Monday, 11 Sep 2023

Written Answers Nos. 417-437

Departmental Contracts

Questions (418)

Violet-Anne Wynne

Question:

418. Deputy Violet-Anne Wynne asked the Minister for Transport the tender process that took place resulting in a contract (details supplied); and if he will make a statement on the matter. [39353/23]

Written answers

Minister of State at the Department of Transport (Deputy Jack Chambers)

On 27 July 2021, the Government approved the Detailed Appraisal and Business Case for the next Coast Guard Aviation Service and agreed to proceed to the Planning/Design stage, including the procurement of the service outlined in the business case. The Government decision ensured that a broad range of services, including Maritime and Inland Search and Rescue, day and night Air Ambulance services to the island communities, Helicopter Emergency Medical Service, inter hospital transfers, environmental monitoring and other supports to the Principal Response Agencies will continue to be delivered to the highest standards. 

The approved procurement process was a “Competitive Procedure with Negotiations” as defined under the EU (Award of Public Authority Contracts) Regulation 2016 (SI 284/2016). The process was also  conducted in line with the Government’s Public Spending Code and best practice project management guidelines.

A dedicated project team within the Department of Transport implemented the procurement project, with external technical support in the fields of Aviation/SAR, Finance and Project Management. The Chief State Solicitor's Office provided legal advice to the Department and an independent external process auditor was engaged to provide regular assurance to the Accounting Officer as to the proper conduct of the process.

A Project Board structure was also established in March 2022 to provide governance and oversight of the procurement process. 

Following completion of the procurement process the Government approved the award of contract to Bristow Ireland Limited on 30 May 2023.

The awarding of the contract is currently being challenged through the Courts by the incumbent contractor.

National Car Test

Questions (419)

Violet-Anne Wynne

Question:

419. Deputy Violet-Anne Wynne asked the Minister for Transport his view on the NCT service proposal to go cashless; and if he will make a statement on the matter. [39359/23]

Written answers

Minister of State at the Department of Transport (Deputy Jack Chambers)

I am aware of a proposal by the NCT operator to introduce a cashless service at NCT centres around the country. My Department has advised the RSA that alternative payment options for NCT appointments must be made available, to ensure that all motorists, including those without access to electronic or card payment systems, can continue to pay for the service.

The RSA is currently in discussion with the NCT operator about payment systems. Any change to payment methods must be agreed with the RSA and as above, the Department will require that the NCT service will be able to be paid for using cash, within the terms of the contract in place. Payments will not be restricted to credit card or electronic payments. The Department will require that a cash pre- payment option may be used to pay for the NCT service if it moves to a pre-payment system.

The RSA has committed to keeping my Department informed of developments on this issue, as a matter of priority.

The operation of the National Car Testing Service (NCTS) is the statutory responsibility of the Road Safety Authority (RSA). I have referred the Deputy's queries to the Authority for direct reply. I would ask the Deputy to contact my office if a response has not been received within ten days.

A referred reply was forwarded to the Deputy under Standing Order 51

Motor Industry

Questions (420)

Eoin Ó Broin

Question:

420. Deputy Eoin Ó Broin asked the Minister for Finance the number of cars sold with an open market selling price above €60,000, €80,000, €100,000, €120,000 and €140,000, for the years 2021 and 2022 and to date in 2023, in tabular form. [37175/23]

Written answers

Minister for Finance

I am advised by Revenue that the number of category A vehicles registered for Vehicle Registration Tax (VRT) with an open market selling price (OMSP) across each of the price ranges requested since 2021 to 31 July 2023 are provided in the table below. “Category A” includes cars and minibuses with a passenger capacity of not more than 8 persons.

OMSP range €	2021	2022	2023*
60,000 - 79,999	3,166	5,440	5,603
80,000 - 99,999	1,810	2,235	2,075
100,000 - 119,999	491	623	954
120,000 - 139,999	213	259	405
140,000 +	146	230	307

*1 January to 31 July 2023

Primary Medical Certificates

Questions (421)

Eoin Ó Broin

Question:

421. Deputy Eoin Ó Broin asked the Minister for Finance for an update on the review of the regulations underpinning the primary medical certificate scheme arising from the Supreme Court challenge to the conflict between the regulations and primary legislation; what changes he intends to make to the rules governing the scheme; and when these changes will be made. [37192/23]

Written answers

Minister for Finance

The Disabled Drivers & Disabled Passengers Scheme (DDS) provides relief from VRT and VAT on the use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.

