Tuesday, 15 Feb 2022

Written Answers Nos. 291-309

Brexit Issues

Questions (291)

Michael Collins

Question:

291. Deputy Michael Collins asked the Minister for Finance if he will address a matter (details supplied) regarding the application of VAT; and if he will make a statement on the matter. [7732/22]

Written answers

Minister for Finance

I am advised by Revenue that for goods being imported from a non-EU country into the State, VAT is payable at point of importation. Imported goods are liable to VAT at the same rate as applies to similar goods sold within the State. They also require a Customs import declaration which is made using Revenue’s Customs Automated Import System (AIS). VAT registered traders may take credit for VAT paid on goods imported for the purposes of their business. This credit must be claimed in their VAT return in the taxable VAT period concerned.

To avoid payment at point of import, Postponed Accounting for VAT on imports is available to traders that are registered for VAT and Customs and Excise. The trader needs to fulfil certain conditions and the importer should enter a code on the import declaration indicating that they are using Postponed Accounting. This code will allow the VAT on import liability to be accounted for by the importer in their next VAT Return.

From 1 July 2021, the VAT de minimis of €22 was removed across the EU, meaning all goods imported into the EU are liable for VAT. These new VAT rules, which apply in all EU Member States, ensure that goods imported from outside the EU no longer have a preferential VAT treatment compared to goods purchased from within the EU, including from Irish retailers.

I am further advised by Revenue that a zero rate of VAT applies to exports which for VAT purposes, are goods directly dispatched to a destination outside the EU VAT area including Great Britain. Traders must ensure that the goods have left the EU and have evidence of export. In addition, each export requires a Customs export declaration. The declaration is submitted electronically using Revenue’s Automated Entry Processing (AEP) System. This declaration forms part of the proof required to be able to fully deduct any receivable VAT, that was paid in a previous related transaction leading up to the export, within the return for the VAT period concerned.

Brexit Issues

Questions (292)

Michael Collins

Question:

292. Deputy Michael Collins asked the Minister for Finance if he will address a matter (details supplied) regarding the collection of small amounts of VAT by An Post; and if he will make a statement on the matter. [7733/22]

Written answers

Minister for Finance

I am advised by Revenue that across the European Union, electronic customs import declarations are required for all parcels / packages coming from non-EU countries including the UK. In addition, since 1 July 2021, the VAT exemption for imported goods with a value of €22 or less was removed. From that date, all goods arriving into the EU from non-EU countries, regardless of their value, are subject to VAT. The applicable VAT rate for imports into Ireland is the relevant rate that would apply if the goods were purchased in Ireland. These new VAT rules ensure that goods imported from non-EU countries no longer have a preferential VAT treatment compared to goods purchased within the EU, including from Irish retailers.

In order to simplify the procedures for the importation of low value consignments, the EU introduced a scheme, where retailers in non-EU countries can register for the Import One Stop Shop (IOSS) which provides for the collection of VAT at the point of sale rather than at the point of import. The majority of large retailers in non-EU countries including in the UK, have signed up for this scheme. However, where the retailer has not signed up to the IOSS, then VAT is payable on import into Ireland regardless of the amount due.

Consumers should always check if any additional taxes and charges, payable on goods purchased from outside the EU including from the UK, have been included in the price displayed online. That way they should be able to avoid being presented with unexpected charges at a later stage.

Neither my Department nor Revenue have a role to play in the regulation of fees charged by businesses who deliver goods to an importer. That is a commercial arrangement between the business concerned and the importer. These businesses do not act on behalf of, nor do they collect the relevant taxes and duties on behalf of Revenue, but rather they act on the behalf of the importer and assist the importer in the correct clearance of their goods imported from outside the European Union.

Tax Yield

Questions (293, 294)

Neale Richmond

Question:

293. Deputy Neale Richmond asked the Minister for Finance the amount received in the Exchequer in each of the years 2011 to 2021 from the taxes imposed in the hospitality sector on tips, gratuities and service charges in tabular form; and if he will make a statement on the matter. [7788/22]

Neale Richmond

Question:

294. Deputy Neale Richmond asked the Minister for Finance if he has considered making tips received in the hospitality sector tax free in view of the legislative progress made to protect employee tips and gratuities; and if he will make a statement on the matter. [7789/22]

Written answers

Minister for Finance

I propose to take Questions Nos. 293 and 294 together.

