Written Answers Nos. 155-174
155. Deputy Matt Shanahan asked the Minister for Finance for a breakdown by the Appeals Commissioner of the total number of determinations arrived at by the Tax Appeals Commission for the years 2020 to 2022; and if he will make a statement on the matter. [39986/23]
View answerIn response to the Deputy’s question, the following table provides an outline of the number of determinations issued by the Tax Appeals Commission for the years 2020 to 2022:
|
Year |
No. of Determinations issued |
No. of Appeals Affected |
Quantum €m |
|
2020 |
171 |
191 |
610 |
|
2021 |
130 |
157 |
443 |
|
2022 |
190 |
237 |
292 |
|
Total |
491 |
585 |
1,345 |
All determinations are published on the Commission’s website in accordance with Section 949A0 of the Taxes Consolidation Act 1997 and can be viewed by any member of the public. Each determination details the findings of each appeal. In addition to this, a searchable database of all published determinations from 2016 is also available on the website, which provides a brief summary of the determination topic and legislation referred to within each determination.
The Appeal Commissioners issue determinations based on the facts presented to them and the application of the relevant legislation pertaining to each appeal.
156. Deputy Catherine Murphy asked the Minister for Finance the estimated cost in 2024 of reducing the 2% USC rate to persons earning between €12,012.01 and €22,920 to 1%, and for persons earning between €22,920.01 to €70,044, to reduce that 4.5% USC rate to 4%; and the number of persons who would benefit in both bands. [40116/23]
View answerI am advised by Revenue that the estimated cost to the Exchequer, on a first and full year basis, for the proposal outlined by the Deputy is €475 million and €545 million respectively. An estimated 2.16 million taxpayer units would benefit.
If the 2nd rate of USC was reduced to 1%, all taxpayer units paying USC would benefit. The number of taxpayer units that would benefit from a reduction of the 3rd rate of USC to 4% alone, without a reduction of the 2nd rate of USC, would be an estimated 1.59 million.
As the Deputy will be aware, reduced rates of USC apply for those aged 70 or over with income of €60,000 or less and for those who hold a full medical card with income of €60,000 or less. The estimated costing provided above also includes a decrease in the top rate of the reduced rate of USC from 2% to 1%, for consistency.
157. Deputy Eoin Ó Broin asked the Minister for Finance the number of renters who have availed of the renters' tax credit in 2023, providing a breakdown by county; the average amount claimed, by county; and the total amount claimed to date in 2023. [40138/23]
View answer185. Deputy Richard Bruton asked the Minister for Finance the number of persons who have claimed the new tax credit on unsupported private rents to date in 2023; the numbers that Revenue estimates are eligible; if he has considered whether obstacles exist to its full take-up, or whether information has not reached all eligible persons; and if he will make a statement on the matter. [40736/23]
View answerI propose to take Questions Nos. 157 and 185 together.
The Rent Tax Credit, as provided for in section 473B of the Taxes Consolidation Act 1997 (TCA 1997), was introduced by the Finance Act 2022 and may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.
Tax refunds can be requested within four years after the end of the tax year to which the claim relates, so it is possible that eligible persons may not claim the Rent Tax Credit in respect of 2022 until 2026.
I am advised by Revenue that the Rent Tax Credit statistics currently available refer only to claims by PAYE taxpayers for the 2022 tax year and the 2023 tax year to-date. Data on claims by self-assessed taxpayers are not yet available as these taxpayers’ returns are generally submitted later in the year. The statutory filing date for the 2022 tax return for self-assessed taxpayers is 31 October 2023.
Claims in respect of the 2022 year of assessment can be made by PAYE taxpayers by submitting an Income Tax return for that year. For claims relating to 2023, PAYE taxpayers have the option of claiming the rent tax credit due to them either as rent is incurred or at the end of the year through their Income Tax return.
Rent Tax Credit claims are made are on a ‘taxpayer unit’ basis. A taxpayer unit is either an individual with any personal status who is singly assessed or a couple in a marriage or civil partnership who have elected for joint assessment.
I am further advised that as of 13 September 2023, over 286,419 Rent Tax Credit claims have been made by 252,317 taxpayer units consisting of:
(i) 202,982 taxpayer units that made claims for 2022 only,
(ii) 34,102 taxpayer units that made claims for both 2022 and 2023,
(iii) 15,233 taxpayer units that made claims for 2023 only,
The total amount of Rent Tax Credit claimed for the tax year 2022 to-date amounts to some €133m. In order to receive a taxable benefit in relation to the RTC, a taxpayer must have an Income Tax liability greater than the RTC claimed in order to offset against it. Therefore, in some cases, taxpayers may have claimed the full RTC amount but only had an income tax liability such that they received or offset a benefit of lesser amount. As a result, taxpayers have offset or received a taxable benefit of €113m regarding the RTC.
The total claimed to date for the tax year 2023 amounts to some €30m. However, a figure for the total amount offset against tax or received as a tax refund will not be available until after the end of the year.
Data for claims relating to PAYE taxpayers for tax years 2022 and 2023 are set out by county in the tables below.