The Scheme is open to severely and permanently disabled persons who also meet one of six specified medical criteria, as a driver or as a passenger and also to certain organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant.

The current medical criteria were included in the Finance Act 2020, by way of amendment to Section 92 of the Finance Act 1989. This amendment arises from legal advice in light of the June 2020 Supreme Court judgement.

The National Disability Inclusion Strategy Transport Working Group (TWG), comprising members from a range of Departments, agencies and Disabled Persons Organisations, was tasked under Action 104 to review all Government-funded transport and mobility supports for those with a disability, including the Disabled Drivers and Disabled Passengers Scheme (DDS).

The NDIS Transport Working Group's final report published in February 2023, endorsed proposals for a modern vehicle adaptation scheme in line with international best practice that would replace the DDS, as it was no longer fit-for-purpose on any and all aspects.    

As the Deputy will appreciate, access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Officials from relevant Departments and agencies are meeting to discuss the issues arising  from this report and  to map a way forward. My officials are proactively engaging with this work as an important step in considering ways to replace the DDS.

Finally, the Deputy should note that the Government is committed to providing services for people with disabilities which will empower them to live their lives, provide greater independence in accessing the services they choose and enhance their ability to tailor the supports required to meet their needs and plan their lives.

Tax Code

Questions (422, 423, 424, 439)

John Lahart

Question:

422. Deputy John Lahart asked the Minister for Finance his plans to amend inheritance tax in Budget 2024; and if he will make a statement on the matter. [37201/23]

John Lahart

Question:

423. Deputy John Lahart asked the Minister for Finance if he will consider the concept of a 'notional spouse' for single persons with respect to capital acquisitions tax; and if he will make a statement on the matter. [37202/23]

John Lahart

Question:

424. Deputy John Lahart asked the Minister for Finance the changes he will make to inheritance tax in Budget 2024 with respect to single persons; and if he will make a statement on the matter. [37203/23]

John Lahart

Question:

439. Deputy John Lahart asked the Minister for Finance if he is considering the treatment of family members such as sisters, brothers, nieces and nephews as a notional spouse, in order to decrease the amount of inheritance tax paid by relatives of persons who do not have children or a spouse to pass property onto; and if he will make a statement on the matter. [37672/23]

Written answers

Minister for Finance

I propose to take Questions Nos. 422, 423, 424 and 439 together.

As you may be aware, for the purposes of Capital Acquisitions Tax (CAT), the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary) determines the maximum life-time tax-free threshold. This is known as the “Group threshold” below which gift or inheritance tax does not arise and relates to the allowance referred to in your correspondence. Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at the 33% rate applies on the excess over the tax free threshold.

The Group A threshold (currently €335,000) applies where the beneficiary is a child of the person giving it. The Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer. The Group C threshold (currently €16,250) applies in all other cases.

While a single person may have no natural children, any stepchildren, adopted children or certain foster children can avail of the Group A threshold in respect of gifts and inheritances received from that disponer.

In addition, nieces or nephews of that disponer may qualify for favourite niece or favourite nephew relief in respect of gifts or inheritances of business assets. The relief allows a niece or nephew who qualifies for the relief to avail of the Group A threshold. Qualifying nieces or nephews are those who have worked substantially on a full-time basis for a period of five years prior to the gift or inheritance being given in carrying on, or assisting in the carrying on, the trade, business or profession, of the disponer.

For the nephew or niece to be deemed to be working substantially on a full-time basis in the business he or she must work:

* more than 24 hours per week at the place where the business, trade or profession is carried on; or

* more than 15 hours per week at the place where the business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer and the nephew or niece.

Furthermore, it is worth noting that there is an exemption from CAT where dwelling houses are bequeathed by individuals who live there to successors who:

* have lived there for a specified period of time before the inheritance,

* will continue to live there for a specified period of time after the inheritance, and

* who have no beneficial interest in any other residential property at the date of the inheritance.

The policy rationale behind the dwelling house exemption is to protect the family home by ensuring that a beneficiary who has been living with the disponer, and will continue to reside there after the inheritance, does not have to sell that family home to pay a CAT liability and thus will continue to have somewhere to live. It is not necessary for the beneficiary of an inheritance under the dwelling house exemption to be a child or relative of the disponer.

