Eoin Ó Broin
Question:332. Deputy Eoin Ó Broin asked the Minister for Finance the reason that gifts worth under the value of €20,000 must have a TARIC code. [1439/22]
View answerCustoms and Excise
Questions (332, 333)
Eoin Ó Broin
Question:333. Deputy Eoin Ó Broin asked the Minister for Finance the reason that gifts destined for Ireland would be rejected as having no TARIC codes despite being clearly marked with their value and contents. [1440/22]
View answerWritten answers
I propose to take Questions Nos. 332 and 333 together.
The Deputy will be aware that Revenue, as Ireland’s Tax and Customs administration, is responsible for managing the importation and exportation of goods in accordance with the EU Union Customs Code (UCC) and relevant national legislation and this includes gifts being imported by courier businesses or postal operators for recipients in Ireland. I am advised by Revenue that from 1 July 2021, under EU legislation, electronic Customs import declarations are required for all gifts coming from non-EU countries regardless of the value of the goods being sent. This is an EU requirement across all Member States and is necessary to protect public health, to ensure food safety and product standards and to protect EU businesses from unfair international competition thus preserving jobs for European workers, including Irish workers. The information required for the importation of non-Union goods is specified in the UCC and includes the commodity (TARIC) code of the items within the gift. I am advised by Revenue that the data contained within the import declaration, serves not only to allow for the calculation of the taxes and duties which may be owed, but also facilitates the risk analysis of the goods in order to ensure the provenance of goods imported into the EU and to protect EU citizens from goods which may pose a danger to the health and well-being of citizens and enables Revenue to target and disrupt illegal trade, and confront non-compliance.
While data may be supplied on the physical parcel / package, this does not remove the obligation for an electronic import declaration which is required to facilitate the completion of an electronic risk assessment and calculation of tax and duty owed. Consignments from outside the EU cannot be delivered without a valid electronic Customs import declaration. While tax and duty are not usually payable on gifts valued at less than €45, an electronic import declaration including the TARIC code is still required for every gift.
I am also advised by Revenue that in the context of parcels and packages, while Customs declarations are often submitted by the courier business or postal operator on behalf of the recipient (importer) in Ireland, the information required to complete the declaration is generally supplied by the exporting party although the importer (the recipient in Ireland) may also provide information to the courier business or postal operator that is needed to complete the declaration. Where the courier business or postal operator does not have the necessary information, it may contact the exporting party or the importer to gather the necessary information to enable them to complete the declaration. Alternatively, where sufficient information to complete the Customs declaration in not available, the courier business or postal operator may choose to return the goods to the sender. It is a matter for the relevant courier business or postal operator to determine, based on its business model, how to deal with instances where they do not have the data needed to complete the necessary Customs declaration.
Question No. 333 answered with Question No. 332.
Departmental Reviews
Questions (334)
Mary Lou McDonald
Question:334. Deputy Mary Lou McDonald asked the Minister for Finance the current number of live studies, reviews and research undertaken or commissioned by him in tabular form; and the date by which each study, review and research is scheduled to be completed. [1552/22]
View answerWritten answers
There is continued monitoring of tax related issues by my Department. Over the course of each year, a number of reviews of tax expenditures and other tax related matters are carried out by, or on behalf of, the Department of Finance. These may be used to ascertain whether existing tax measures should be amended, continued, extended or ended, or to otherwise review or assess certain taxes (existing and proposed) or groups of taxes. A range of options for possible new or amended tax policy measures are examined as part of the Tax Strategy Group (TSG) process each year. The reviews are normally published on the Department’s website, and may be included in the TSG papers, or with the annual Budget documentation.