It is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation. This is a well established and broadly accepted principle.

Section 19 of the Taxes Consolidation Act (TCA) 1997, sets out that tax under Schedule E shall be charged in respect of every public office or employment of profit. In addition, Section 112 of the TCA 1997 brings into charge all salaries, fees, wages, perquisites or profits of any kind arising from an office or employment. Therefore, the long-standing position is that all tips, gratuities and service charges arising from an office or employment are chargeable to income tax under Schedule E in accordance with Section 112.

Gratuities from customers for example, service charges in hotels or tips in restaurants, paid to the employer and subsequently paid out to an employee should be included in pay for the income tax week or month in which they are paid out. These tips constitute pay for the purposes of the PAYE system. The employer is not required to provide a separate breakdown to Revenue detailing these amounts.

However, in a situation where an employee receives tips directly from customers, the employer is not obliged to operate PAYE and in that case, the tips and gratuities are fully taxable and should be included by the employee in his or her income tax return. It is important to point out that such tips constitute pay for the purposes of the PAYE system. Where such income is declared by employees themselves, there is no requirement that it be itemised separately from other forms of income on the relevant tax returns.

Therefore, I am advised by Revenue that is not possible to provide the information requested by the Deputy as regards the precise amount received by Exchequer in the form of tips, gratuities and service charges, from Revenue data.

As referenced by the Deputy in his question, the Department of Enterprise, Trade and Employment is progressing legislation on tips and gratuities and this legislation will prohibit the practise of using tips or gratuities to top up wages. It will also ensure that electronic tips and gratuities, which are much more common these days, have to be divided fairly and equitably among the staff. In addition, the legislation will provide transparency to customers so they will know what the policy is on tips and service charges, how they are managed and to whom they go.

For the reasons outlined in the opening paragraphs of my reply, I have no plans to amend the tax treatment of tips and gratuities.

Question No. 294 answered with Question No. 293.

Insurance Industry

Questions (295)

John Lahart

Question:

295. Deputy John Lahart asked the Minister for Finance the reason that a community run and operated community centre (details supplied) which has not had an insurance claim over 15 years has seen its premia rise by €10 in the past year; and if he will make a statement on the matter. [7919/22]

Written answers

Minister for Finance

At the outset, it is important to note that neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products, which is ultimately a commercial matter for each provider. As the Deputy will appreciate, I am also unable to comment on individual cases.

Notwithstanding this, the Government recognises that the cost of insurance remains a significant issue for many groups, including community and voluntary organisations. The Government is therefore pursuing a broad range of measures through the Action Plan for Insurance Reform in order to improve both the affordability and availability of this key financial service, including for such groups.

One of the key developments under the insurance reform agenda has been the creation of the Office to Promote Competition in the Insurance Market, chaired by Minister of State Fleming. The Office aims to both improve costs and increase the availability of cover by encouraging greater competition in the Irish market. Since its establishment, the Office has held over 60 meetings with a wide range of stakeholders on issues surrounding competition. Officials are also working with IDA Ireland to leverage the ongoing reform work in order to attract potential new market entrants here, and are identifying targets to engage with. This will, in the first instance, seek out providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market.

More generally, the Government is committed to ensuring that the benefit of the various reforms being implemented, notably the new Personal Injuries Guidelines, are passed onto customers. In this regard, Minister of State Fleming recently met with the CEOs of the major insurance providers in November to discuss a variety of issues, including expanding insurers’ risk appetite in underserved areas, such as those raised by the Deputy. Furthermore, he has also met with insurance providers who are seeking to expand their cover here.

In conclusion, this Government is committed to improving both the cost and availability of insurance in Ireland through continued implementation of the current reform agenda. With regard to community centres, upcoming priorities of particular note including making changes to the duty of care, and legislating with a view to increasing the number of claims settled by the Personal Injuries Assessment Board. It is my intention to continue working with colleagues across Government to help to deliver these key actions and to ensure that the overall implementation of the Action Plan leads to a more competitive and sustainable insurance market.

Tax Code

Questions (296)

Louise O'Reilly

Question:

296. Deputy Louise O'Reilly asked the Minister for Finance if the new European Union VAT rules agreed in December 2021 at European Council level will impact on Ireland's existing derogations from European Union VAT rules. [7983/22]

Written answers

Minister for Finance

As the Deputy will be aware, the VAT rating of goods and services is subject to the requirements of the EU VAT Directive, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT.