In relation to the Deputy’s reference to a "notional spouse" concept, it is important to note that differences in the tax treatment of the different categories of individuals and couples arise from the objective of dealing with different circumstances. Under the law, couples who have obtained legal recognition of their relationship status through marriage or civil partnership are not in an analogous situation to others who are unmarried or single, which is why they are not accorded similar tax treatment to couples who have a civil status that is recognised in law. Any change in the tax treatment of individuals or couples, including in the manner as suggested in the "notional spouse" concept, can only be addressed in the broader context of future social and legal policy development.

Regarding inheritance tax changes, is important to note that there would be a significant cost in making substantial changes to the CAT thresholds and/or rate of CAT. Recent Revenue estimates put the full cost of increasing the CAT Group A threshold from its current €335,000 to €400,000, for example, at approximately €52 million. The estimated cost of increasing the Group B threshold from its current €32,500 to €35,000 would be €9 million, while the cost of increasing the Group C threshold from €16,250 to €19,000 is estimated be €4 million. Revenue estimates also indicate that reducing the rate of CAT by 1%, 3%, 5% or 10% would result in a corresponding reduction in yield for the exchequer of €20m, €61m, €102m or €205m respectively.

The options available for setting CAT thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.

Question No. 423 answered with Question No. 422.

Question No. 424 answered with Question No. 422.

Tax Code

Questions (425, 451)

Danny Healy-Rae

Question:

425. Deputy Danny Healy-Rae asked the Minister for Finance for an update on a matter (details supplied). [37231/23]

Seán Canney

Question:

451. Deputy Seán Canney asked the Minister for Finance when the appropriate amendment will be made to the Finance Act to exempt functional farmland from the residential zoned land tax. [38162/23]

Written answers

Minister for Finance

I propose to take Questions Nos. 425 and 451 together.

The Residential Zoned Land Tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing. The tax is an action contained in Housing for All, the Government’s plan for housing, to increase housing supply and is supported in the Programme for Government. 

The tax applies to land that is:

• zoned suitable for residential development whether it be solely or primarily for residential use, or for a mixture of uses, including residential use, and

• serviced (that is: reasonable to consider may have access, or be connected, to public infrastructure and facilities, including roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply, necessary for dwellings to be developed and with sufficient service capacity available for such development)

In order to be liable for the tax the land must meet both criteria above.

Each local authority in the State was responsible for the preparation of an RZLT map for their functional area. Each local authority, in preparing the draft RZLT maps, determined whether the zoned land is connected or able to connect to the six required categories of services. Any exclusions which would rule the land out of scope were applied.  The local authority then published a draft RZLT map identifying the land which meets the requirements of the legislation and which may be liable to the tax. The tax will first be due and payable in 2024.

It is important to note that, to come within the scope of RZLT, agricultural land must be both zoned for residential use and serviced. Farmland that is zoned for residential use, but which is not currently serviced, is not within the scope of the tax and will only come within the scope of the tax should the land become serviced at some point in the future.

Agricultural land which is zoned solely or primarily for residential use meets the criteria set out within the legislation and therefore falls within the scope of the tax. Agricultural land that is zoned for a mixture of uses including residential is not in scope. These zonings are considered to reflect the housing need set out within the core strategy for the relevant local authority area and landowners within such zonings may fall within the scope of the tax, in the interests of ensuring an appropriate supply of housing on zoned lands.

A landowner with land identified on any published draft map had the opportunity to make a submission to the relevant local authority regarding the land, setting out why they consider that the land does not meet the criteria for inclusion within the scope of the tax.  For example, if the land is not zoned for residential use, if the land does not have access to or there is no capacity for any of the six servicing criteria, or if the land benefits from an exclusion as outlined in the legislation.  Each local authority was required to assess any submission and inform the landowner of their decision to either remove or retain the land on the map by 1 April 2023.  If dissatisfied with the local authority decision, the landowner could have appealed the determination to An Bord Pleanála, again setting out why the land does not meet the criteria for inclusion for the tax. 

In addition to being able to make a submission regarding inclusion of land on a draft map, the landowner had the opportunity to submit a request to change the zoning of the land by variation of the adopted development plan.  Where the zoning is amended to a use other than residential or mixed use including residential, it would not meet the criteria for the tax and would be removed from RZLT maps.  Decisions on whether to amend zonings as a result of submissions or at any other time are a matter for each local authority, taking into account the need to ensure that housing supply targets across the county can be met. It is also worth noting that provision is made in the Planning and Development Act 2000 for elected members to seek a report from their Chief Executive on the matter of proposed re-zonings.