I can advise the Deputy that my Department is currently carrying out the following live studies, reviews and research projects:
|
Live studies, reviews and research |
Scheduled for completion |
|
SME Financial Distress and the Macroeconomic Recovery |
Q1 2022 |
|
Economic Research into Outbound Payments of Dividends and Interest |
Q1 2022 |
|
Risk Assessment - Trust and Company Service Providers |
Q1 2022 |
|
SME survival, recovery and investment following COVID-19 |
Q1 2022 |
|
SME Credit Demand Survey April – September 2021 |
Q1 2022 |
|
Mid-term refresh of the Ireland for Finance strategy 2019, the Government strategy for the development of the international financial services sector in Ireland to 2025. |
H1 2022 |
|
Review of the policy framework for credit unions (PfG commitment) |
H1 2022 |
|
Research to identify and develop tools to better enable consumers to switch their banks. |
Q4 2022 |
|
The Retail Banking Review |
Q4 2022 |
|
The role of firm dynamism in productivity - joint research with ESRI |
Q4 2022 |
|
COVID-19 and productivity enhancing reallocation- joint research with OECD |
Q4 2022 |
|
Flows into self-employment - joint research with ESRI |
Q4 2022 |
|
Inflation-Chasing Interest Rate Normalisation and the Impact on Macro-Financial Linkages - joint research with ESRI |
Q4 2022 |
|
Impact of wage subsidies on the labour market during COVID-19 - joint between Revenue & ESRI |
Q4 2022 |
|
Financial Services and Pensions Ombudsman – Periodic Critical Review |
Q4 2022 |
|
Research relating to the design of a Vacant Property Tax |
In advance of Budget 2023 |
Social Media
Questions (335)
Seán Sherlock
Question:335. Deputy Sean Sherlock asked the Minister for Finance the amount spent on social media by his Department and agencies under his remit in 2021; and the platforms the monies were spent on in tabular form. [1699/22]
View answerWritten answers
Expenditure on social media by my Department in 2021 is set out in the following table:
|
Social Media Platform |
Amount (exclusive of VAT) |
|
|
€3,813 |
|
|
€629 |
Details of the bodies under the aegis of my Department which incurred expenditure on social media in 2021 are in the table below.
|
Body under the aegis of Department of Finance |
Social Media Platform |
Amount (exclusive of VAT) |
|
Central Bank of Ireland |
|
€15,954 |
|
|
YouTube |
€3,865 |
|
Credit Review Office |
|
€1,312 |
|
National Treasury Management Agency |
|
€37,689* |
|
|
|
€90** |
The National Treasury Management Agency provides business and support services and systems to the National Asset Management Agency (NAMA), the Strategic Banking Corporation of Ireland (SBCI) and Home Building Finance Ireland (HBFI).
*I would draw the Deputy’s attention to the fact that €249 of this amount was paid by the NTMA and recharged to HBFI and €200 of this amount was paid by the NTMA and recharged to the SBCI.
**I would draw the Deputy’s attention to the fact that this full amount was paid by the NTMA and recharged to the SBCI.
Departmental Contracts
Questions (336)
Seán Sherlock
Question:336. Deputy Sean Sherlock asked the Minister for Finance the amount spent on consultancy services by his Department in 2021; the reason for each consultancy; and the name of the consultancy in tabular form. [1717/22]
View answerWritten answers
I can advise the Deputy that the amount my Department spent in respect of consultancy services in 2021 is provided in tabular form below.
|
Supplier |
Ammount |
Description |
|
Behaviour & Attitudes |
€68,880.00 |
SME Credit Demand Survey |
|
Conan McKenna |
€6,650.00 |
Review of Domestic Implementation of Restrictive Measures (Sanctions) |
|
Dept. of Foreign Affairs |
€64,633.53 |
Ireland's approved contributions to the OECD (Part II programme- FATF) for 2021. FATF is the Financial Action Task Force on Money Laundering. |
|
KPMG |
€36,900.00 |
Fee in connection with lot 2 - General financial advice - Home Building Finance Ireland - Market Economy Investor Principle |
|
State Claims Agency |
€726.00 |
Counsel Fees |
|
William Fry |
€142,425.97 |
Legal Advice |
Insurance Industry
Questions (337)
Mick Barry
Question:337. Deputy Mick Barry asked the Minister for Finance if he will seek funds from insurance companies who have deducted State supports from insurance claims made by small businesses; and if he will make a statement on the matter. [1734/22]
View answerWritten answers
I am aware of the issue around certain insurers seeking to deduct the value of particular Government supports from claims payouts linked to the COVID-19 pandemic. At the outset, it is important to note that such deductions may arise in accordance with the principle of indemnity, under which an insured party who has suffered a loss is restored, in so far as possible, to the same financial position that they were in immediately prior to this event. In addition, this practice must be considered on a case-by-case basis, as individual policy wordings could provide a contractual basis for making such deductions.
