Tuesday, 26 Jul 2022

Written Answers Nos. 351-365

Tax Data

Questions (354, 355)

Pearse Doherty

Question:

354. Deputy Pearse Doherty asked the Minister for Finance the projected revenue generated by the local property tax in 2022, disaggregated by valuation band number in tabular form. [40244/22]

Pearse Doherty

Question:

355. Deputy Pearse Doherty asked the Minister for Finance the projected revenue generated by the local property tax in 2022 relative to property value of €312,000 and below for example, with respect to a property of value €400,000, the revenue generated by the tax on the first €312,000. [40245/22]

Written answers

Minister for Finance

I propose to take Questions Nos. 354 and 355 together.

I am advised by Revenue that the table below provides an estimated breakdown, by valuation band, of the projected revenue generated by Local Property Tax for the year 2022. This estimate is based on (i) the liability included in returns filed for the year 2022 and (ii) payments made for the year 2022 with no corresponding returns filed yet. The Deputy will wish to note that payments in respect of the 2022 LPT liability were made in both 2021 and 2022. The breakdown does not include deferred tax amounts.

Band Number	Property Band €	Projected Revenue€ m
1	0-200,000	79.6
2	200,001-262,500	84.4
3	262,501-350,000	101.9
4	350,001-437,500	63.6
5	437,501-525,000	39.6
6	525,001-612,500	23.3
7	612,501-700,000	18.2
8	700,001-787,500	12.9
9	787,501-875,000	11.2
10	875,001-962,500	7.7
11	962,501-1,050,000	5.7
12	1,050,001-1,137,500	3.8
13	1,137,501-1,225,000	4.2
14	1,225,001-1,312,500	3.3
15	1,312,501-1,400,000	2.9
16	1,400,001-1,487,500	1.8
17	1,487,501-1,575,000	2.6
18	1,575,001-1,662,500	1.8
19	1,662,501-1,750,000	2.6
20	1,750,000+	18.7
		490

I am advised by Revenue that as the LPT return requires liable persons to indicate the valuation band into which their property falls rather than the exact market value, Revenue does not have the necessary information to project the LPT revenue associated with the specific value threshold indicated by the Deputy.

Question No. 355 answered with Question No. 354.

Tax Code

Questions (356)

Robert Troy

Question:

356. Deputy Robert Troy asked the Minister for Finance if consideration is being given to reducing the current rate of VAT for the live entertainment industry in preparation of budget 2023 (details supplied). [40247/22]

Written answers

Minister for Finance

I am not in a position to give a view on this matter as it is a long-standing practice of Ministers' for Finance not to comment in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

Tax Code

Questions (357)

Niamh Smyth

Question:

357. Deputy Niamh Smyth asked the Minister for Finance if he is planning to review the vehicles registration tax on bringing newer vehicles into the State (details supplied) as part of budget 2023; and if he will make a statement on the matter. [40288/22]

Written answers

Minister for Finance

In general, all vehicles in the State must be registered here and Vehicle Registration Tax (VRT) is payable once only, at the time that a vehicle is registered. Typically, new vehicles are registered when they are sold to customers whereas imported used vehicles are registered within 30 days of entering the State.

In May this year, Revenue published a detailed analysis of the trends over recent years in VRT receipts and vehicle registrations. (The report is available on the Revenue website). Total VRT receipts in 2021 were €785.7 million which was 16.6% below their pre-pandemic level. The annual number of vehicle registrations also shows a fall in that period, most notably in relation to used vehicles. As Revenue’s analysis identifies, the changes in the level of vehicle registrations and VRT receipts are associated with several significant factors that have affected the vehicle market in the last few years, including the impact of the Covid-19 pandemic, Brexit, changes in the structure and rates for VRT, the trend towards lower-emitting vehicles, and fuel price changes.

VRT for cars is now structured to disincentivise the acquisition of higher polluting passenger vehicles and incentivise lower polluting options. The tax has two components: a charge linked to carbon dioxide (CO2) emissions (the largest portion of the tax calculation), and a charge in respect of nitrous oxide (NOx) emissions. The rate for CO2 portion of the tax ranges from 7% of the car’s value for the lowest emitters (including fully electric cars) to 41% for the highest emitters. As the uptake of lower emitting vehicles progressively increases, therefore, it can be expected that the yield from this tax will continue to decrease.