Furthermore, Finance Bill 2022 introduced an exemption for land that is within the scope of the tax but is subject to a contract that precludes the landowner from developing it. For the exemption to apply, the contract must have been entered into prior to 1 January 2022, i.e., prior to the introduction of RZLT. For example, where a farmer leased land prior to 1 January 2022 and the requisite conditions are met, the farmer may claim an exemption from the tax for the period of the lease.

It is acknowledged that the tax will impact on landowners, however if the land in question is zoned for a particular purpose under a plan adopted by the local authority and has been subject to investment by the local authority and the State in the services necessary to enable development for housing to accommodate increased population, it is intended that the land should be used for housing.  This tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations.

Officials from Department of Finance and Department of Housing, Local Government and Heritage continue to engage with various representative bodies, including those representing the agricultural sector, in relation to the RZLT measure.

Tax Code

Questions (426, 427, 473, 474)

Pauline Tully

Question:

426. Deputy Pauline Tully asked the Minister for Finance if a company that purchases pre-cast ready-mix cement for the manufacture of its pre-cast concrete products is exempt from the concrete levy; if so, the process by which the company it buys pre-cast cement from can remove this levy from the purchase price; if a rebate will be payable if a process is not in place where the levy is removed from the purchase price; and if he will make a statement on the matter. [37373/23]

Pauline Tully

Question:

427. Deputy Pauline Tully asked the Minister for Finance if a response will issue to a person (details supplied) in relation to whether they are exempt from the cement levy and how they can ensure they do not pay this levy if they are exempt; and if he will make a statement on the matter. [37374/23]

Carol Nolan

Question:

473. Deputy Carol Nolan asked the Minister for Finance to clarify the position of his Department with respect to the planned introduction of the defective concrete products levy from 1 September 2023; if it is the understanding of his Department that ready mixed concrete used as an ingredient to make precast concrete will fall within the scope of the levy; if he is aware that this would conflict with the position outlined by his predecessor, namely, that the levy would exclude precast products; and if he will make a statement on the matter. [38745/23]

Michael Healy-Rae

Question:

474. Deputy Michael Healy-Rae asked the Minister for Finance if pre-cast concrete products that are produced in Ireland will be levied; if not, if they will be made exempt (details supplied); and if he will make a statement on the matter. [38753/23]

Written answers

Minister for Finance

I propose to take Questions Nos. 426, 427, 473 and 474 together.

As the Deputies are aware, arising from a November 2021 Government decision that a levy be imposed on the construction sector to contribute towards the cost of the Mica Redress Scheme, the Defective Concrete Products Levy was announced as part of Budget 2023. 

The Defective Concrete Products Levy (“DCPL”) applies, at a rate of 5% of the market value of the concrete products within scope of the levy, at the point of first supply of those products in the State on or after 1 September 2023. The levy applies to both supplies within the State and into the State (from outside the State) to ensure fairness of application of the levy.

The following products come within the scope of the levy:

(a)    products, containing concrete, that are required to comply with the following EU Harmonised Standards (or adapted national version of such Harmonised Standard), as set out in Schedule 36 to the TCA 1997 -

• EN 771-3:2011+A1:2015 Specification for masonry units - Part 3: Aggregate concrete masonry units (Dense and lightweight aggregates), and

• EN 771-4:2011+A1:2015 Specification for masonry units - Part 4: Autoclaved aerated concrete masonry units, 

and

(b)   ready to pour concrete which is chargeable to Value Added Tax at the rate of 13.5% under paragraph 16(1) of Part 4 of Schedule 3 of the Value Added Tax Consolidation Act 2010.

Products, including pre-cast products, not falling within the above outlined EU Harmonised Standards are not within the scope of the levy and therefore the levy does not apply on supplies of such products.

Under the legislation giving effect to the DCPL, all supplies of ready to pour concrete are, from 1 September 2023, within the scope of the levy including where the concrete is utilised in the manufacture of pre-cast products. This is the case regardless of whether the supplier of the ready to pour concrete is in the State or the ready to pour concrete is sourced from outside the State. Where the supplier is in the State, it is the supplier who is the chargeable person for the purposes of the DCPL.  Where a person acquires ready to pour concrete from outside the State, and uses it in the course of a business in the State, that person is the chargeable person for the purposes of the DPCL.

