Written Answers Nos. 144-163
144. Deputy Brendan Griffin asked the Minister for Finance if he will reduce the rate of VAT on residential construction to incentivise the building of new homes; if he will consider further measures to reduce the tax burden on the development of new living units; and if he will make a statement on the matter. [3046/23]
View answerThe VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate (currently 23% in Ireland), unless they fall within the categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT.
Following amendments to Annex III of the VAT Directive, agreed in April 2022, a limited number of categories within Annex III of the VAT Directive now permit a zero rate. However, it is not possible to apply a zero rate to construction of any kind.
Ireland already applies a reduced rate of 13.5% to all construction, including new builds. It is not possible under the VAT Directive to provide separate VAT treatment for new builds in comparison to other forms of residential construction. In addition, there is no obligation for any VAT reduction to be passed to the final consumer.
In addition, the Deputy should note that while, it is possible for Ireland to apply the 9% reduced VAT rate to the supply and construction of housing, as part of a social policy and to the repair and renovation of residential housing, it is not possible to apply the 9% rate to non-residential construction.
Thus, if a 9% VAT rate was applied to the construction of new residential properties, this would require the application of two separate VAT rates to different construction services. Revenue has indicated that this would be very difficult to administer and could lead to accidental or fraudulent underpayments of VAT, where an underpayment of VAT may arise in the construction of an apartment block. The apartment block may for instance be classed as purely residential in order to avail of a reduced rate of 9% and then subsequently become a mixed-use block with a commercial/retail element on the ground floor. Revenue believe that policing the measure would be difficult and could result in fraudulent behaviour.
146. Deputy Neasa Hourigan asked the Minister for Finance if he will outline the international tax guidelines for large-scale private investment funds that seek to invest in Ireland’s natural resources; and if he will make a statement on the matter. [2982/23]
View answerI understand, following clarification from the Deputy’s office, that the Deputy is looking for further information on processes where a State body engages with investment from large-scale international private investors in our national strategic resources or infrastructure, with reference to recent reports of investments in Irish forestry.
Policy responsibility for the development of forestry in Ireland is within the remit of the Minister for Agriculture, Food and the Marine and of course Coillte.
I understand that the issue referred by the Deputy arises in the context of the plan to expand forest cover in Ireland to meet climate change targets. In the context of this issue, I can outline the role of the Ireland Strategic Investment Fund (ISIF). ISIF's statutory mandate is what it refers to as a “double bottom line” mandate of investing for a commercial return and investing to support economic activity and employment in Ireland. ISIF has disclosed that it is investing €25m in the referenced project. It is anticipated that this will form part of a wider €200m fund, which will acquire land from farmers and private landowners who wish to sell to the fund at market rates. ISIF has also informed me that its investment is part of both its Food & Agriculture and wider €1bn climate action investment programme, complementing its existing investments in forestry, renewable energy, energy efficiency and energy storage, and generating further progress in Ireland’s transition to a Net Zero economy. ISIF complies with all applicable laws including tax law. The tax treatment of the Fund is set out at note 6 on page 189 of the NTMA’s 2021 Annual Report, which is published on www.ntma.ie.
147. Deputy Colm Burke asked the Minister for Finance if consideration will be given to increasing the rebate available under the temporary business energy support scheme up to €10,000 per month or 80% of the eligible cost; and if he will make a statement on the matter. [2764/23]
View answerDetails of the Temporary Business Energy Support Scheme (TBESS) are set out in Finance Act 2022. The scheme provides support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 28 February 2023. The TBESS is available to tax compliant businesses carrying on a trade or profession, the profits of which, are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria. The scheme operates on a self-assessment basis.
Once eligibility criteria are met, the support for businesses will be calculated on the basis of 40 percent of the increase in the bill amount. A monthly cap of €10,000 per trade or profession applies. However, where the trade or profession of a qualifying business operates across more than one location the business will be eligible for an increased cap of €10,000 per MPRN, which is available as regards both electricity and natural gas costs, up to a maximum amount of €30,000 per claim period.
The Government and I recognise that we cannot fully mitigate the increase in energy prices incurred by businesses and the percentage payment and monthly cap reflect this. The cap has been put in place in order to target the support at SMEs which are the backbone of the Irish economy.
In recognition of the fluctuating nature of the energy price market, the legislation does contain a provision allowing me, following consultation with the Minister for Enterprise Trade and Employment, the Minister for the Environment, Climate and Communications, and the Minister for Public Expenditure and Reform, to increase or decrease the €10,000 and €30,000 monthly caps by Ministerial Order, where it is considered necessary to ensure that the scheme is meeting its objectives.