My officials have considered various options to address this issue. As recently noted by Minister of State Fleming at the Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach, any retrospective recoupment of amounts deducted by insurers would be difficult to implement from a legal perspective. Separately, it is my understanding that the issue of Government grants is expected to be addressed as part of a ruling on quantum in the ongoing business interruption test case, which remains before the Courts, and on which it would be inappropriate to comment further at this time.
In light of these considerations, it was decided that the appropriate way to address this issue is to increase the transparency around the deduction of State supports from claims settlements. The Insurance (Miscellaneous Provisions) Bill, which is currently being drafted, will make amendments to existing legislation to enable the Central Bank to collect data on such deductions by insurers through the National Claims Information Database (NCID). This will greatly enhance policymakers’ understanding of the prevalence of this practice, and will provide an important evidence-base for taking any further action in this area, if necessary, in order to protect taxpayers’ interests. In addition, the Bill will create a new requirement on insurers to notify consumers about any such deductions made to claims settlements.
I believe that this is a proportionate and appropriate response to this issue, which will avoid unintended consequences and will not pre-empt any legal ruling on the matter. I expect the draft Bill to be published early within this quarter, and I look forward to working with colleagues to progress it through the Oireachtas to complement the Government’s ongoing work on insurance reform.
Departmental Data
Questions (338)
Denis Naughten
Question:338. Deputy Denis Naughten asked the Minister for Finance the number of appeals received by the Disabled Drivers Medical Board of Appeal in 2019; the number granted and refused on appeal in 2019; the corresponding figures for 2017, 2018, 2020 and 2021; the number of suitably qualified applications received for appointment to the new board of appeal; when he expects it to be operational; and if he will make a statement on the matter. [1755/22]
View answerWritten answers
The Disabled Drivers & Disabled Passengers Scheme (DDS) provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.
The Scheme is open to severely and permanently disabled persons who also meet one of six specified medical criteria, as a driver or as a passenger and also to certain organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant. In the event that a PMC is not granted by the relevant Senior Area Medical Officer an appeal may be made to the independent Disabled Drivers Medical Board of Appeal (DDMBA) who operate out of the National Rehabilitation Hospital in Dun Laoghaire.
In light of the resignations of the board members from the Disabled Drivers Medical Board of Appeal, Department of Finance officials are working with the Department of Health and the Public Appointments Service in terms of seeking expressions of interest from medical practitioners to participate in the Board. It is hoped to move this process along as quickly as possible to then appoint five members, so that appeals can recommence early in the New Year.
Requests for appeal hearings can be sent to the DDMBA secretary based in the National Rehabilitation Hospital. New appeal hearing dates will be issued once the new Board is in place. Assessments for the primary medical certificate, by the HSE, are continuing to take place.
Appeal Data 2017 - 2021
|
|
2017 |
2018 |
2019 |
2020 |
2021 |
|
New appeals |
680 |
674 |
684 |
204 |
382 |
|
Number of Appeals Assessed |
401 |
386 |
424 |
116 |
148 |
|
Number of Successful Appeals |
12 |
20 |
9 |
4 |
12 |
|
Number of Unsuccessful Appeals |
389 |
366 |
415 |
112 |
136 |
*260 appeals outstanding at 01/2017
**Appeal hearings were lower than usual for 2020 due to both public health considerations and the Supreme Court Case in June 2020. Appeal hearings resumed in early 2021 following an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation which, following the approval of the Finance Act 2020, allowed assessments to recommence.
***2021 appeal hearings have also been impacted by the Covid-19 pandemic.
Tax Yield
Questions (339)
Brian Stanley
Question:339. Deputy Brian Stanley asked the Minister for Finance the amount of carbon tax collected in 2020 and 2021, respectively. [1763/22]
View answerWritten answers
I am advised by Revenue that the amounts collected in respect of Carbon Tax in 2020 and 2021 are €493.6 million and €651.7 million respectively. The 2021 collection is provisional at this time and may be revised.