Since the UK left the EU Single Market and Customs Union, from 1 January 2021, the movement of goods from Great Britain into the EU is an importation from a third country and, in accordance with the terms of the Withdrawal Agreement, such goods must be declared to Customs, and are liable to customs duty (if applicable) and VAT at import. However, the EU-UK Trade and Cooperation Agreement (TCA) eliminated tariff duties for trade between the EU and Great Britain where the relevant rules of origin are met. This means that if vehicles are imported which are of UK origin, then a 0% duty applies, whereas duty of 10% applies to vehicles which are not of UK origin. In certain instances Returned Goods Relief may apply: where the vehicles were originally exported from the EU, have not been altered and are re-imported within three years of export from the EU. In very specific circumstances, relief from Value-Added Tax (VAT) may also apply where the goods are re-imported into the EU by the same economic entity that originally exported the goods out of the EU.

Under the terms of the Protocol on Ireland/Northern Ireland, the movement of goods between Northern Ireland and the EU effectively is regarded as a movement within the EU. However, a particular issue now exists in relation to certain used cars – known as “margin scheme cars” – following a significant change that the UK unilaterally made on 14 January 2021 which impacted considerably on the application of the Withdrawal Agreement and the Protocol. The UK has introduced significant changes to the VAT regime for used cars imported from Great Britain into Northern Ireland and extended the scope of the Margin Scheme to them. Under the Margin Scheme, a car dealer simply accounts for VAT on his or her gross profit margin on the sale of a used car, i.e. on the difference in the trade-in and resale prices. The UK had signalled that it would approach the European Commission to seek changes to the rules that apply under the Withdrawal Agreement/Protocol but they moved unilaterally on 14 January 2021 and published new rules that apply retrospectively from 31 December 2020. The UK asked the Commission for a permanent derogation from the VAT Directive to allow them to operate the scheme but the Commission refused on the basis that the margin scheme cannot be applied on sales in Northern Ireland of second-hand cars imported from any third country including Great Britain.

As a result, and after considering the scale of the threat posed by the abusive routing of cars imported into the State from Great Britain through Northern Ireland and the resulting non-payment of VAT at import, Revenue changed its guidance and indicated that cars imported from Great Britain into Northern Ireland after 31 December 2020 could only be subsequently imported into the State and reregistered here after they were declared to customs and customs duty, if applicable, and VAT at import were paid. This ensures that they are liable for VAT and Duty on the same basis as used cars brought into the State from Britain. The guidance also indicated that used cars imported into Northern Ireland from Great Britain prior to 1 January 2021 would not be subject to the need to complete a customs declaration and would not be liable to customs duty or VAT at import. The additional paperwork requirements have been kept to a minimum with a simplified Supplementary Import Declaration (SID) being required which allows the VAT on import to be paid.

The current approach addresses the risk of substantial tax avoidance that has been posed since the UK’s 14 January 2021 announcement, should parties who are importing used vehicles from Britain into the State decide to route the transaction via Northern Ireland. The aim is to bring equal tax treatment to used car imports from Great Britain into the State, whether they be imported through a direct or an indirect route. The approach is intended to be temporary in nature, pending a resolution to the issue between the UK and the European Commission.

These new trading arrangements have come about as a result of the United Kingdom’s decision to leave the European Union and the UK’s unilateral decision during January 2021 to extend the margin scheme to cars imported into Northern Ireland, despite the provisions of the Withdrawal Agreement and the TCA.

Banking Sector

Questions (358)

Jennifer Carroll MacNeill

Question:

358. Deputy Jennifer Carroll MacNeill asked the Minister for Finance if there is scope for a bank to repay a person in cases in which a person (details supplied) may have a unit linked policy with a bank exiting the Irish market and will therefore lose out on money; and if he will make a statement on the matter. [40340/22]

Written answers

Minister for Finance

While the withdrawal of KBC from the Irish market is disappointing, I do not have a role in the operations of any bank operating within the State. Decisions in this regard are commercial matters and are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis.

My priority is that the withdrawal takes place in an orderly manner and the importance of this is emphasised in all engagements with KBC, who are meeting with officials from the Department of Finance on a monthly basis.

