Accordingly, under section 23A of the Taxes Consolidation Act 1997, such an Irish-incorporated company will be resident in Ireland and the relevant payments to it will come within the charge to Irish corporation tax.

Revenue has set out clearly the effect of the CAA and neither my Department nor Revenue has received any enquiries in relation to it.

Covid-19 Pandemic Supports

Questions (397)

Jackie Cahill

Question:

397. Deputy Jackie Cahill asked the Minister for Finance if a person (details supplied) can receive a backdated payment for the Covid-19 restrictions support scheme from the original date of their entitlement to the payment; and if he will make a statement on the matter. [40489/21]

Written answers

Minister for Finance

The Covid Restrictions Support Scheme (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.

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. For the purposes of the scheme, a business premises is defined as a building or other similar fixed physical structure from which a business activity is ordinarily carried on.

Revenue has advised me that, to date, no application for the CRSS has been received from the business in question. If the business considers that it meets the overall eligibility criteria for the scheme, it should make an application to Revenue, which can then be considered. Once an application is received and approved, the business will receive weekly payments until it is no longer significantly impacted by public health restrictions.

The legislation requires that a claim must be made no later than eight weeks from the date on which the ‘claim period’ commences. For example, if the business in question made a CRSS claim in respect of the week beginning Monday 26 July 2021, then it would be entitled to payments from 31 May 2021. There is no legislative provision to provide payments for periods earlier than 31 May (i.e. eight weeks).

Revenue has provided extensive guidance on the CRSS which is available on the Revenue website, which may be of assistance to the business in determining whether it meets the eligibility criteria for the scheme.

Departmental Funding

Questions (398)

Jackie Cahill

Question:

398. Deputy Jackie Cahill asked the Minister for Finance the funding that has been allocated by his Department for projects and initiatives in County Tipperary over the past 12 months; and if he will make a statement on the matter. [40495/21]

Written answers

Minister for Finance

I can inform the Deputy that the Department of Finance has no record of any funding being allocated to projects or initiatives in County Tipperary in the past 12 months.

I wish to note that my response refers only to Department of Finance records and I cannot comment on behalf of other Government Departments.

Illicit Trade

Questions (399, 400)

Brendan Smith

Question:

399. Deputy Brendan Smith asked the Minister for Finance if the authorities have observed the presence of illegal tobacco manufacturing facilities on this island; if so, the measures in place to tackle such criminality and to protect State revenues and public health; and if he will make a statement on the matter. [40517/21]

Brendan Smith

Question:

400. Deputy Brendan Smith asked the Minister for Finance if the significant increase in the amount of illicit roll-your-own tobacco seized at Irish airports in 2020 indicates a greater focus by criminal gangs on this category of tobacco in particular; if so, the measures that will be implemented to tackle this criminality; and if he will make a statement on the matter. [40518/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 399 and 400 together.

I am advised that Revenue uses a range of measures to identify and target the smuggling, supply or sale of illicit tobacco products, with a view to disrupting the supply chain, seizing the products and where possible, prosecuting those involved. Revenue’s strategy involves developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources on a risk-focused basis.

I am aware that Revenue monitors trends in the illicit tobacco trade on an ongoing basis and adjusts its actions and redeploys its resources to counter any new developments or methodologies employed by the criminal gangs involved in that trade. The smuggling of tobacco products has a transnational and cross border dimension and in addition to Revenue’s ongoing cooperation with An Garda Síochána in this area, I am advised that Revenue also works closely with its counterparts in other jurisdictions including colleagues in Northern Ireland through the Cross Border Joint Agency Task Force (JATF), and international bodies including OLAF (the EU’s anti-fraud agency), Europol and the World Customs Organisation.

I am advised by Revenue that it is conducting ongoing joint investigations with HMRC targeting the illicit production of tobacco products. Since March 2018, four illicit cigarette manufacturing facilities have been discovered and dismantled on the island of Ireland as result of cross border investigations by the Cross-Border Joint Agency Task Force (JATF). These successful outcomes include the discovery of an illicit cigarette manufacturing facility in Co. Armagh in July this year as a result of a joint investigation by Revenue and HMRC.

Revenue seized more than 7,000 tonnes of illicit tobacco in 2020 and a further 7,000 tonnes of illicit tobacco in the first six months of 2021. The majority of these seizures occurred at Dublin Port. I am advised that the increase in detection and seizure of illicit tobacco is as a result of continued cooperation and intelligence sharing with other national and international law enforcement agencies and Revenue’s advanced profiling methods and strategic use of appropriate detection technology.

I commend Revenue and all the relevant State agencies for their work in this important area and I am satisfied that there is an appropriate focus on tackling this form of criminality.