Carbon Tax receipts for 2020 and prior years, including breakdowns by commodity, are published on the Revenue website :
www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/excise-receipts-commodity.aspx
Currency Circulation
Questions (340)
Carol Nolan
Question:340. Deputy Carol Nolan asked the Minister for Finance the legal basis for cash as legal tender in Ireland; if retail businesses or service providers can refuse to accept payment in cash; and if he will make a statement on the matter. [1767/22]
View answerWritten answers
In accordance with Article 128 of the Treaty on the Functioning of the European Union and with Council Regulation no 974/98 of 3 May 1998 on the introduction of the euro, euro notes and coins have the status of legal tender in euro area Member States, including Ireland.
Retail transactions are governed by contract law in Ireland and in the context of this, where a business places no restrictions on the means of payment it is prepared to accept, it must accept legal tender when offered by a customer to settle a debt that has arisen.
However, if a business specifies in advance of a transaction that payment must be in a form other than cash, the customer cannot subsequently claim a legal right to pay in cash, even if that cash is legal tender. Therefore, under certain circumstances, retail businesses or service providers can refuse to accept payment in cash.
Departmental Data
Questions (341)
Catherine Murphy
Question:341. Deputy Catherine Murphy asked the Minister for Finance if he will provide a schedule of all client and or customer facing and or orientated services that his Department provide via a contracted service provider; the contractor that provides the service; and the cost of same for the past five years to date in 2022. [1799/22]
View answerWritten answers
I refer to your question in relation to contracts for the provision of client, customer facing and orientated services. My Department has one such contract with the National Council for the Blind of Ireland (NCBI). The contract is for the provision of telephony services to both the Department of Finance and the Department of Public Expenditure and Reform. The total vat exclusive amount paid to the NCBI for the past five years to date, for the provision of telephony services to both Departments, is €439,619.
Financial Services
Questions (342)
Catherine Murphy
Question:342. Deputy Catherine Murphy asked the Minister for Finance if his attention has been drawn to situations in which lenders refuse to and or will not release funds to persons that work in companies that are receiving State supports due to the ongoing public health situation; if he will engage with lenders in respect of this situation in order to resolve the issue; if he has engaged with the Revenue Commissioners on the issue; and if he has consulted with the Revenue Commissioners in order to improve the way in which the employment wage subsidy scheme is administered in the context of lenders refusing to release funds to applicants (details supplied). [1837/22]
View answerWritten answers
Since the COVID-19 situation first arose, I have maintained contact with the BPFI and banks 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 (EWSS) on a case by case basis and that they are taking a fair and balanced approach.
As the Deputy is aware, the EWSS is an economy-wide enterprise support that has played a central role in supporting businesses, encouraging employment and helping to maintain the link between employers and employees. In money terms, the overall support provided to-date (as at 13 January) by EWSS is over €7 billion, comprising of direct subsidy payments of €6.12 billion and PRSI forgone of €956 million to 51,900 employers, in respect of over 706,700 employees.
There are, however, certain consumer protection requirements which govern the provision of mortgage credit to consumers. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a Central Bank regulated mortgage 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 provides 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 regulated 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 and the fact that EWSS legislation enacted by the Oireachtas placed the administration of the scheme under the care and management of Revenue does not change or impact on that position.
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.
It should also be noted that 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. Therefore, 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.
Matters in relation to policy and the administration of mortgages provided by local authorities are a matter for my colleague the Minister for Housing, Local Government and Heritage.
Tax Code
Questions (343)
Denis Naughten
Question:343. Deputy Denis Naughten asked the Minister for Finance his views on the issues raised by an association (details supplied) in relation to the new interpretation of VAT in relation to dental services; and if he will make a statement on the matter. [1841/22]
View answerWritten answers
The VAT treatment of the supply of goods and services is subject to the requirements of the EU VAT Directive, with which Irish VAT law must comply. Exemptions from VAT for certain activities in the public interest are set out in Chapter 2 of Title IX of the Directive. These provisions are transposed into Irish legislation in Part 1, Schedule 1, VAT Consolidation Act 2010. Paragraph 2(5) of Schedule 1 provides for an exemption in respect of the supply of professional dental services.