The TBESS is currently due to expire at the end of February and, in that context, in the coming weeks I will examine the operation of the scheme, including the monthly caps.
148. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which efforts continue to be made to address inflation; the extent of the results to date; and if he will make a statement on the matter. [3049/23]
View answerConsumer price (HICP) inflation picked up sharply over the past year, with annual average inflation of just over 8 per cent recorded in 2022, compared with around ½ per cent over the past decade. Every advanced economy is in the same position, with the euro area inflation averaging 8.4 per cent last year.
While inflation remained elevated at 8.2 per cent in December, this marked a decline from the peak of 9.6 per cent reached last summer, and 9.4 as recently as October. This faster than anticipated easing of the inflation rate is explained largely by movements in wholesale energy prices, with wholesale oil and gas prices declining in recent months. This easing in wholesale energy markets suggests that inflation has now peaked and is on a downward trajectory. That said, the inflation rate is expected to remain high over the coming months, with a more pronounced easing of the inflation rate anticipated from the second quarter of this year as ‘base effects’ drop out of the annual rate. However, due to continued energy supply concerns there remains significant uncertainty around the outlook.
The Government is acutely aware of the impact of rising prices on households and firms. That is why Budget 2023 focused on mitigating inflationary pressures. Budget 2023 includes an overall package of €6.9 billion, including adjustments to income tax bands and increases in social welfare and pension rates. Complementing this is a set of one-off measures amounting to €4.1 billion, including three €200 electricity credits to each household, an additional social welfare payment, a double payment of child benefit, the extension of the reduction in excise duties and the VAT rate on gas and electricity to end-February and the Temporary Business Energy Support Scheme. This approach balances the need to provide necessary fiscal support to households and firms while avoiding a situation in which the Government’s response becomes part of the inflation problem.
Looking ahead, my Department will continue to monitor inflationary developments and will publish updated inflation projections in the Stability Programme Update in April. No decision has been made on whether the measures currently in place will be allowed to expire or whether new measures will be introduced. It would be premature to make a decision on further interventions before the prospects for inflation, developments in the public finances and the effectiveness of current measures can be fully evaluated.
149. Deputy Brian Leddin asked the Minister for Finance the progress of the European Investment Bank-supported low-cost loan guarantee scheme for the national retrofit programme; and if he will make a statement on the matter. [3141/23]
View answerThe Government announced the creation of a Residential Retrofit Loan Guarantee Scheme in February 2022. The proposed scheme has a capacity of €500m. The proposed scheme is to be part-funded by the Department of Environment, Climate and Communications and the EU Recovery and Resilience Facility under Ireland’s National Recovery and Resilience Plan, and backed by a counter guarantee provided by the European Investment Bank Group.
Officials from the Department of Environment, Climate and Communications, the Department of Finance and the Strategic Banking Corporation of Ireland (SBCI) are engaging with the EIB Group on the guarantee structure. There has been extensive due diligence between the EIB Group and the Irish banking and credit union sector. The SBCI has completed two open calls for expressions of interest to participate in the scheme. A number of banks and credit unions have submitted formal expressions of interest to participate in the scheme as on-lenders.
Officials from my Department continue to work closely with DECC, the SBCI and the EIB Group to progress the scheme.
152. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to reduce the cost of insurance for the hospitality sector. [3063/23]
View answerAt the outset, it is important to note that neither I, nor the Central Bank of Ireland have any influence over the pricing or provision of insurance products, as this is a commercial matter. This position is reinforced by the EU legislative framework for insurance (the Solvency II Directive).
Notwithstanding this, Government is acutely aware of the concerns felt by many sectors, including the hospitality one as highlighted by the Deputy, regarding the cost and availability of insurance. Accordingly, significant reform has been prioritised, with the multi-faceted Action Plan for Insurance Reform setting out 66 actions which aim to bring down costs for consumers and business; encourage market competition; prevent fraud and reduce the burden that insurance costs can have on business, community and voluntary organisations. Ninety per cent of the actions contained therein are now being delivered or have been initiated, and work is continuing to complete the remainder. Of particular relevance to the hospitality sector is the upcoming reform to the Duty of Care legislation, which is being led by the Department of Justice. This will address issues of “slips, trips and falls” so prevalent in high-footfall and public-facing activities. It also has the potential to bring extra capacity to the insurance market.
