Dáil Éireann Debate, Tuesday - 27 June 2023
193. Deputy Neasa Hourigan asked the Minister for Finance when legislation will be brought forward to remove the anomaly whereby a registered charity employing general practitioners such as one (details supplied) is not exempt from professional services withholding tax; and if he will make a statement on the matter. [30585/23]
View answerProfessional Services Withholding Tax (PSWT) is a deduction at the standard rate of income tax, currently 20%, from relevant payments made by accountable persons to specified persons in respect of certain professional services. The tax deducted is a payment on account against the specified person’s final Income Tax or Corporation Tax liability for the year, with the amount of PSWT deducted credited against the tax liability for that year. A specified person can include businesses undertaken through a company, sole trade or partnership.
Accountable persons include Government Departments, State agencies and bodies, local authorities, colleges and authorised medical insurers.
The range of professional services that come within the scope of PSWT is extensive and includes services of a medical, dental, pharmaceutical, optical, aural or veterinary nature.
A charity which is registered with the Charities Regulator can apply to Revenue for the charitable tax exemption provided for in section 207 of the Taxes Consolidation Act 1997. Where a body is granted the charitable exemption status by Revenue, payments to it by an accountable person are not subject to PSWT.
I am advised by the Department of Health that General Practitioners are private contractors, most of whom hold GMS contracts with the HSE for the provision of services without charge to medical card and GP visit card holders. GMS contracts are held by individual GP’s and payment for the related services is made by the HSE Primary Care Reimbursement Service to the GP concerned.
The legislation governing PSWT provides that a specified person may in certain circumstances make a claim for a refund of PSWT in the same tax year in which it is deducted (referred to an “interim refund”). Among the requirements for the making of an interim refund claim is the requirement that the specified person’s profits for the previous period have been finalised and that the tax due for that period has been paid.
Therefore, the PSWT is deducted from the payments to the individual GP and is refundable through the individual tax return of each doctor. The ‘anomaly’ as referred to by the Deputy does not arise from the operation of PSWT in relation to a registered charity rather it is a consequence of the GP GMS contract.
My Department and Revenue are aware of the issues arising for certain taxpayers regarding refunds of PSWT, where those refunds arise on foot of payments made by the HSE under GMS contracts. Discussions have taken place between officials from Revenue, the Department of Finance and the Department of Health on this matter. Revenue are working to clarify the issues and hope to soon be in a position to issue guidance on this matter.
Finally, the Deputy may also wish to note that the Minister for Health recently published the Terms of Reference for a Strategic review of General Practice which will be completed this year. The review, with input from key stakeholders, will examine the broad range of issues affecting general practice.