The Central Bank, as regulator, has made it clear to the management of KBC Bank Ireland that it expects a customer-focused approach to be taken in all aspects of business throughout its withdrawal. The Central Bank expects a regulated entity, at a minimum, to have a sound legal basis on which to redeem customer investments, and to provide clear and timely notice to affected customers.

Both the Central Bank and I expect that all customers are protected and fairly treated throughout this period of change and that regulated entities proactively (as part of their decision-making processes) assess the risks a decision may pose to new and existing customers, and develop comprehensive action plans to mitigate these risks.

Further information on KBC investment products is available on KBC's website at: kbc.ie/investments/important-update

If a consumer is dissatisfied with the services provided by KBC, they can submit a complaint via the bank's formal internal complaint process. If their complaint is not resolved to their satisfaction through this process, they can then seek recourse via the Financial Services and Pensions Ombudsman (FSPO). The FSPO will take on complaints once the bank's internal complaints process has been exhausted.

Contact details for the FSPO are as follows:

- Address: The Financial Services and Pensions Ombudsman, Lincoln House, Lincoln Place, Dublin 2, D02 VH29.

- Tel: [phone]

- Email: [e-mail]

- Website: fspo.ie/

Question No. 359 answered with Question No. 328.

Revenue Commissioners

Questions (360, 382)

Claire Kerrane

Question:

360. Deputy Claire Kerrane asked the Minister for Finance the reason that the Revenue office in Athlone has remained closed to the public since 2019; and if he will request that this office re-open as an essential service to the public. [40359/22]

Sorca Clarke

Question:

382. Deputy Sorca Clarke asked the Minister for Finance the number of Revenue Commissioner offices that are not open to the public per county in tabular form; when public access stopped; and the plans, if any, to reintroduce or to increase public access to these offices. [40874/22]

Written answers

Minister for Finance

I propose to take Questions Nos. 360 and 382 together.

Revenue has confirmed that between 2015 and 2017 a number of their public offices transitioned from a walk-in service to an appointments service. Athlone moved to an appointments service in July 2016. This service allows people to schedule an appointment at a time that suits them, eliminating queue waiting times that are a feature of any walk-in service. At the end of 2019 appointments could be arranged in all Revenue offices and a walk-in service was available in Cork, Limerick, Galway and Dublin.

I am advised by Revenue that from the start of the Covid-19 pandemic, the majority of Revenue public offices, excluding ports, airports and trade facilitations stations closed to the public in line with public health guidelines. Revenue have confirmed that an in-person appointment service is being provided at the recently re-opened Revenue Information Office at Cathedral Street, Dublin 1. Appointments can be booked by calling the Appointment Helpline on 01 738 3660. It is envisaged that similar services will be provided in Limerick, Cork and Galway, from September 2022.

The in-person appointment service is in addition to the existing virtual appointment service being provided which largely reduces the need to visit in-person. Virtual appointments can also be booked through the Appointment Helpline.

Revenue continues to provide a full range of online services for taxpayers to manage their tax affairs, which for the most part removes any requirement to access public offices. These services, which include an online communications channel through the MyEnquiries system, are available 24/7, are easy to use and are fully secure. For taxpayers who, for a variety of reasons, may not have access to the online services, Revenue provides extensive support across its various telephone helplines and continues to operate a full service for queries being received through the postal system.

Tax Code

Questions (361)

Colm Burke

Question:

361. Deputy Colm Burke asked the Minister for Finance if Ireland's approach to the ongoing review by the European Commission of the Tobacco Tax Directive will include a push for a correlation between the level of taxation imposed on the use of tobacco inhaling products, including e-cigarettes and other vaping devices on the one hand and the level of nicotine contained therein; and if he will make a statement on the matter. [40367/22]

Written answers

Minister for Finance

Council Directive 2011/64/EU sets out EU rules on the structure and rates of excise duty applied to manufactured tobacco. The Directive defines and classifies various manufactured tobacco products according to their characteristics and lays down the relevant minimum rates of excise duty for the different types of products. The purpose of the Directive is to ensure the proper functioning of the internal market and a high level of health protection.