We can already see that the insurance market is responding to the emerging success of the Government reform agenda, with insurers now willing to write business in areas that they had previously avoided. Certain recreational sectors, such as equestrian activities and inflatables hire, can now access insurance through the formation of group schemes. Department officials continue to engage with insurance stakeholders to understand market gaps, and it is Government’s expectation that any savings achieved as a result of the reform agenda will be passed on in the form of reduced premiums. It should also be noted that the Exchequer has provided significant fiscal supports for businesses, including in the hospitality sector.
Finally, I would like to take this opportunity to assure the Deputy that securing a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government. In this regard, it is my intention to continue to work with my Government colleagues to ensure that implementation of the Action Plan can have a positive impact on the affordability and availability of insurance for individuals, businesses, community and voluntary groups across Ireland.
153. Deputy Neasa Hourigan asked the Minister for Finance his plans to bring forward legislation to address tax avoidance where it may not be possible to address arrangements within the existing code; and if he will make a statement on the matter. [2981/23]
View answerSignificant work has been, and continues to be, done to ensure the Irish tax code is in line with new and emerging international tax standards.
The January 2021 update to Ireland’s Corporation Tax Roadmap highlights the actions that have been taken and will continue to be taken in the process of corporation tax reform, adding to the significant level of reforms Ireland had already undertaken.
In this regard, legislation has been enacted by the Oireachtas in recent Finance Acts in respect of:
- defensive measures against listed jurisdictions through enhanced Controlled Foreign Company Rules,
- the application of the Authorised OECD Approach for the attribution of profits to branches
- updated transfer pricing rules, and
- mandatory disclosure rules.
Following the signing into law of Finance Act 2021, Ireland has now completed transposition of the EU Anti-Tax Avoidance Directives (ATADs), as follows:
- A new Exit Tax and Controlled Foreign Company rules were introduced in Finance Act 2018, and our General Anti-Abuse Rule already met the required standard.
- Anti-Hybrid rules were introduced in Finance Act 2019. and
- Anti-Reverse Hybrid rules and an Interest Limitation Ratio were introduced in Finance Act 2021.
As set out in the update to the Corporation Tax Roadmap, there are commitments to introduce a series of measures to further reform our corporate tax code including possible actions in respect of outbound payments from Ireland. A public consultation has been completed regarding the potential introduction of measures to apply to such payments, including to jurisdictions on the EU list of non-cooperative jurisdictions for tax purposes and no or zero tax regimes.
In October 2021, Ireland was among almost 140 jurisdictions that agreed, through the OECD/G20 Inclusive Framework on BEPS, a two-pillar solution to address tax challenges arising from the digitalisation of the economy.
- Pillar One will see a reallocation of a portion of taxing rights on profits of large multinational corporations to market jurisdictions, i.e., countries where the end-consumers and users of products and services are based. It applies to multinational groups with turnover in excess of €20 billion annually and profitability greater than 10%. The threshold will be reduced to €10 billion after 7 years.
- Pillar Two will see the adoption of a new global minimum effective tax rate of 15% applying to multinational groups with global revenues in excess of €750 million.
Pillar One will be implemented through an international agreement known as a Multilateral Convention (MLC). Work on the detailed provisions of the MLC to implement Amount A of Pillar One and its Explanatory Statement is ongoing at an international level.
Council Directive (EU) 2022/2523 will give effect to Pillar Two across all of the EU, including Ireland. The Directive was agreed in December 2022 and requires implementation by 31 December 2023. Legislation will be brought forward to transpose the Directive in Finance Bill 2023.
Work is continuing at the OECD on finalising the two-pillar solution. Officials from the Department of Finance and Revenue are actively engaged in all aspects of that work.
It should also be recognised that Ireland has a longstanding General Anti-Avoidance Rule, which goes beyond the standard required in the EU Anti-Tax Avoidance Directives and serves as a deterrent for tax avoidance behaviour. Taxpayer behaviour is continuously monitored by Revenue and if, as part of a compliance review, possible non-compliance with relevant legislation is identified, Revenue undertakes appropriate compliance interventions. In addition, should any deficiencies in the legislative provisions be identified, they will be brought to the attention of my Department.