The exemption from VAT in respect of dental services is not dependent on the legal form of the taxable person supplying the service. It is the nature of the service that informs the VAT treatment. The legislation which transposes Article 132 of the Directive, and Revenue’s interpretation of the legislation, ensures that the exemption from VAT to the supply of dental services is applied consistently and in a manner which is not dependent on the legal form of the person supplying the service. In accordance with the Directive and CJEU jurisprudence the VAT exemption applies to dental services provided by a clinic, a principal dentist, or by an associate dentist, where those services are provided to a patient.
Where a principal dentist receives consideration in respect of fee sharing arrangements and the nature of services consists of the supply of facilities for the carrying on of a dental practice, Revenue views this as a taxable supply of services within the scope of VAT. The final consumer in this fee sharing arrangement is not a patient availing of a supply of dental services to which the exemption applies.
Revenue has been clear at all times regarding the VAT treatment of dental fee sharing arrangements and has outlined its position in correspondence and meetings with the Irish Dental Association.
Question No. 344 answered with Question No. 311.
Question No. 345 answered with Question No. 311.
Tax Yield
Questions (346)
Darren O'Rourke
Question:346. Deputy Darren O'Rourke asked the Minister for Finance the total tax take on a pint of beer retailing at €6 and a bottle of wine retailing at €12.50. [1900/22]
View answerWritten answers
Alcoholic beverages such as beer and wine are subject to an excise duty in the form of Alcohol Products Tax (APT) and are also subject to Value-Added Tax (VAT).
Council Directive 92/83/EEC lays down a harmonised approach for the application of excise duties to alcohol and alcoholic beverages in the EU. It includes provisions defining categories of alcohol and alcoholic beverages and sets out the basis on which excise duties on such products are to be established. Chapter 1 of Part 2 of the Finance Act 2003 transposes Council Directive 92/83/EEC and the rates of APT for the various categories of alcoholic beverages are provided for in Schedule 2 of that Act. The rate of APT applying to a particular alcoholic beverage depends on the category it falls within and its alcohol content which is expressed as a percentage of volume.
The VAT rating of goods is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. In accordance with the Value-Added Tax Consolidation Act 2010, VAT is chargeable on beer and wine at the standard rate, currently 23% in Ireland.
The rate of APT on beer with an alcohol content exceeding 2.8% volume is currently €22.55 per hectolitre per cent of alcohol in the beer. For a pint of beer with, for example, 4.2% alcohol content, APT would be €0.54. VAT at 23% on a pint of beer retailing at €6 would be €1.12. Therefore, the total tax take on a €6 pint of beer with an alcohol content of 4.2% volume is €1.66. The APT due on a pint of beer with an alcohol content lower than 4.2% volume would be less than €0.54 and beer stronger than 4.2% volume would be liable to a higher rate of APT.
The rate of APT on still wine with an alcohol content exceeding 5.5% volume but not exceeding 15% volume is currently €424.84 per hectolitre, which equates to €3.19 on a 75 cl bottle. On a bottle of wine retailing at €12.50 the VAT take would be €2.34. Therefore, the total tax take on a €12.50 bottle of still wine with an alcohol content exceeding 5.5% volume but not exceeding 15% volume is €5.53 Different APT rates apply to still wines with different levels of alcohol content and to sparkling wines, and full details of all rates of APT are available on Revenue’s website.
Departmental Schemes
Questions (347)
Michael Healy-Rae
Question:347. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding the disabled drivers and disabled passengers' scheme. [1947/22]
View answerWritten answers
The Disabled Drivers & Disabled Passengers Scheme provides relief from Vehicle Registration Tax and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.
The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant.
To qualify for a Primary Medical Certificate an applicant must be permanently and severely disabled, and satisfy at least one of the following medical criteria, in order to obtain a Primary Medical Certificate:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The current medical criteria medical criteria were included in the Finance Act 2020, by way of amendment to Section 92 of the Finance Act 1989. This amendment arises from legal advice in light of the June 2020 Supreme Court judgement that the medical criteria in secondary legislation was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989 (primary legislation).
In light of the resignations of the board members from the Disabled Drivers Medical Board of Appeal, Department of Finance officials are working with the Department of Health and the Public Appointments Service in terms of seeking expressions of interest from medical practitioners to participate in the Board. It is hoped to move this process along as quickly as possible to then appoint five members, so that appeals can recommence early in the New Year.