However, the Directive allows for historic VAT treatment to be maintained under certain conditions and Ireland has retained the application of the reduced rate of VAT, currently 13.5%, to a range of services under what is known as a 'parked rate'. The continuation of these parked rates is conditional on the rate being no less than 12%.

In addition, Ireland maintains a zero VAT rate on certain items under a derogation from EU VAT law which allows Member States to retain certain zero rates for goods and services which were expressly covered in their national VAT legislation on 1 January 1991.

Ireland’s current application of VAT rates has for the most part been preserved through the retention of historical derogations and exemptions or through the expansion of Annex III of the VAT Directive.

Officials in my Department will be reviewing the options now available to Ireland in setting VAT rates.

Future tax changes are generally taken in the context of the Budget. Deputies will be aware that my officials prepare a series of papers containing tax options for the Tax Strategy Group to be considered in the context of the budgetary process, alongside a wide range of submissions from various stakeholders and lobby groups.

Banking Sector

Questions (297)

Róisín Shortall

Question:

297. Deputy Róisín Shortall asked the Minister for Finance the steps he is taking to ensure that mortgage applicants that have suffered from mental health issues in their lives are not discriminated against when seeking mortgages due to being unable to secure mortgage protection insurance; if he will consider a State backed public option for persons who cannot secure this insurance on the private market; and if he will make a statement on the matter. [8062/22]

Written answers

Minister for Finance

When a person applies for a mortgage loan to buy a home, the person will generally be required to take out mortgage protection insurance. In most cases, a lender is legally required under section 126 of the Consumer Credit Act 1995 to make sure that a mortgage applicant has mortgage protection insurance in place before granting a mortgage loan.

This is an important statutory provision which is designed to protect the borrower's dependants and their home should the borrower die before the mortgage has been repaid. However, the Act also recognises that in certain cases such protection is not necessary or would be inappropriate and it provides for a number of limited exemptions to this statutory obligation such as where the borrower belongs to a class of persons which would not be acceptable to a life insurer, or would only be acceptable to an insurer at a premium significantly higher than that payable by borrowers generally.

In such circumstances, there is no statutory requirement on a mortgage lender to arrange for mortgage protection insurance and it is then a matter of the lender’s own internal policy to decide on whether or not it wishes to ensure that such a policy is in place. This will be a commercial decision as opposed to a statutory requirement for an individual mortgage lender, and it is not possible for me to instruct lenders on their individual lending policies.

However, if a person is not satisfied with the way a regulated mortgage provider has dealt with them in relation to an application for a mortgage, 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, including the requirement for the regulated entity to act with due skill, care and diligence in the best interest of its customers, the consumer can also complain directly to the regulated entity and, if they are 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.

With regard to any intervention by the State to provide insurance in these circumstances, I would be cautious about the introduction of a State-backed insurance scheme in this jurisdiction generally, for a number of reasons.

Firstly, any State insurance scheme would be required to comply with the same prudential rules under the Solvency II Directive as private companies, thereby meaning that the cost would still have to reflect the risk involved.

Secondly, there is no reason to believe that the State would be any better at managing risks than private firms, and therefore be in a position to provide insurance more affordably.

Thirdly, such an approach could actually decrease competition, with insurers potentially discontinuing certain lines if there is a view the State will insure these risks instead.

In conclusion, any such proposals for State intervention, while well intended and which may appear as representing an easy solution, are likely to lead to unintended consequences. Accordingly, I am not convinced that a State-backed insurance scheme would be a solution to either the cost or availability of mortgage protection insurance.

Covid-19 Pandemic Supports

Questions (298)

Mairéad Farrell

Question:

298. Deputy Mairéad Farrell asked the Minister for Finance the reason that Ireland has not requested pre-financing from the Recovery and Resilience Fund. [8123/22]

Written answers

Minister for Finance

Article 13 of the Recovery and Resilience Facility Regulation provided for pre-financing. This allowed Member States to request early disbursement of funding up to a maximum of 13% of their overall allocation. For Ireland, this would have amounted to pre-financing of €129 million from our overall allocation of €915 million.

The level of pre-financing available to Member States was dependent on the amount of money that the European Commission was in a position to raise during mid-2021 on the markets. Indications during this time were that the European Commission expected to raise approximately €40 billion, and that this would not be sufficient to meet demand if all Member States were to request the maximum allowable 13%.