Question No. 400 answered with Question No. 399.

Question No. 401 answered with Question No. 295.

Question No. 402 answered with Question No. 295.

Departmental Funding

Questions (403)

Johnny Guirke

Question:

403. Deputy Johnny Guirke asked the Minister for Finance the last occasion on which a Department-wide review of all funding within his Department took place; the frequency of such reviews; and if he will make a statement on the matter. [40635/21]

Written answers

Minister for Finance

I can inform the Deputy that the Annual Estimate for the Supply Services for each Department sets out the cost of each Departmental function – for which the Dáil is asked to appropriate money by way of a separate Vote – and outlines the set of outputs to be delivered within those functions.

The Budget Estimate Volume (October) sets out a formal description of the services to be financed from the Vote and the detailed allocations of all the expenditure on programmes and services within the ambit.

The Revised Estimates Volume (December) gives more detail on each Strategic Programme in gross expenditure terms for each subhead within the programme along with Key Outputs and Public Service Activities.

All spending proposals for Government must be submitted to DPER for appraisal in light of overall fiscal and economic policy and in light of availability of resources. Formal sanction by the Minister for PER in respect of voted expenditure is an essential element in the management and control of public expenditure

At the end of each financial year, my Department is required – under Section 22 of the Exchequer and Audit Departments Act, 1866, (as amended by the C&AG Amendment Act, 1993) – to prepare an Appropriation Account, in respect of each Supply Grant for submission to the C&AG before the 1st April of the following year.

The statutory requirement is for the Appropriation Account to provide details of the outturn for the year against the amount provided by Dáil Éireann based on the cash amounts of payments and receipts. The 2020 Appropriation Account for the Department of Finance was submitted to the C&AG on the 30th of March 2021.

Tax Code

Questions (404)

Brendan Griffin

Question:

404. Deputy Brendan Griffin asked the Minister for Finance if he will provide an update on the public consultation process on corporation tax; if he has received submissions from County Kerry; and if he will make a statement on the matter. [40679/21]

Written answers

Minister for Finance

You may be aware that on 1 July 2021, the OECD Inclusive Framework reached agreement, but not consensus, on key aspects of the two-pillar solution to address tax challenges arising from digitalisation and globalisation. Pillar One proposes a re-allocation of a proportion of tax to the market jurisdiction, while Pillar Two seeks to apply a global minimum effective tax rate.

Ireland is supportive of the Pillar One proposals to re-allocate a proportion of taxing rights to market countries, recognising that the international tax framework must evolve to accommodate changes in how business operates in today’s digitalised economy. There will be a cost to Ireland for this in terms of reduced corporation tax receipts but, overall, Pillar One will bring stability and certainty to the international tax framework and will help underpin economic growth from which all can benefit.

I have been very clear that Ireland is broadly supportive of the agreement but I signalled a reservation in the respect to a commitment to a rate of ‘at least 15%’ for a global minimum effective tax rate. As a result of this reservation, Ireland was not in a position to join the OECD Statement.

I have consistently said that Ireland wants to be part of the agreement at OECD. However, any agreement must bring certainty and stability.

Given the economic significance of the OECD proposals to Ireland, it is important that there is a dialogue within our political system, with stakeholders and with citizens in respect to these proposals. In that regard, I launched a Public Consultation on the proposed OECD agreement on 20 July.

Interested parties are invited to respond to this consultation on Ireland’s approach to the international tax proposals being discussed at the OECD/G20 BEPS Inclusive Framework and, specifically, in relation to how our approach and those proposals can continue to support economic growth and prosperity.

The consultation period runs until 10 September 2021, and details of how to engage are available on the Department of Finance website.

Given that the consultation does not conclude until 10 September, it is premature to provide an analysis of the submissions received.

Tax Code

Questions (405)

Aengus Ó Snodaigh

Question:

405. Deputy Aengus Ó Snodaigh asked the Minister for Finance the reason performers of live music at functions, dances and in venues including pubs are subject to the standard VAT rate of 23% for their hiring service or admission charges while performers of live music in theatres and other venues with or without food or drink are subject to a much lower VAT rate of 9% or no VAT; and if he will consider lowering the rate for those workers and businesses who provide the service of live music currently charged 23% to assist in the recovery of the music and entertainment sector following the devastating effects of the Covid-19 pandemic and restrictions. [40720/21]

Written answers

Minister for Finance

The VAT rating of goods and services is subject to EU VAT legislation with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate from VAT. Ireland, in line with the VAT Directive, also maintains several standstill provisions and derogations that allows it to maintain reduced rates to certain supplies for historical reasons. It is on this basis that Ireland had provided for an exemption or a reduced rate of VAT of 9% to apply to the promotion of and admissions to live theatrical or musical performances (excluding dances) depending on whether food or drink is available for consumption.