Requests for appeal hearings can be sent to the DDMBA secretary based in the National Rehabilitation Hospital. New appeal hearing dates will be issued once the new Board is in place. Assessments for the primary medical certificate, by the HSE, are continuing to take place.
As the Deputy will appreciate this Scheme confers substantial benefits to eligible persons and changing the medical criteria to more general mobility-focused criteria, would raise the already considerable cost of the Scheme in terms of tax foregone to the Exchequer. Any increase in the cost of the Scheme would require a concomitant increase in tax, reduction in public expenditure, or increase in the Exchequer deficit.
While I am very aware of the importance of this scheme to those who benefit from it, I am also aware of the disquiet expressed by members of this house and others in respect of the difficulties around access to the scheme.
Accordingly, I gave a commitment to the House that a comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities, would be undertaken.
In this context I have been working with my Government colleague, Roderic O’Gorman, Minister for Children, Equality, Disability, Integration and Youth. We are both agreed that the review should be brought within a wider review under the auspices of the National Disability Inclusion Strategy, to examine transport supports encompassing all Government funded transport and mobility schemes for people with disabilities. Its work was interrupted by the COVID-19 pandemic.
This the most appropriate forum to meet mutual objectives in respect of transport solutions/mobility supports for those with a disability.
Minister O’Gorman has confirmed that he has asked his officials to reconvene the working group established to carry out that review at the earliest opportunity. With this in mind, officials from both my Department and the Department of Children, Equality, Disability, Integration and Youth have met recently to discuss proposals for progressing the Disabled Drivers Scheme review within the wider review. My officials will continue to work closely with officials from the Department of Children, Equality, Disability, Integration and Youth, to progress this review, and on foot of that will bring forward proposals for consideration.
Departmental Reviews
Questions (348)
Eoin Ó Broin
Question:348. Deputy Eoin Ó Broin asked the Minister for Finance the status of his review of the recommendations of the working group on the tax and fiscal treatment of landlords; if a summary of those recommendations will be provided in tabular form; and the current views of his Department on each of those recommendations. [1991/22]
View answerWritten answers
My Department has yet to commence the review mentioned by the Deputy. However, I can confirm that the project forms part of the Department's 2022 work programme.
The Report of the Working Group on the Tax and Fiscal Treatment of Accommodation Providers was published on Budget Day, 10 October 2017. The report put forward options for further consideration, rather than recommendations, and any further consideration would require the participation of several Departments and organisations, including my own Department. The ten options are split into short, medium and long-term options. Five potential short-term options were identified as measures which could potentially be implemented within 18 months, i.e. within Budgets 2018 and 2019.
One short-term option was to increase the mortgage interest deduction available to landlords. In this context, it should be noted that in Budget 2017, a phased unwinding of the restriction on interest deductibility over five years for all residential landlords was initiated. The second step, an increase from 80% to 85% deductibility, took effect from 1 January 2018. Budget 2019 accelerated progress in this area and, from 1 January 2019, the restoration of full mortgage interest deductibility for landlords of residential property has been in place.
A further option was to consider introducing Local Property Tax (LPT) deductibility for landlords. The Report noted that LPT is a relatively small expense and therefore is unlikely to make a significant difference to the position of any individual landlord in cash terms and so may not be regarded by landlords as a sufficient measure to encourage them to stay in or enter the rental market. The Report also found that the measure would also have a deadweight cost in respect of landlords who do not intend to leave the rental market and would create a more favourable position for landlords of property compared to owner-occupiers, as owner-occupiers cannot claim a tax deduction for LPT.
In Budget 2018 I introduced another of the short-term options: deductibility for pre-letting expenditure for previously vacant properties. This measure applies to residential premises which have been vacant for at least 12 months and which are then let after the date of the passing of the Finance Act 2017, i.e. after 25 December 2017. The expenditure is allowed as a deduction against rental income from that premises. It applies to expenses that would be allowable if they had been incurred while the property was let, such as the cost of repairs, insurance, maintenance and management of the property. Certain limitations are in place regarding this measure, for example the expenditure must have been incurred in the 12 months before the premises is let as a residential premises. The total deduction allowed is capped at €5,000 per vacant premises and the deduction will be clawed-back if the property ceases to be let as a residential premises within four years of the first letting. I prioritised this option as it was specifically designed to encourage an overall increase in housing supply by bringing currently vacant property back into residential use. As the Deputy may be aware, I extended this measure in Budget 2022.