The Department was aware that a number of Member States with a worse economic outlook than Ireland, or which had been more severely impacted by the Covid-19 pandemic than Ireland, intended to request the maximum amount of pre-financing available to them under the terms of the Regulation.

Ireland's 2021 Summer Economic Statement noted an environment of increasingly positive economic indicators, with high frequency data on consumer expenditure and job postings show signs of a strong economic recovery taking hold in line with the easing of public health restrictions at that time. Q1 2021 data showed very strong GDP growth rate for Ireland and it was clear at that time that the level of GDP for Ireland would be higher than anticipated. On this basis, the Department incorporated an upward revision to its GDP projection for 2021 to 8¾ per cent, and revenues revised upwards by €1.6 billion relative to projections.

In that context, and given the small overall size of Ireland's Recovery and Resilience Plan, comparatively with our European colleagues, Ireland took the decision not to seek pre-financing so as not to impact or deprive other Member States who were more severely impacted by the pandemic of the opportunity to avail of their maximum pre-financing amount.

Environmental Impact Assessments

Questions (299)

Thomas Pringle

Question:

299. Deputy Thomas Pringle asked the Minister for Finance if his Department has instituted any mechanisms for determining the environmental impact of certain categories of digital financial transactions, such as the sale and purchase of cryptocurrencies; and if he will make a statement on the matter. [8202/22]

Written answers

Minister for Finance

With regards to the sale and purchase of cryptocurrencies, it has always been my intention that any regulation in this space would be adequate, proportionate and comprehensive without discouraging innovation.

In September 2020, the European Commission published the Digital Finance Package containing measures which aim to enable and support the development of digital finance while mitigating risks.

The Digital Finance Package includes:

1. Strategy on Retail Payments

2. Legislative proposal on a market in crypto-assets (known as the MICA regulation)

3. Legislative proposals on digital and operational resilience (known as the DORA regulation)

4. Legislative proposal on a pilot regime for market infrastructures based on distributed ledger technology (known as the DLT pilot).

On 24 November 2021, the European Parliament announced that it had reached agreement with the Council on the DLT pilot scheme.

In the final text on paragraph 18a of the DLT Pilot Regime, specific references are made to the interaction of climate policies and the pilot. The text cites the need for “the operation of a DLT market infrastructure should not undermine Member-States climate policies. Thus, it is important to further encourage the development of and investments in low or zero emission DLTs”.

On MICA, the European Parliament is still reviewing the proposal. The Council reached general agreement under the Slovenian presidency in November of 2021. The expectation is that trilogues would commence under the French presidency. The discussions are still ongoing and it is not possible to say at this point in time whether the result of the trilogues will result in an agreement to include a reference to the environmental impact of certain categories of digital financial transactions in the regulation.

In Ireland, as of 23 April 2021, the providers of certain services in relation to virtual assets (digital assets or cryptocurrencies) must meet anti-money laundering and countering of financing of terrorism (AML/CFT) obligations, under part 4 of the CJA 2010 to 2021.

All VASPs (virtual asset service providers) established in Ireland are required to register with the Central Bank for these AML/CFT purposes.

Finally, my Department will continue to work closely with our partners in the European Union to ensure that the appropriate regulation recognises the risks presented by crypto assets including but not limited to their impact on climate objectives.

Credit Register

Questions (300)

Seán Haughey

Question:

300. Deputy Seán Haughey asked the Minister for Finance if he will request the Central Credit Register which is operated by the Central Bank to expedite an application for a credit check by a person (details supplied) given that it is required for the completion of a property transaction in the coming days; and if he will make a statement on the matter. [8263/22]

Written answers

Minister for Finance

The Central Credit Register (CCR) was established by the Central Bank under the Credit Reporting Act 2013.

The obligations under the Act apply only to Credit Information Providers (lenders). Lenders are obliged to submit personal and credit information on credit applications and credit agreements which amount to €500 or more to the CCR. Lenders are also obliged to enquire on the CCR when considering loan applications of €2,000 or more and may do so for loans of less than €2,000 and in certain other circumstances.

The Central Bank advises that responses to automated enquiries from lenders (which must include precise personal identification information) are typically fulfilled in real time. Any extension to the response time is usually due to queries which may arise in relation to the personal identification information provided by the lender. The Central Bank advises that there is no corresponding obligation under the Act on Credit Information Subjects (borrowers) to produce a credit report when applying for credit.