While there are no exemptions from the levy provided in the legislation as enacted, I announced on Wednesday, 6 September my intention to bring forward legislation in Finance Bill 2023 to exclude the value of pouring concrete used in pre-cast products from the scope of the levy with effect from 1 January 2024. I intend to introduce a refund scheme for the interim period of 1 September 2023 to 31 December 2023. Details of the amendments will be published in Finance Bill 2023.

Further information on the DCPL, including the obligations of a chargeable person, is available on the Revenue website at: www.revenue.ie/en/self-assessment-and-self-employment/dcpl/index.aspx. My Department will also respond to all queries it has received directly regarding the DCPL.

Question No. 427 answered with Question No. 426.

Tax Code

Questions (428)

Francis Noel Duffy

Question:

428. Deputy Francis Noel Duffy asked the Minister for Finance if retrospective payments will be considered for households who have installed solar panels before 1 May when 0% VAT applies; and if he will make a statement on the matter. [37398/23]

Written answers

Minister for Finance

The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. From 1 May 2023, and in accordance with the Directive and Irish legislation, the supply and installation of solar panels on or adjacent to immovable property, being private dwellings, is subject to the zero rate of VAT. For the zero rate to apply, both the supply of the solar panels and their installation must be the responsibility of the same business in the same supply (i.e. a supply and install contract).

In accordance with EU and Irish VAT legislation, a VAT-registered trader is obliged to include VAT as part of the price for goods and services that the trader supplies. Goods or services which are supplied to unregistered persons or private individuals prior to the date of a change in a VAT rate are taxable at the VAT rate in force at the time when they are supplied. There is no provision in the Directive to permit individuals acting in their private capacity to reclaim VAT incurred on their purchases.

The zero rate of VAT for solar panels can only operate from 1 May 2023. I have no discretion to apply this measure on a retrospective basis.

Tax Code

Questions (429)

Patrick Costello

Question:

429. Deputy Patrick Costello asked the Minister for Finance the reason that alcohol-free beverages cost the same as their alcoholic counterparts given that no excise duty applies; if he will take appropriate steps to ensure that there is a price differential to encourage more persons to switch to alcohol-free drinks; and if he will make a statement on the matter. [37399/23]

Written answers

Minister for Finance

Alcoholic beverages are subject to alcohol products tax. For example, excise duty on beer is charged based on the percentage, by volume, of alcohol in the beverage. Typically, the excise duty on a pint of 4.3% ABV beer is 54 cent. Non-alcoholic beer is not liable for any excise duty. 

Alcoholic beverages are subject to the standard rate of VAT, currently 23%. Ireland currently operates two lower rates of VAT, 13.5% and 9%. At present, Ireland applies the 9% VAT rate to certain non-alcoholic beverages such as tea, coffee and fruit juices where they are supplied in the course of catering. As the Deputy will be aware, this will revert to 13.5% from 1 October 2023 in line with the rest of the hospitality and tourism sector.  

The retail price of non-alcoholic beers is determined by retailers and publicans and this should reflect the fact that no excise applies to such products as well as other factors. Other than the portion that is taxation, the Department has no role in setting the price of these beverages.

Tax Code

Questions (430)

Patrick Costello

Question:

430. Deputy Patrick Costello asked the Minister for Finance if he will reduce alcohol-free beverages VAT rate from 23% to 13.5% which is in line with the rate charged to other non-alcoholic beverages in the hospitality sector; and if he will make a statement on the matter. [37401/23]

Written answers

Minister for Finance

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 accordance with the Value-Added Consolidation Act, 2010 the supply of non-alcoholic drinks is generally liable to tax at the standard rate, currently 23%.

The VAT Directive obliges each Member State to have a standard rate of VAT and also allows that a Member State may choose to have up to two reduced rates of VAT which may be applied to certain goods and services i.e. any of those listed in Annex III of the Directive, which includes non-alcoholic beverages. Ireland currently operates two lower rates of VAT, 13.5% and 9%. At present, Ireland applies the 13.5% VAT rate to certain non-alcoholic beverages such as tea, coffee and fruit juices where they are supplied in the course of catering.

Restaurant services are liable to VAT at the reduced rate. However, supplies of alcohol, bottled waters, soft drinks, sports drinks and vegetable juices (excluding fruit juices) are liable to VAT at the standard rate even when provided as part of a restaurant service.