Every four years, the European Commission is required to submit a report to the Council on the rates and the structure of excise duties, accompanied – where appropriate – by a proposal for the revision of the Directive. The latest report was prepared by the Commission on 10 February 2020 and on 2 June 2020 the Council approved conclusions setting out its priorities in relation to the review of the Directive. A public consultation, open between 30 March 2021 and 22 June 2021, sought to ensure that all relevant stakeholders had an opportunity to express their views on the current rules and on possible changes to these rules. The Commission is expected to bring forward a new legislative proposal in December 2022 and the impact of this can be assessed when the proposal is available.

The Commission Report and the Council conclude that it is necessary to upgrade the EU regulatory framework, in order to tackle current and future challenges in respect of the functioning of the internal market by harmonising definitions and tax treatment of novel products (such as liquids for e-cigarettes and heated tobacco products), including products that substitute tobacco, in order to avoid legal uncertainty and regulatory disparities in the EU. Revision can also address the issue of tax-induced substitution across products and enable further measures to combat the illicit trade in tobacco to address tax control, revenue collection and health protection issues.

Ireland welcomes the review of the Directive to ensure that the rules remain fit for purpose, safeguard the proper functioning of the internal market and, very importantly, provide for a high level of health protection. This latter point is particularly significant in the context of the plan in the Programme for Government to introduce a targeted taxation regime to specifically discourage ‘vaping’ and e-cigarettes as well as in the European Action Plan against Cancer and our own national policy, Tobacco Free Ireland, both of which recognise that taxation plays a pivotal role in reducing tobacco consumption, in particular in deterring youth from smoking.

Ireland is committed to a policy of high taxation of tobacco to encourage people to quit smoking. Government health and social policy has focused on the further denormalisation of smoking generally as consumption of tobacco products remains one of the greatest avoidable and preventable health risks in our society. Similar considerations arise in respect of e-cigarette products and other alternative products.

Tax Code

Questions (362)

Jim O'Callaghan

Question:

362. Deputy Jim O'Callaghan asked the Minister for Finance the reason that the VAT rate of 23% has been charged for dog grooming; and if he will make a statement on the matter. [40380/22]

Written answers

Minister for Finance

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the 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. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive.

The provision of dog grooming services is not included in Annex III and as such is subject to the standard rate of VAT, currently 23%. There is no discretion under the Directive for Ireland to apply a reduced rate of VAT to this service.

The Deputy may be interested to know that by way of special derogation from the general rule, Ireland is permitted to continue its long-standing practice of applying a reduced rate, currently 13.5%, to the supply of services by a veterinary surgeon in the course of their profession, but there are strict restrictions on this derogation, including that the rate cannot be reduced below 12%. However, where a veterinary surgeon carries out a dog grooming services as part of the veterinary procedure, such as treating an illness or disease, the dog grooming is considered part of the veterinary procedure and the entire procedure is liable to VAT at the reduced rate. Where a veterinary surgeon provides a dog grooming service as a supply that is distinct from a veterinary procedure the service is liable to VAT at the standard rate of 23%.

Tax Yield

Questions (363)

Pearse Doherty

Question:

363. Deputy Pearse Doherty asked the Minister for Finance the estimated yield from introducing a windfall profits tax on energy providers if the corporation tax applied to their profits was increased from 12.5% to 20%, 25% and 30%, respectively. [40381/22]

Written answers

Minister for Finance

Energy policy, including increasing costs of energy supply and the taxation of profits, is a matter of key concern to the Government. In April, the Government approved and published the National Energy Security Framework, which sets the overarching response to the impacts of the war in Ukraine on the energy system in Ireland. The Framework outlines the structures which are in place within Government to monitor and manage our energy supplies, it sets out the plans which are in place to deal with energy security emergencies and it sets out how Government can support households and businesses save energy and save money.

The Framework includes a commitment to work with the European Commission and other Member States to consider the proposals set out in the EU’s REPowerEU plan. Under REPowerEU, it is acknowledged that taxation or regulatory measures aimed at removing gains created by the current crisis situation could be considered.

The increasing cost of energy supply is complex and there are many factors which must be considered, including energy security, rising input costs and costs to consumers, and the need to reduce dependence on fossil fuels. The complexities of the energy market and the range of producers and contracts must also be acknowledged. The Renewable Energy Support Scheme (RESS) contains strong consumer protection measures, with wholesale market revenues above the auction price returned to electricity consumers through the Public Service Obligation Levy. All of these aspects must be considered in connection with proposed new policy measures.