Borrowers may apply for their credit report any time, free of charge, online at www.centralcreditregister.ie. For data protection purposes, borrowers must include complete identification documents (passport, PPSN and address) and a completed application form.

Each application is scrutinised for compliance before being sent for completion. Any decision by an individual to produce their credit report to a third party is solely a matter between the individual and that third party.

The Central Bank advises that recent increases in activity by borrowers are likely to be as a consequence of increased awareness of the CCR and a possible knock-on effect of the cessation of the Irish Credit Bureau in late 2021. The processing of individual credit report applications is an operational CCR matter. However, the Central Bank advises that the time required to provide a credit report to a borrower is approximately three weeks and that efforts are underway to increase resources with a view to reducing this timeline.

Tax Reliefs

Questions (301)

Jim O'Callaghan

Question:

301. Deputy Jim O'Callaghan asked the Minister for Finance if consideration will be given to making childcare costs tax deductible; and if he will make a statement on the matter. [8330/22]

Written answers

Minister for Finance

The Government acknowledges the continuing high cost pressures on parents, particularly those with young children. In recognition of these cost pressures, a number of support measures are already in place to ease the burden on working parents. These include various tax-exempted child-care related supports provided by the Minister for Children, Equality, Disability, Integration and Youth and measures such as the Working Family Payment provided by the Minister for Social Protection.

In relation to direct expenditure measures, Budget 2022 announced the introduction of a number of measures to support parents in respect of childcare costs, including:

- The universal subsidy of the National Childcare Scheme will be extended to children of all ages.

- There will be a change to the practice of deducting hours spend in the Early Childhood Care and Education pre-school programme or school from the entitlement to subsidised hours of care.

- A new Core Funding stream will come into effect from September 2022 which will require participating providers to maintain their fee levels at or below September 2021 levels.

This will ensure that the full affordability benefits of the National Childcare Scheme, and the Early Childhood Care and Education programme, are felt by parents.

With regard to taxation measures, and separate to the above:

- The Accelerated Capital Allowances scheme for Childcare Services was introduced to encourage employers to develop childcare facilities onsite for their employees.

- Individuals who provide child-minding services in their own home may claim childcare services relief each year, provided that they do not receive more than €15,000 income per annum from the child-minding income.

- Furthermore, a Single Person Child Carer tax credit of €1,650 is available as well as an additional standard rate band of €4,000. This credit and band is payable to any single person with a child under 18 years of age or over 18 years of age if in full time education or permanently incapacitated. The primary claimant may relinquish this credit and increase in the rate band to a secondary claimant with whom the child resides for not less than 100 days in the year.

In relation to the specific question raised by the Deputy, I do not have any plans currently to add to the measures currently in place by making childcare costs tax deductible.

Tax Yield

Questions (302)

Darren O'Rourke

Question:

302. Deputy Darren O'Rourke asked the Minister for Finance further to Parliamentary Question No. 261 of 8 February 2022, the breakdown of carbon tax income by year and categorised baseline, additional and total. [8356/22]

Written answers

Minister for Finance

The full yields for carbon tax revenue for the years in question are set out in the table below:

Year	Carbon Tax Revenue (VAT exclusive)
2017	€419,603,362
2018	€431,131,924
2019	€430,461,735
2020	€493,572,969
2021	€652,287,332

In Budget 2020, the additional yield estimated to arise from the €6 increase was €90 million in 2020. This figure was allocated for expenditure as detailed in the document “ The Carbon Tax Increase, What it will be spent on”, referred to in response to the Question No. 261 and available on the Budget.gov.ie website.

In Budget 2021, the additional yield estimated to arise from the €7.50 increase was €108 million in 2021. This figure was added to the estimated additional yield arising from the full year increase of the €6 increase, which was €130 million, so the allocation of carbon tax funds for specific expenditure that year was €238 million. The specific allocation of funds is set out in the document “Budget 2021 The Use of Carbon Tax Funds 2021”, also referred to in response to Question No. 261 and also available on the budget website.

For clarity, the yearly carbon tax revenue allocated for specific funding of targeted welfare measures, energy efficiency improvements, the Just Transition and funding to encourage greener and more sustainable farming methods is set out in the table below. This policy began in 2020, so no yearly allocations are relevant for prior years. As referred to above, more detail on the specific allocations of funding is set out in the documents published by DPER and available on the budget.gov.ie website.