Revenue is strongly committed to identifying and challenging tax avoidance, including schemes that would seek to rely on Ireland’s Double Taxation Agreements such as the exploitation of a mismatch of Irish and Maltese rules in relation to company residence and domicile, which could have led to income falling out of charge in Ireland and in Malta, resulting in double non-taxation of the income concerned. In November 2018, Ireland entered into a Competent Authority Agreement (CAA) with Malta under the Ireland-Malta Double Taxation Convention to deter these arrangements. As a result, section 23A(2) of the Taxes Consolidation Act 1997, which can result in a company incorporated in Ireland being regarded as not tax-resident in Ireland, will not apply to an Irish-incorporated but Malta-managed company in the circumstances outlined in the CAA. Accordingly, under section 23A of the Taxes Consolidation Act 1997, such an Irish-incorporated company will be resident in Ireland and the relevant payments to it will come within the charge to Irish corporation tax.
As regards this type of arrangement, or any other aggressive tax planning, I will not hesitate to propose legislation to address tax avoidance, where it may not be possible to address arrangements within the existing code.
154. Deputy Fergus O'Dowd asked the Minister for Finance his views on the possible easing of VAT rates for retrofitting works or renewable energy works for domestic purposes, to assist homeowners in reducing reliance on energy providers in a crippling energy crisis; and if he will make a statement on the matter. [2996/23]
View answerThe 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.
Building materials are not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT or an exemption to be applied, and so they are liable to VAT at the standard rate. By way of special derogation from the general rule though, Ireland is permitted to continue its long-standing practice of applying a reduced rate, currently 13.5%, to the supply of ready-to-pour concrete and certain concrete blocks but there are strict restrictions on this derogation, including that the rate cannot be reduced below 12%.
Under the EU VAT Directive the supply of construction and retrofitting services is liable to VAT at the standard rate generally across the EU but Ireland applies a 13.5% reduced rate of VAT to all construction services under a derogation from the EU VAT Directive, again subject to strict restrictions.
Construction services that consist of the “renovation and repairing of private dwellings, excluding material which account for a significant part of the value of the service supplied” can benefit from the reduced rate of VAT, currently 13.5%. This means that where a building contractor carries out home improvements and the material cost does not exceed two-thirds of the costs of the improvements then the reduced rate of 13.5% applies to the total construction service. A consequences of this is that a VAT registered building contractor will generally be entitled to recover VAT at the standard rate on most building materials purchased while the contractor is only liable to change VAT at the 13.5% reduced rate on the total supply (including the materials and labour elements of the job) to the homeowner. The difference in rates between the 23% input VAT and the 13.5% output VAT should normally be reflected in the VAT inclusive costs to the homeowner.
Following amendments to Annex III of the VAT Directive, agreed in April 2022, it now includes a category for "the supply and installation of solar panels on and adjacent to private dwellings, housing and public and other buildings used for activities in the public interest." Outside of the above category in Annex III, the supply of solar equipment, is liable to VAT at the standard rate, currently 23%.
It was decided not to make any change to this rate because of the fact that when solar panels are supplied as part of a “supply and install” contract, they may be subject to VAT at the reduced rate of 13.5%.
155. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of extending the reduced rates applicable to petrol and diesel until the end of June 2023; his plans regarding rates of excise in the context of the cost-of-living crisis; and if he will make a statement on the matter. [3148/23]
View answerI am advised by Revenue that the estimated total cost of extending the reduced rates of Mineral Oil Tax (MOT) applicable to petrol and diesel until the end of June 2023 is €240.5 million.
The breakdown of costs is shown in the following table.
|
Fuel Type |
MOT €m |
VAT €m |
Total €m |
|
Petrol |
54.4 |
12.5 |
67.0 |
|
Diesel |
161.6 |
11.9 |
173.5 |
These estimates are based on recent consumption data and do not account for any behavioural change.
As per the 2022 Finance Act these reduced rates are set to expire on 28th February 2023. In making any decision the Government will balance the costs of the measures in question against their impact.
156. Deputy Mairéad Farrell asked the Minister for Finance to provide an update on the review of section 110 of the Taxes Consolidation Act 1997 regime; and if he will make a statement on the matter. [2822/23]
View answerThe Commission on Taxation and Welfare considered how the overall balance of taxation might shift in order to sustainably fund public services over the longer-term. It published its report in September 2022.
The Commission published a number of recommendations on the taxation of investment products and on the Real Estate Investment Trust (REIT), Irish Real Estate Funds (IREF) and section 110 tax regimes. That is why, in his Budget speech, my predecessor announced the intention to commence a review of these areas.
Specific detail on the parameters of such a review and timelines are still being worked out and once a thorough consideration of the matter takes place, I will share the terms of reference in due course.