The final short-term option was to improve the collection and sharing of data on the rental accommodation sector. A significant issue that hampered the progress of the Working Group was a lack of robust data on various elements of the housing market, due to the differing metrics used by the various agencies. With a view to address this issue, a Data Group was convened after the publication of the Housing for All Strategy to ensure the plan is underpinned by a robust data strategy. The group reports to the Housing for All Delivery Group, chaired by the Department of the Taoiseach and my Department participates in the bi-weekly meetings of this group.
Five of the options put forward in the report were medium-term and long-term options. Medium-term options are measures which work with the current tax system but might take longer to develop and implement, and as such would require a longer lead-in period. The long-term options look at the potential for more fundamental changes to the tax system, and so would require significantly greater resource commitments to progress.
As the Deputy will be aware, taxation is only one of the policy levers available to the Government through which to boost rental and overall housing supply and that, in line with the Tax Expenditure Guidelines, consideration of whether a tax measure is the most appropriate policy tool for a given purpose would be required. Ireland’s past experience with tax incentives in the housing sector strongly suggests the need for a cautionary stance when considering intervention in the rental sector. There are many competing priorities which must be considered when deciding which policy measures to introduce and the rental sector is just one of many other sectors that may require assistance and intervention.
Finally, the following tables summarise the options set out in the report.
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Short-term options |
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Accelerated restoration of full mortgage interest deductibility for landlords of residential property |
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Introducing Local Property Tax deductibility for landlords |
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Enhancing loss relief for landlords (or a sub-set of landlords), to allow relief for rental losses against other income sources in the same year |
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Introducing deductibility for pre-letting expenditure for previously vacant properties |
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Improvements in the collection and sharing of data on the rental accommodation sector |
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Medium-term options |
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Allowing a deduction against rental income for an element of the capital cost of the rental property in the initial years of ownership, with a corresponding reduction in the base cost of the property for Capital Gains Tax purposes on a future disposal |
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Capital Gains Tax relief for properties acquired and retained as rental accommodation |
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Incentive to attract investment capital into the construction of property, in areas of need, to be let at social / affordable rents. |
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Long-term options |
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Review of provisions for the holding of rental property via pension vehicles |
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Consideration of developing a separate method of taxing rental income, for example, a flat tax or a separate rate of tax, as a policy lever to support the sector as a whole or specific sub-sectors (for example, affordable housing/urban housing) |
p. 6 'The Report of the Working Group on the Tax and Fiscal Treatment of Accommodation Providers', available at www.gov.ie/en/collection/51d1c-budget-2018/
Tax Collection
Questions (349)
Seán Canney
Question:349. Deputy Seán Canney asked the Minister for Finance the amount his Department estimates it received in overpaid taxes in 2020 and 2021; his plans to make taxpayers aware of their overpayments; and if he will make a statement on the matter. [2041/22]
View answerWritten answers
Following engagement with the Deputy’s Office, I am advised that the Deputy’s Question specifically relates to PAYE taxpayers.
On that basis, it should be noted that PAYE taxpayers can claim a range of additional tax credits and reliefs in respect of various expenses incurred during a tax year. The most common of which are health expenses, nursing home fees, tuition fees, remote working relief and stay and spend credit. To claim the additional credits and reliefs to which they may be entitled, PAYE taxpayers should complete an income tax return at the end of the tax year.
Where an income tax return is not completed, it is not possible for Revenue to know if a taxpayer may be due additional credits or reliefs and as such it is not possible to provide the Deputy with an estimate of potential overpaid income tax. However, Revenue has confirmed that it has to date refunded €390 million to PAYE taxpayers in respect of 2020 and €57 million in respect of 2021.
In addition, Revenue has also confirmed that it issues reminder letters every year to taxpayers who did not claim any additional credits in the previous four years advising them that they may be entitled to further tax relief depending on their individual circumstances. The reminder letters also advise taxpayers of the four-year time limit in respect of submitting such claims.