Year
2020	€90,000,000
2021	€130,000,000

Tax Code

Questions (303, 304)

Catherine Murphy

Question:

303. Deputy Catherine Murphy asked the Minister for Finance the revenue liability that sports clubs incur in instances in which they are granted a house from a developer to offer as a prize in the course of their fundraising activities; and if he will further clarify whether any duty or tax are due by either the developer, sports club organising the raffle or the eventual winner of the prize. [8380/22]

Catherine Murphy

Question:

304. Deputy Catherine Murphy asked the Minister for Finance if he or the Revenue Commissioners have engaged with officials in the Department of Justice regarding the rules that govern raffles in instances in which houses are offered as a prize in the context of the Gaming and Lotteries (Amendment) Act 2019. [8381/22]

Written answers

Minister for Finance

I propose to take Questions Nos. 303 and 304 together.

As the Deputy is aware, I introduced a Committee stage amendment to section 604 of the Taxes Consolidation Act 1997 in the 2021 Finance Act which provides that where an individual disposes of their principal primary residence by way of a lottery or game with prizes, any gain over the market value of the property is subject to Capital Gains Tax. During the preparation of this amendment as well as during the passage of the Finance Bill through the Houses of the Oireachtas, my officials engaged with officials from both Revenue and the Department of Justice in relation to this provision in order to ensure that it was not contrary to Department of Justice policy and legislation in this general area.

I would note that this amendment affects only the disposal of a principal primary residence through a game or lottery and the winner of a such prize is not subject to CGT on their winnings.

The practice of raffles or lotteries being run by different organisations, mostly community-based (including sports clubs and local schools), to generate funds for their activities has been commonplace for many years. Increasingly, the practice has extended to a situation where a real asset, such as a car or a house, is put forward as the prize for the winner rather than a cash sum.

I am advised by the Revenue Commissioners that the Deputy’s question requires consideration across a number of tax heads, as set out below.

Stamp Duty

From the description provided, it is not clear whether there will be a transfer of a house from the developer to the sports club and a subsequent transfer to the raffle winner, or a transfer directly from the developer to the raffle winner. However, I can advise that the transfer of a property (including a house) constitutes a conveyance on sale for the purposes of the Stamp Duties Consolidation Act (SDCA) 1999. Stamp duty is payable by the transferee, whether or not it was transferred by way of sale, gift or as a result of winning a raffle. Where a property is sold, or otherwise transferred, for less than market value, section 30 SDCA 1999 imposes a charge to stamp duty at the market value of the property.

Stamp duty on transfers of residential property is chargeable at the rate of 1% where the market value does not exceed €1 million. Where the market value exceeds €1 million, stamp duty is chargeable at 1% on the first €1 million and 2% on the balance in excess of €1 million.

Capital Acquisitions Tax

In the normal course of events, a charge to capital acquisitions tax (CAT) arises on the gifting of assets between individuals or groups of individuals. The beneficiary of the asset being transferred is liable for this charge. Notwithstanding this, section 76(2) of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides that a gift or inheritance taken for public or charitable purposes is exempt from tax and is not taken into account in computing tax, to the extent that Revenue is satisfied that it has been, or will be, applied for purposes which in accordance with the laws of the State are public or charitable.

While the CATCA 2003 does not provide a definition of “charitable purpose”, section 3 (1) of the Charities Act 2009 provides that each of the following shall be a charitable purpose:

- the relief of poverty

- the advancement of education

- the advancement of religion

- other purposes beneficial to the community.

Donations to local sports clubs are generally considered to be beneficial to the community and consequently a donation of a dwelling house by a local sports club for the purposes of fund raising would generally be exempt from CAT.

On the matter of the transfer of the dwelling house to a winner of a raffle, section 82 CATCA 2003 provides for an exemption from CAT for certain types of receipts. Among these is the receipt of winnings from betting (including pool betting) or any lottery, sweepstake or game with prizes. Such winnings are exempt from CAT provided those winnings are received bona fide, i.e. the winnings are received from betting or games the outcome or which is not certain or cannot be controlled by either the organiser or the winner. Accordingly, provided the raffle is run by the local sports club in a bona fide manner, the receipt of the dwelling house by the winner will be exempt from CAT.