Energy policy is under the remit of the Department of the Environment, Climate and Communications (DECC). The Energy Security Energy Group, which is chaired by DECC and includes the Commission for Regulation of Utilities, is considering these issues in its role overseeing the implementation of the National Energy Security Framework.

Officials in DECC are working to examine where gains created by the current crisis situation may be occurring and to consider what, if any, action would be appropriate having regard to over-arching energy policy. This includes engaging with Department of Finance officials to determine potential fiscal response measures. This ongoing work includes consideration of potential negative impacts of any such action. For example, there is a risk that a windfall tax may lead to higher consumer costs and negatively impact upon investment in the energy sector, particularly in the area of renewables. This would negatively impact the Government's ambitions to tackle climate change through the reduction of carbon emissions.

It is worth noting that the Government has taken a number of measures to reduce the burden on consumers in relation to the cost of energy. This includes providing €200 worth of energy credit to every household in the country; reductions in fuel excise duty; and a reduction in the VAT rate for electricity and gas.

Trading profits of companies in Ireland are generally taxed at the standard Corporation Tax rate of 12.5%. I am advised by Revenue that the gross additional yield from increasing the corporation tax rate from 12.5% to 20%, 25% or 30% on the taxable profits of all energy providers is tentatively estimated to be in the region of €54 million, €90 million and €126 million respectively, for a full year. These estimates are based on the 2020 tax returns of energy providers, the latest year for which data are available and fully analysed.

It should be noted that these estimates do not take account of any potential change in behaviour by the entities concerned in response to changes in the tax rate.

Fiscal Data

Questions (364)

Pearse Doherty

Question:

364. Deputy Pearse Doherty asked the Minister for Finance the projected structural balance in 2022 and 2023 and the general Government balance in percentage and nominal terms in 2022 and 2023 associated with a structural balance of -0.5%. [40382/22]

Written answers

Minister for Finance

Estimates of the structural balance at present are subject to even more uncertainty than normal.

Having said this, my Department will publish estimates in the forthcoming budget, taking into account its revised fiscal forecasts and is revised economic assessment.

I would also stress that measures of the structural balance, as constructed in line with international standards, do not take into account the ‘excess’ corporate tax receipts that we are now seeing.

Tax Data

Questions (365)

Pearse Doherty

Question:

365. Deputy Pearse Doherty asked the Minister for Finance the projected number of persons subject to USC in 2022, disaggregated by income band in intervals of €10,000; and if he will make a statement on the matter. [40383/22]

Written answers

Minister for Finance

I am advised by Revenue that based on the latest Ready Reckoner (post-Budget 2022), it is estimated that approximately 2.07 million taxpayer units will be subject to the Universal Social Charge (USC) in 2022. A full USC distribution can be obtained on the Revenue Statistics webpage at: revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx

In addition, the projected number of taxpayer units subject to USC in 2022 disaggregated by the income bands outlined by the Deputy are shown in the table below. The Deputy will wish to note that the term “Taxpayer Units” includes jointly assessed couples who are treated as a single unit.

Income Band	Number of Taxpayer Units
1 to 10,000	0
10,001 to 20,000	300,000
20,001 to 30,000	397,000
30,001 to 40,000	348,000
40,001 to 50,000	255,000
50,001 to 60,000	183,000
60,001 to 70,000	135,000
70,001 to 80,000	94,000
80,001 to 90,000	73,000
90,001 to 100,000	57,000
100,001 to 110,000	42,000
110,001 to 120,000	32,000
120,001 to 130,000	27,000
130,001 to 140,000	18,000
140,001 to 150,000	17,000
150,001 to 160,000	13,000
160,001 to 170,000	9,000
170,001 to 180,000	9,000
180,001 to 190,000	7,000
190,001 to 200,000	6,000
200,001 to 210,000	5,000
210,001 to 220,000	4,000
220,001 to 230,000	4,000
230,001 to 240,000	3,000
240,001 to 250,000	3,000
250,001 to 260,000	2,000
260,001 to 270,000	2,000
270,001+	24,000
Total	2,069,000