Any suggestion for extending the application of a reduced VAT rate further to non-alcoholic beverages would need to be considered carefully having regard to a range of factors including the impact on Exchequer revenues, and the practical concerns that it would be difficult to administer and would be likely to provide considerable scope for manipulation of the VAT system and opportunities for tax avoidance.

Banking Sector

Questions (431)

Fergus O'Dowd

Question:

431. Deputy Fergus O'Dowd asked the Minister for Finance if he will respond to serious concerns raised by a person (details supplied) in respect of the issues arising with a mortgage provider; if he will intervene to ensure this type of behaviour and lack of engagement ceases once and for all; and if he will make a statement on the matter. [37421/23]

Written answers

Minister for Finance

I would like to thank the Deputy for raising this matter, and I hope the issue can be quickly and satisfactorily resolved by the particular financial firm. 

All regulated entities are required to act with due skill, care and diligence in the best interests of their customers and if a person is not satisfied with the service provided by a regulated entity the person should, in the first instance, raise the matter directly with the regulated firm. 

From the details provided by the Deputy I note that has happened in this particular case.  If the person is not satisfied with the response from the regulated firm, the person can then refer the complaint to the Financial Services and Pensions Ombudsman (FSPO).  This is the independent statutory Office put in place by the Oireachtas to consider and as necessary adjudicate on complaints between regulated financial service providers and their customers.  As Minister I have no role in the investigation of complaints between a regulated entity and one of its customers.

While it does not have a role in the investigation of individual complaints, the Central Bank of Ireland is the regulator of regulated financial service providers and, in that context, it welcomes information received directly from customers and their representatives in relation to their experiences of financial services firms, including regulated mortgage entities. 

Therefore, I have asked the Bank to make contact with the Deputy on this particular matter.  Also any customer of a regulated financial services firm may directly raise a matter with the Central Bank at the following email address: [e-mail]. However, it should be noted that the Central Bank’s engagement with any individual or regulated entity will be governed by the confidentiality provisions as provided for in section 33AK of the Central Bank Act 1942 (as amended).

Tax Code

Questions (432)

Ivana Bacik

Question:

432. Deputy Ivana Bacik asked the Minister for Finance his views on the new requirements relating to non-resident landlord withholding tax; the rationale for placing the onus of managing the tax affairs of non-residential landlords on tenants, where no collection agent has been appointed; and if he will make a statement on the matter. [37433/23]

Written answers

Minister for Finance

The changes made in Finance Act 2022 to the obligations of tenants and collection agents of non-resident landlords are intended to reduce the administrative burden on both tenants and collection agents and to simplify the process to comply with their tax obligations.  I am advised by Revenue that it is also anticipated that the new system, which launched on 1 July 2023, should lead to better compliance and customer service in this area. The information provided as part of the new requirements will allow Revenue to identify the non-Irish resident landlord and correctly allocate a withholding tax payment to the relevant landlord. The information will also assist Revenue in pursuing any issue of non-compliance.

Tenants (and other parties such as local authorities) who make rental payments directly to non-resident landlords have been obliged for many years to deduct and remit to Revenue withholding tax at 20% from such payments.  Finance Act 2022 made minor amendments to this existing system.  Previously, such persons were required to remit the amount due to Revenue using a paper Form R185.  The changes introduced by Finance Act 2022 did not alter the requirement for such persons to deduct tax.

They do, however, change the method by which the tax deducted is remitted to Revenue.  They also require the provision of certain information regarding the landlord, the rental property, and the rental payment.  As part of this new system, instead of completing a paper Form R185, tenants of non-resident landlords will complete rental notifications (‘RNs’) and remit the tax deducted online using ROS or MyAccount, using the new “non-resident landlord withholding tax” (NLWT) system.

Under the new system, the relevant tenant must make a monthly rental notification which accounts for any rental payment that they owe to their non-resident landlord. To reduce the administrative burden on the tenant, the system provides a facility to set up a repeat rental notification at monthly intervals including an instruction for remitting the NLWT to Revenue directly from the tenant’s bank account. 

Although their tenant remits the tax to Revenue, the onus remains on the landlord to manage their own tax affairs, including the filing of an Irish income tax return. They are taxable on the rental profit arising from their Irish property; that is, their Irish rental income after deduction of allowable expenses, and the NLWT system incentivises them to file an income tax return so as to claim a credit against their Irish tax liability in respect of the relevant NLWT which was remitted to Revenue. They may also be entitled to a proportion of personal allowances, which can be used to further reduce their tax liability.