Capital Gains Tax

It is not clear from the description provided as to whether the property transferred is an investment property; however, it is assumed, based on the transferor being described as a developer, that the property is stock in the developer’s trade, and not an investment asset. On this basis, no capital gains tax (CGT) consequences arise on the transfer of the property by the developer.

Should the property be transferred by the sports club to the prize winner, any gain arising on the transfer will be exempt from CGT, as charitable and sporting organisations may be exempt from CGT in respect of chargeable gains which arise on the disposal of their assets, should the gain arising on the disposal be applied to charitable purposes or for the purpose of promoting athletic or amateur games or sports, in accordance with section 609 and/or section 610A of the Taxes Consolidation Act (TCA) 1997.

Winnings from betting, lotteries, sweepstakes or games with prizes are exempt from CGT, as are rights to winnings from those sources (for example, the sale of a bet), by virtue of section 613(2) TCA 1997. As such, no CGT liability arises for the prize winner on wining the property. If the prize winner subsequently disposes of the property, the base cost of the asset is its market value at the date it is acquired, and CGT will be calculated on any rise in value since it was acquired.

Income Tax/Corporation Tax

On the assumption that the property transferred by the developer is part of their stock in trade, the transfer will be reflected as a sale at cost in their accounts for the relevant accounting period; whether or not this cost may be deducted in arriving at taxable profits depends on whether the expense meets the requirement of having been incurred wholly and exclusively for the purpose of the developer’s trade.

Section 235 TCA 1997 provides an exemption from income tax or corporation tax, as appropriate, for bodies which are established and existing for the sole purpose of promoting:

- an athletic game or an athletic sport, or

- an amateur game or an amateur sport.

The exemption applies to that portion of the income of the “approved body” which has been or will be applied for the purpose of promoting an athletic or amateur game or sport. This means that if the proceeds of the raffle are applied for such purpose then the exemption should apply. However, each case would need to be considered based on its own facts.

VAT

The VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. Revenue’s understanding of the transaction, from the details provided, is that a developer initially developed a property for sale which was then granted or given to a sports club as a prize for fundraising activities and where the developer did not receive consideration for the house. In these circumstances and in accordance with VAT legislation the developer has diverted the property to a non-business use which is known as a 'self-supply'. As this is the first supply of the property by the developer, it is, therefore, a taxable supply and, in simple, terms, the value of the self-supply is the cost incurred by the developer in relation to the property. The net effect of the rule is that where a property is diverted to a non-business use there is a claw-back of the VAT that had been deducted on the acquisition or development of the property.

Question No. 304 answered with Question No. 303.

Tax Reliefs

Questions (305)

Charles Flanagan

Question:

305. Deputy Charles Flanagan asked the Minister for Finance if he will consider abolishing the current disregard amount in place in respect of tax relief on college fees for PAYE parents who are not eligible for assistance through the SUSI grant scheme; and if he will make a statement on the matter. [8410/22]

Written answers

Minister for Finance

Section 473A of the Taxes Consolidation Act 1997 provides for income tax relief in respect of qualifying tuition fees paid by an individual for a third level education course (including a postgraduate course), subject to the 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 commenced or the tax year when the instalment is paid.

“Qualifying fees” mean tuition fees in respect of an approved course at an approved college and includes what is referred to as the “student contribution”. No other fees e.g. administration fees, examination fees, capitation fees, qualify for tax relief. 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. In accordance with the governing legislation, an amount must be disregarded, whether the claim is in respect of one or more students. The disregarded amount per claim 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.

Issues relating to the direct cost of further and higher education are ones primarily for the Minister for Further and Higher Education in the first instance and I am aware that this is an area of particular focus for Minister Harris at present.

However, in relation to the specific issue raised in the Deputy's question, I do not have any plans currently in relation to the removal of the disregard mentioned.

Defective Building Materials

Questions (306)

Thomas Pringle

Question:

306. Deputy Thomas Pringle asked the Minister for Public Expenditure and Reform the way the OPW ensures that buildings it has responsibility for are built using blocks that are free from MICA and deleterious materials in construction projects in County Donegal; if the OPW has checked existing buildings for the presence of same; and if he will make a statement on the matter. [7651/22]

Written answers

Minister of State at the Department of Public Expenditure and Reform

The Office of Public Works carefully and professionally specifies its building materials and supervises their use and installation with qualified architects and engineers.