158. Deputy Cormac Devlin asked the Minister for Finance the number of persons impacted by income tax changes brought in on 1 January 2023; and if he will make a statement on the matter. [3081/23]
View answerAs the Deputy will be aware, Budget 2023 included a significant income tax package amounting to a cost of €1.13 billion in 2023 and consisted of both personal income tax and Universal Social Charge (USC) changes.
In relation to the income tax changes, the Standard Rate Cut-Off Point for single persons was increased by €3,200 or 8.7 per cent from €36,800 to €40,000, with commensurate increases for persons who are married/in civil partnerships. In addition, the main tax credits – the personal tax credit, employee tax credit and earned income credit - were all increased by just over 4.4 per cent or €75 each from €1,700 to €1,775. The home carer tax credit was also increased by €100 from €1,600 to €1,700 which equates to a 6.3 per cent increase. Overall, it is expected that 2.1m taxpayers (64 per cent of all taxpayer units) will benefit from Budget 2023 income tax package measures, with the balance of taxpayers generally exempt from income tax or their income tax liability being offset by their tax credits.
It is also important to point out that the income tax changes were carefully designed to ensure that workers do not find themselves in a position where they pay more income tax solely as a result of wage growth inflation in 2023. For example, due to the Budget changes, it is estimated that 44,400 taxpayer units will remain outside the income tax net and 98,800 taxpayer units will be removed from the higher rate of income tax.
Turning to the USC, the ceiling of the band for the 2 per cent rate was also increased by €1,625 from €21,295 to €22,920. This will ensure that a full-time worker on the minimum wage, who benefited from the increase in the hourly minimum wage rate from €10.50 to €11.30, will remain outside the top rates of USC. It is estimated that this change will benefit around 1.6m taxpayers. It is also worth pointing out that the USC concession for medical card holders who earn less than €60,000 per annum was extended for a further year, which means such individuals will continue to pay a reduced rate of USC in 2023. It is tentatively estimated that this measure will benefit around 120,000 taxpayer units.
Further details of the Budget 2023 tax measures can be located at the following link:
www.gov.ie/en/publication/ccc22-budget-2023-taxation-measures/
159. Deputy Pádraig O'Sullivan asked the Minister for Finance if the temporary business energy support scheme will be reviewed; the amount of the €1.25 billion allocated that has been claimed to date; if his attention has been drawn to reports the SME sector is really struggling (details supplied); and if he will make a statement on the matter. [3022/23]
View answerThe Temporary Business Energy Support Scheme (TBESS) is a broad-based measure designed to assist businesses that have experienced a significant increase in their natural gas and electricity costs. The scheme operates by comparing the average unit price for the relevant bill period with the average unit price in the corresponding reference period in the previous year. If the increase in average unit price is more than 50% then the threshold has passed, and the business is eligible for support under the scheme. Support is based on 40% of the amount of the increase in eligible electricity or natural gas costs between the bill amount which is the subject of the claim and the bill amount in the corresponding reference period in the previous year. TBESS is a significant intervention designed to help business with increasing energy costs. The Government has recognised that it cannot fully mitigate the increase in energy prices incurred by businesses carrying out a trade or profession. The cap has been put in place in order to target the support at SMEs which are the backbone of the Irish economy.
Revenue publishes statistics weekly regarding the numbers registering for and claiming under the scheme. As of 18 January 12,357, businesses had registered for the scheme, of which 6,727 have commenced the claims process and 4,861 have submitted completed claims - some for more than one month or claim period. 5,793 claims have been approved with a value of €12.38m of which €10.99m has been paid out.
The scheme is currently due to expire at the end of February and, in that context, in the coming weeks I will examine the operation of the scheme.
160. Deputy Jackie Cahill asked the Minister for Finance his estimation of the value to farmers of current tax reliefs specifically in place for them; and if he will make a statement on the matter. [3048/23]
View answerI wish to advise the Deputy that it has not been possible to collate the information sought in the time available and, therefore, I will make arrangements to provide a response in line with the timeframe for deferred replies as set out in Dáil Éireann Standing Order Number 51.
162. Deputy Brian Leddin asked the Minister for Finance if the potential for establishing Ireland as an international financing centre for renewable energy projects, akin to that in the aviation sector, has been examined; and if he will make a statement on the matter. [3142/23]
View answerIn order to meet the targets and objectives of the Climate Action Plan 2023, the private sector is being guided towards financing the necessary investments within their own activities and through the supply chains they influence.
The financial services sector has a pivotal role in facilitating such activities and accelerating the implementation of Ireland’s Climate Action Plans and transition to net zero. For years, Ireland has prioritised developing our sustainable finance sector, as part of our international financial services strategy, Ireland for Finance, and in our engagement at EU level.