It is not possible under the VAT Directive to allow a reduced rate of VAT to be applied to the fee charged by a performer; this can only be applied to the promotion and admission charges. This means that where a band or entertainer is hired for a function such as a wedding, the hiring service is subject to the standard rate of VAT, currently 23%.

Economic Growth

Questions (406)

Thomas Pringle

Question:

406. Deputy Thomas Pringle asked the Minister for Finance if his Department is engaging with EU financial institutions regarding the potential use of GNI* in view of the loss of recovery and resilience funding due to the use of gross domestic product as a measure of economic growth; if his Department is examining other potential measures of economic growth which better reflect social and economic well-being across society; and if he will make a statement on the matter. [40759/21]

Written answers

Minister for Finance

The standard international measure of economic activity is Gross Domestic Product (hereafter ‘GDP’), which measures the total value of goods and services produced in an economy during a particular period.

When the European Council reached agreement on the Multi-annual Financial Framework 2021-2027 and Next Generation EU Recovery Instrument, last July, the Government supported the use of the allocation key for the Recovery and Resilience Facility, including GDP-related elements, as the best possible outcome within the broader political agreement. GDP is frequently used as a reference point for EU budget expenditure policy.

The Department of Finance frequently highlights the shortcomings of GDP as a measure of living standards and of the debt-to-GDP ratio as a measure of the debt burden. Now that the modified GNI measure is available, the Department also supplements the Government’s European budgetary requirements (when submitting the Stability Programme Update and Draft Budgetary Plan) with estimates and projections of modified GNI and debt-to-modified GNI. However, it should be kept in mind that this metric is designed specifically for the Irish economy and is not based on internationally-agreed methodologies.

Furthermore, officials in my department regularly analyse potential measures of economic growth that better reflect social and economic well-being across Irish society. These include standard measures such as GDP, but also alternative statistics developed to more accurately reflect the domestic economic situation, such as GNI* and modified domestic demand. More specific indicators which nonetheless relate to the economy as a whole are also closely monitored, for example employment, private consumption, and investment.

My Department is also a joint sponsor of the cross-government initiative called The First Report on a Well-being Framework for Ireland. This Report, published on 6 July this year, aims to advance the holistic measurement of well-being in Ireland. Over time, this framework is intended to provide a more well-rounded view of our society’s well-being, reflecting both social and economic well-being. The Report details the first phase of this ongoing work can be found on the gov.ie website.

Question No. 407 answered with Question No. 385.

Tax Code

Questions (408)

Duncan Smith

Question:

408. Deputy Duncan Smith asked the Minister for Finance if Ireland plans to join with 130 other jurisdictions with the OECD plans to implement a 15% global corporation tax rate; and if he will make a statement on the matter. [40807/21]

Written answers

Minister for Finance

The Deputy will be aware that on 1 July 2021, the OECD Inclusive Framework reached agreement, but not consensus, on key aspects of the two-pillar solution to address tax challenges arising from digitalisation and globalisation. Pillar One proposes a re-allocation of a proportion of tax to the market jurisdiction, while Pillar Two seeks to apply a global minimum effective tax rate.

Ireland is supportive of the Pillar One proposals to re-allocate a proportion of taxing rights to market countries, recognising that the international tax framework must evolve to accommodate changes in how business operates in today’s digitalised economy. There will be a cost to Ireland for this in terms of reduced corporation tax receipts but, overall, Pillar One will bring stability and certainty to the international tax framework and will help underpin economic growth from which all can benefit.

I have has been clear that Ireland is broadly supportive of the agreement but I signalled a reservation in the respect to a commitment to a rate of ‘at least 15%’ for a global minimum effective tax rate. As a result of this reservation, Ireland was not in a position to join the OECD Statement.

I have consistently said that Ireland wants to be part of the agreement at OECD. However, any agreement must bring certainty and stability.

Given the economic significance of the OECD proposals to Ireland, it is important that there is a dialogue within our political system, with stakeholders and with citizens in respect to these proposals. In that regard, I launched a Public Consultation on the proposed OECD agreement on 20 July.

Interested parties are invited to respond to this consultation on Ireland’s approach to the international tax proposals being discussed at the OECD/G20 BEPS Inclusive Framework and, specifically, in relation to how our approach and those proposals can continue to support economic growth and prosperity.

The consultation period runs until 10 September 2021 and details of how to engage are available on the Department of Finance website.

I remain committed to the OECD process and aim to find an outcome that Ireland can yet support. Ireland will continue to play our part in reaching a comprehensive, sustainable and equitable agreement.