We have not detected any mica problems in Donegal or elsewhere in OPW designed and supervised projects.

State Bodies

Questions (307)

Mairéad Farrell

Question:

307. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform the names of the bodies that will be migrating to shared financial services in 2022, in tabular form (details supplied); the date they are expected to migrate; if there is a service level agreement now in place; and the cost of bringing each of these to shared financial services. [7980/22]

Written answers

Minister for Public Expenditure and Reform

The National Shared Services Office (NSSO) is currently planning to take the first wave of public service bodies live on the new system and into Finance Shared Service by the end of Quarter 1 2022.

This programme is a key enabler for the Financial Reporting Reform programme which is being led by the Department of Public Expenditure and Reform. This significant transformation programme will introduce a shared service delivery model and implement a common chart of accounts, supported by a common set of standardised processes and controls, on one single technology platform for central Government Departments and Offices, replacing the 33 different financial management systems and the 31 reporting systems currently in use.

A budget allocation of €115m (including VAT) was sanctioned under a Government decision, for the delivery of this programme, which provides for the provision of the core Oracle eBusiness financial management solution, standardised finance and payment processes, increased automation, and integration with third party systems such as eInvoicing

The following Departments and Offices will be part of the first wave:

The Department of Finance, including Exchequer

The Department of Public Expenditure and Reform, including the Superannuation and Secret Service Votes

The Office of the Comptroller and Auditor General

President’s Establishment

Office of the Ombudsman

Office of Government Procurement

Office of the Chief Government Information Officer

National Shared Services Office

A further 15 clients will commence planning for migration during 2022 as part of the second wave. While work is still underway in respect of the Wave 2 migration, I have asked NSSO to

provide the Deputy with the identities of those clients as soon as finalised.

In total, some 50 Central Government Bodies will migrate to Finance Shared Service, on a single standardised system, over the course of full deployment.

A Service Management Agreement, which sets out the scope of the services, is in place.

Public Sector Staff

Questions (308)

Matt Carthy

Question:

308. Deputy Matt Carthy asked the Minister for Public Expenditure and Reform the intended form and timeline of the planned review to examine salaries and appointments; if the review will encompass salaries for those in semi-State companies or State funded agencies; and if he will make a statement on the matter. [8022/22]

Written answers

Minister for Public Expenditure and Reform

I remain committed to ensuring that the recruitment processes for Senior Public Service posts are open, transparent, and objective. Accordingly, as recently outlined to the Committee on Finance, Public Expenditure and Reform, and Taoiseach, I am moving to establish an external Review Panel to examine the current recruitment process for Senior Public Service posts and the process for determining the terms and conditions of employment for these appointments.

Officials in my Department are currently examining these issues and are due to advise me on the appropriate Terms of Reference of the Review, the scope of the Review and also the potential membership of the Review Panel. I anticipate that this process will be concluded shortly and it is my intention to bring proposals to Government in the coming weeks as the approach to be adopted is finalised.

Flood Risk Management

Questions (309)

Aindrias Moynihan

Question:

309. Deputy Aindrias Moynihan asked the Minister for Public Expenditure and Reform the up-to-date position on advancing flood defence at a location (details supplied); and if he will make a statement on the matter. [8063/22]

Written answers

Minister of State at the Department of Public Expenditure and Reform

The OPW in partnership with Cork County Council are engaging proactively to progress a preferred option for a flood relief scheme at Ballymakeera/Ballyvourney, that will provide proposals for a Public Exhibition. This exhibition will inform a scheme that is technically, environmentally and economically acceptable to proceed to detailed design stage.

Environmental consultants have finalised surveys in 2021 to complete the Environment Impact Assessment Report and to ensure that suitable mitigation requirements are implemented and the appropriate processes followed.

The Ballymakeera/Ballyvourney Flood Relief Scheme is being funded from €1.3 billion for flood risk management allocated by the Government under the National Development Plan to 2030.

In the interim, Cork County Council has been approved funding under the OPW’s Minor Flood Mitigation Works and Coastal Protection Scheme. This includes approval of €10,000 in February 2012 for the removal of overhanging growth and other obstacles to the Sullane River 3.4 miles from Ballyvourney bridge and an additional €187,248 approved in October 2018 for the provision of temporary flood defence measures. These interim works are subject to Part 8 Planning, which has now been awarded. Cork County Council is planning to procure a consultant for detailed design of these works in the first half of this year..