At EU level, Ireland works to ensure the regulatory framework for sustainable finance is ambitious and transparent while remaining usable for companies. Ireland provided input to the European Commission as it developed its 2021 Strategy for financing the transition to a sustainable economy. We engage continuously with our European partners on the legislative proposals and other actions.
At national level, in 2019, the Ireland for Finance strategy developed by my Department set out sustainable finance as a horizontal priority, and the 2022 update develops on that prioritisation, making sustainable finance the first theme. Successive Ireland for Finance Action Plans have set out targeted measures aimed at developing the sector, as has 2021’s Sustainable Finance Roadmap. In addition to fostering a regulatory framework that enables a high quality and transparent sustainable finance sector, these measures seek to improve industry readiness and build skills in order for firms to be able to expand their sustainable investments while complying with EU requirements.
My Department’s actions at EU level and domestically aim to support a well-functioning, well-equipped and well-regulated sustainable finance sector. These actions are linked to Ireland’s overarching climate action targets and in particular the Climate Action Plan 2023. This sets out how Ireland can accelerate the actions that are required to respond to the climate crisis, putting climate solutions at the centre of Ireland’s social and economic development. The plan implements the carbon budgets and sectoral emissions ceilings and sets out a roadmap for taking decisive action to more than halve our emissions by 2030 and reach net zero no later than 2050.
The types of investments set out in the climate action plan should guide the private sector towards financing the necessary investments to decarbonise and electrify every sector. These include, for example, renewable energy, public transport and electric vehicles, home renovations, forestry and food systems.
Specifically with regard to renewable energy, wind and solar energy will play a critical role in this accelerated transition, with onshore wind continuing to be one of the leading cost-effective technologies to achieve our renewable electricity and greenhouse gas emission reduction targets, as well as displacing emissions in other sectors, including household heating and vehicle transport. The delivery of additional onshore renewable electricity generation will be key to successfully meeting the ambitious targets outlined in the European Green Deal and Ireland’s Climate Action Plan 2023 as well as to protecting against security of supply risks.
In addition, as set out in CAP23, Government has agreed to increase our ambition in solar up to 5GW, and in offshore wind energy to 5GW, with an additional 2GW earmarked for green hydrogen production by 2030 and a long-term plan to take advantage of a potential of at least 30GW of floating wind thereafter.
163. Deputy James O'Connor asked the Minister for Finance the steps that will be taken to ensure greater awareness of eligibility for the recently introduced rent tax credit; if he is satisfied the application process is accessible for people who are entitled to the credit; and if he will make a statement on the matter. [3080/23]
View answerThe rent tax credit was introduced by Finance Act 2022 and will be available in respect of qualifying payments made during the 2022 to 2025 years of assessment inclusive.
I am advised by Revenue that a comprehensive manual on the rent tax credit was published by Revenue in December 2022. This guidance sets out the full range of conditions which must be met in order for the credit to be claimed and includes a number of helpful examples. The guidance also contains step-by-step details on how to claim the credit for 2022, being the first year the credit is available. This information can be found in Tax and Duty Manual Part 15-01-11A at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11A.pdf
Information on the rent tax credit is also prominently displayed on the homepage of the Revenue website under the heading ‘Popular Topics’ and the relevant link provides potential claimants with detailed information on how to claim the tax credit.
Revenue has engaged with the Residential Tenancy Board (RTB) and the Department of Housing, Local Government and Heritage to ensure that information on eligibility for the credit is widely available and understood.
I am further advised by Revenue that it issued a statement yesterday highlighting the end of year process for PAYE taxpayers and published a statistical report on 2022 PAYE Preliminary End of Year Statements and Income Tax returns which is available on the Revenue website and can be accessed at:
- Statistical report: revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/peoys.aspx;
- Press statement: www.revenue.ie/en/corporate/press-office/press-releases/index.aspx.
The statement highlights the changes introduced in Budget 2023 particularly in relation to the new rent tax credit and can also be viewed at the link below. To date in 2023, approximately 78,400 claims for rent tax credit for 2022 have been made.
On the basis of the Revenue advice that I have received, I am satisfied that the steps taken to-date are appropriate in terms of ensuring that adequate information on the eligibility criteria attached to the rent tax credit has been made available and that the claim process is accessible for all potential claimants.
The operation of the rent tax credit will continue to be monitored closely by my Department in conjunction with Revenue in the coming months.