Tax Code
Questions (350)
Seán Canney
Question:350. Deputy Seán Canney asked the Minister for Finance his plans to put in place a tax regime which properly reflects the costs that persons working from home incur in terms of electricity, heat and broadband; and if he will make a statement on the matter. [2042/22]
View answerWritten answers
The Programme for Government includes a commitment to facilitate and support remote working. The National Remote Work Strategy aims to make remote work a permanent feature of the Irish working experience in a way that maximises the economic, social and environmental benefits.
As part of the national remote working strategy: Making Remote Work, the Tax Strategy Group (TSG) reviewed the current tax arrangements for remote working in respect of both employees and employers. The TSG paper outlines the effects of Covid-19 on remote working in Ireland, provides an international comparison of remote working tax rules, sets out options for consideration with regard to enhancing the tax arrangements for both employers and employees in respect of remote work and evaluates those options in accordance with the Department of Finance Tax Expenditure Guidelines. Among other things, the paper acknowledged that employees may experience costs that they would otherwise not incur due to remote working such as additional heat, electricity and increased broadband reliance. However, it also pointed out that this was balanced by potential savings associated with working from home such as reduced commuting costs, as well as potential improvements in employees' work/life balance and reduced commuting time. The paper is published on the gov.ie website.
In line with Government policy to facilitate and support remote working, as part of Budget 2022, I announced that an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and internet services in respect of those incurred while working from home can be claimed by taxpayers. This measure enhances and formalises existing arrangements that are currently operated by Revenue on an administrative basis and its legislative aspects were provided for in Finance Act 2021.
The amount of the relief will depend on the particular circumstances of the remote worker in terms of the level of costs incurred and their marginal tax rate. However, this measure will provide some relief for those with additional expenses arising from working from home and it will support living standards as the economy recovers.
Any amounts reimbursed or to be reimbursed, directly or indirectly to the remote worker in relation to the expenses of working from home by his or her employer should be deducted from the amount of relief being claimed.
Revenue’s online system will enable individuals claim tax relief in real time as they pay for these costs throughout the year. The enhanced relief will apply for the year of assessment 2022 and subsequent years.
As the Deputy will be aware Budget 2022 also included a substantial income tax package that will be of benefit to everyone who pays income tax and aims to help citizens when prices are rising.
The Deputy may also wish to note that the Government recently approved the establishment of the Electricity Costs Emergency Benefit Scheme under which a payment of €100 will be made to each domestic electricity customer as a once off measure to mitigate the effects of the unprecedented rise in electricity prices on domestic electricity customers.
Tax Reliefs
Questions (351)
Cian O'Callaghan
Question:351. Deputy Cian O'Callaghan asked the Minister for Finance the number of persons that availed of the section 604A relief in each of the years 2014 to 2021; the number that were residential landlords; and if he will make a statement on the matter. [2091/22]
View answerWritten answers
The Deputy will be aware that section 604A of the Taxes Consolidation Act, 1997 provides for relief from Capital Gains Tax (CGT) on the disposal of certain investment property purchased between 7 December 2011 and 31 December 2014, where that property is held for 7 years. The gain attributed to that 7-year period will not attract CGT. However, where the property is held for more than 7 years, relief is reduced in the same proportion that the period of 7 years bears to the period of ownership, so if the property is held for 9 years, 7/9 of the gain will be relieved.
This relief was amended in Finance Act 2017 for disposals made on or after 1 January 2018, to provide that gains on land and buildings acquired between 7 December 2011 and 31 December 2014 are not chargeable gains where the land or buildings are held for at least 4 years and up to 7 years from the date they were acquired.
I would note that the structure of the relief means that 2018 is the first year that this relief could be claimed by taxpayers.
I am advised by Revenue that the available information in relation to relief from Capital Gains Tax under section 604A of the Taxes Consolidation Act 1997 is published on Revenue’s website at: www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/relief-on-disposal-of-certain-land-or-buildings.pdf
As indicated in the statistics at the above link, there were 890 claims made for relief under section 604A in 2019 (the latest year for which tax returns are available). Of these, 547 were associated with taxpayers who declared income in respect of residential property rental in the same year. There is insufficient information gathered on the tax returns to determine whether the properties covered by the relief are the same as those earning the rental income.