Covid-19 Pandemic Supports

Questions (409)

Jim O'Callaghan

Question:

409. Deputy Jim O'Callaghan asked the Minister for Finance the number of businesses that have availed of the Covid restrictions support scheme to date by county; the value of the financial support by county in tabular form; and if he will make a statement on the matter. [40885/21]

Written answers

Minister for Finance

Revenue publishes weekly statistical updates on the main COVID-19 support schemes, including the Covid Restriction Support Scheme (CRSS). These statistics are available at link: www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-support-schemes-statistics.aspx.

The latest update to the statistics, dated 22 July 2021, shows in ‘CRSS Table 3’, the numbers of supported business premises and the amounts of support paid out per county to date.

Covid-19 Pandemic Supports

Questions (410, 413)

Ruairí Ó Murchú

Question:

410. Deputy Ruairí Ó Murchú asked the Minister for Finance if any continuity of the Covid-19 supports have been considered for specific businesses into the future; and if he will make a statement on the matter. [40977/21]

Ruairí Ó Murchú

Question:

413. Deputy Ruairí Ó Murchú asked the Minister for Finance if he is reconsidering any circumstances which would allow for travel agents to be able to avail of the Covid-19 restrictions support scheme payment into the future given that they will not receive income from the vast majority bookings until end of quarter 1 in 2022; and if he will make a statement on the matter. [40980/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 410 and 413 together.

The Covid Restrictions Support Scheme (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.

The CRSS applies to businesses carrying on trading activities from a business premises located in a region subject to restrictions, which requires the business to prohibit or considerably restrict customers from accessing their business premises and as a result, is operating at less than 25% of turnover in 2019.

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 significantly restrict access to its business premises. This means that in the case of a travel agent that operates from a business premises, they may qualify for support under the scheme provided they meet all the eligibility criteria, including the requirement that customers are either prohibited, or significantly restricted, from accessing their business premises under the public health regulations.

As non-essential retail, including travel agent businesses, were permitted to open from 17 May 2021, they are no longer subject to Covid restrictions which would require them to prohibit or significantly restrict customers from accessing their business premises. Therefore, from that date, they ceased to qualify for support under the CRSS. However, subject to meeting the relevant criteria, a business such as a travel agent business, reopening after a period of restrictions, may claim a “restart week payment” under the CRSS scheme to assist it with the costs of reopening.

For businesses reopening between 29 April 2021 and 1 June 2021, an “enhanced restart week payment” may be claimed, which is computed at double the normal weekly CRSS rate, for two weeks, subject to a maximum weekly amount payable of €5,000.

On 1 June, I announced that an additional business support scheme, the Business Resumption Support Scheme (BRSS), would be available for businesses whose turnover in the period from 1 September 2020 to 31 August 2021 is reduced by 75% compared with their 2019 turnover. To qualify under the scheme, a business must carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D. The BRSS will come into operation from early September. Under the scheme, a qualifying business will be able to claim a cash payment calculated as three times the sum of 10% of their average weekly turnover up to €20,000 and 5% on any excess of average weekly turnover above €20,000, subject to a maximum payment under the scheme of €15,000.

Companies and self-employed individuals may be entitled to support under other measures put in place by Government, including the COVID Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS). Businesses may also be eligible to warehouse VAT and PAYE (Employer) debts and also excess payments received by employers under the Temporary Wage Subsidy Scheme, and the balance of Income Tax for 2019 and Preliminary Tax for 2020 for self-assessed taxpayers if applicable.

The Deputy will be aware that the CRSS will be continued to the end of 2021 for those businesses that are still directly affected by public health restrictions that may remain in place and that the Employment Wage Subsidy Scheme has also been extended to the end of 2021.

The Government will continue to assess the effects of the Covid-19 pandemic on the economy and I will continue to work with my Ministerial colleagues to ensure that appropriate supports are in place to mitigate these effects.

Tax Code

Questions (411)

Ruairí Ó Murchú

Question:

411. Deputy Ruairí Ó Murchú asked the Minister for Finance his engagements regarding the EU digital tax; and if he will make a statement on the matter. [40978/21]

Written answers

Minister for Finance

I assume that the Deputy is referring to the Digital Levy.

In 2020, the European Council invited the European Commission to bring forward a proposal for a digital levy in 2021 in the context of Own Resources to assist in the funding of the EU budget. It is my understanding that it was the intention of the European Commission to bring forward such a proposal this month. However on 12 July, the Commission announced that it was putting the work on the digital levy on hold in the context of the ongoing discussions at the OECD on addressing the tax challenges of digitalisation and globalisation.

Ireland will consider the merits of any such proposal when a proposal is made. However, it is important for the EU that any proposal avoids raising trade tensions and does not undermine the ongoing OECD discussions.