State Bodies

Questions (433)

Fergus O'Dowd

Question:

433. Deputy Fergus O'Dowd asked the Minister for Finance further to Parliamentary Question No. 297 of 25 July 2023, in respect of the NTMA, if he can seek clarity on the “Other” payment of €54,462 and confirm that this was paid as accrued holidays; if he can confirm that the NTMA does not provide a vehicle or any other transport benefits to the CEO as indicated in the return (details supplied); and if he will make a statement on the matter. [37447/23]

Written answers

Minister for Finance

The National Treasury Management Agency (NTMA) has advised me that a payment of €54,462 to the NTMA CEO for annual leave accrued and owed was paid upon completion of term. 

The NTMA CEO contract of employment does not contain provision for a car allowance or transport benefits.

State Bodies

Questions (434)

Fergus O'Dowd

Question:

434. Deputy Fergus O'Dowd asked the Minister for Finance further to Parliamentary Question No. 297 of 25 July 2023, in respect of the Strategic Banking Corporation of Ireland, if he will seek clarity on the “bonus” payment of €30,000; to provide a breakdown of the professional subscriptions indicated; and if he will make a statement on the matter. [37448/23]

Written answers

Minister for Finance

The Strategic Banking Corporation of Ireland have confirmed to the Department of Finance that the bonus payment of €30,000 to the Chief Executive Officer represents a discretionary performance related payment approved by the SBCI Board. 

The professional subscriptions indicated were memberships of the Institute of Bankers and of Chartered Accountants Ireland.

Budget 2024

Questions (435)

Fergus O'Dowd

Question:

435. Deputy Fergus O'Dowd asked the Minister for Finance if he has received the pre-Budget 2024 submission from an organisation (details supplied); and if he will make a statement on the matter. [37482/23]

Written answers

Minister for Finance

As Minister for Finance, I receive a large number of pre-budget submissions on a wide range of issues. All submissions are acknowledged by my Department on receipt.

I can confirm that the pre-Budget submission to which the Deputy refers was received on Wednesday 9 August and acknowledged on Thursday 10 August 2023.

The contents will be considered in the context of the forthcoming Budget. However, as the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any matters that might be the subject of Budget decisions.

Tax Code

Questions (436)

Seán Canney

Question:

436. Deputy Seán Canney asked the Minister for Finance the rationale behind the decision not to allow tax relief for land rented to a close relative; and if he will make a statement on the matter. [37512/23]

Written answers

Minister for Finance

Section 664 of the Taxes Consolidation Act 1997 provides relief from income tax for certain income from long-term leasing. The relief is available, subject to a maximum limit, where farm land is leased to a qualifying lessee for a period of five years or more. In order to qualify as a qualifying lessee for the purpose of the relief, the lessee must not be connected with the lessor, or with any of the lessors if there is more than one. The rules for establishing whether or not persons are connected are laid down by Section 10 of the Taxes Consolidation Act 1997 which sets out that a lessor is not entitled to relief where the land is let to family members or family members of their spouse or civil partner.

The restriction on leases between connected persons is intended to prevent the misuse of the exemption. In addition, allowing relief in cases where the land was leased to connected persons could delay succession or lead to the fragmentation of holdings.

It should be noted that the connected party restriction has applied since the introduction of the relief over 30 years ago and I have no plans at present to alter the restriction.

However, as with all such reliefs, my Department regularly reviews tax expenditure measures. Proposals for change are dealt with in the context of the annual Budget and Finance Bill process.

Banking Sector

Questions (437)

Ged Nash

Question:

437. Deputy Ged Nash asked the Minister for Finance whether he issued any instructions or gave any directions to the special liquidator of IBRC, pursuant to section 9 of the Irish Bank Resolution Corporation Act 2013 or otherwise, relating to legal proceedings taken against a company (details supplied) arising from its previous role as auditor of Anglo Irish Bank; if so, to outline the nature of those instructions or directions; and if he will make a statement on the matter. [37530/23]

Written answers

Minister for Finance

As Minister for Finance, I was not a party to the legal proceedings referred to and I did not issue instructions or directions to the Special Liquidators of IBRC with regard to those proceedings.