Rent Tax Credit claims relating to tax year 2022 as at 13 September 2023
|
Year of Assessment |
County |
Number of taxpayer units claiming RTC |
Average RTC claimed by taxpayer unit |
|
2022 |
Carlow |
2,144 |
€576.79 |
|
2022 |
Cavan |
1,920 |
€612.03 |
|
2022 |
Clare |
2,921 |
€580.41 |
|
2022 |
Cork |
26,969 |
€561.52 |
|
2022 |
Donegal |
2,967 |
€597.89 |
|
2022 |
Dublin |
112,273 |
€548.29 |
|
2022 |
Galway |
17,080 |
€549.69 |
|
2022 |
Kerry |
3,528 |
€574.91 |
|
2022 |
Kildare |
8,340 |
€581.55 |
|
2022 |
Kilkenny |
2,468 |
€581.08 |
|
2022 |
Laois |
1,827 |
€592.22 |
|
2022 |
Leitrim |
769 |
€575.31 |
|
2022 |
Limerick |
11,625 |
€558.79 |
|
2022 |
Longford |
1,382 |
€602.27 |
|
2022 |
Louth |
3,154 |
€575.69 |
|
2022 |
Mayo |
3,376 |
€585.41 |
|
2022 |
Meath |
4,307 |
€596.16 |
|
2022 |
Monaghan |
1,604 |
€591.42 |
|
2022 |
Offaly |
1,919 |
€595.92 |
|
2022 |
Roscommon |
1,535 |
€602.47 |
|
2022 |
Sligo |
2,778 |
€552.55 |
|
2022 |
Tipperary |
4,038 |
€590.33 |
|
2022 |
Waterford |
4,539 |
€567.32 |
|
2022 |
Westmeath |
3,450 |
€590.62 |
|
2022 |
Wexford |
3,689 |
€596.93 |
|
2022 |
Wicklow |
2,824 |
€597.80 |
|
2022 |
Not yet available |
3,658 |
€557.90 |
|
Total |
237,084 |
- |
Rent Tax Credit claims relating to tax year 2023 as at 13 September 2023
|
Year of Assessment |
County |
Number of taxpayer units claiming RTC |
Average RTC claimed by taxpayer unit |
|
2023 |
Carlow |
450 |
€618.50 |
|
2023 |
Cavan |
433 |
€653.46 |
|
2023 |
Clare |
668 |
€650.14 |
|
2023 |
Cork |
5448 |
€613.06 |
|
2023 |
Donegal |
721 |
€618.70 |
|
2023 |
Dublin |
22081 |
€607.76 |
|
2023 |
Galway |
3465 |
€598.45 |
|
2023 |
Kerry |
771 |
€641.72 |
|
2023 |
Kildare |
1847 |
€638.83 |
|
2023 |
Kilkenny |
591 |
€626.74 |
|
2023 |
Laois |
461 |
€639.00 |
|
2023 |
Leitrim |
168 |
€590.85 |
|
2023 |
Limerick |
2229 |
€616.89 |
|
2023 |
Longford |
299 |
€648.66 |
|
2023 |
Louth |
785 |
€628.27 |
|
2023 |
Mayo |
784 |
€627.05 |
|
2023 |
Meath |
1057 |
€651.96 |
|
2023 |
Monaghan |
380 |
€651.20 |
|
2023 |
Offaly |
449 |
€657.44 |
|
2023 |
Roscommon |
368 |
€660.30 |
|
2023 |
Sligo |
602 |
€620.70 |
|
2023 |
Tipperary |
879 |
€626.53 |
|
2023 |
Waterford |
1048 |
€597.95 |
|
2023 |
Westmeath |
845 |
€666.06 |
|
2023 |
Wexford |
818 |
€606.66 |
|
2023 |
Wicklow |
698 |
€652.16 |
|
2023 |
Not yet available |
990 |
€634.81 |
|
Total |
49,335 |
- |
In relation to Deputy Bruton's question on whether information has not reached all eligible persons, Revenue is conducting an information campaign to highlight the ease of use of the online myAccount system and to raise awareness of a range of key tax credits and reliefs available to taxpayers including the rent tax credit.
158. Deputy Michael Ring asked the Minister for Finance to outline the legal position in relation to businesses not accepting cash; and if he will make a statement on the matter. [40159/23]
View answerIn relation to the acceptance of cash, the general position for businesses is where a business places no restrictions on the means of payment it is prepared to accept, it must accept cash as legal tender when offered by a customer to settle a debt that has arisen. If a business specifies that payment must be in a form other than cash, for example through a sign stating, “cash not accepted” or “card payment only” at the store entrance or check out area, the customer cannot subsequently claim a legal right to pay in cash. The converse also applies if a business only accepts cash and will not accept payment by card.
As required by one of the recommendations in the Retail Banking Review, approved by Government and published in November 2022, the Department of Finance is preparing a new National Payments Strategy to be completed in 2024. One of the key objectives of the Strategy is to ensure “Access and Choice” in the form of promoting reasonable options for consumers and small business.
A key component of the strategy is a payments roadmap which will examine trends and developments in digital payments (including card) and consider how best to achieve the overarching objective of access and choice in the payment methods used in Ireland, be it cash, card, etc. I expect the Strategy to examine the relevant issues holistically and to make recommendations that will ensure the payments system enables consumers to have access to all the necessary payment means needed to fully participate in society and the economy.
The Deputy should also be aware that on 28 June the European Commission put forward two proposals within a ‘single currency package’ to ensure that individuals and businesses can continue to access and pay with euro banknotes and coins across the euro area, and to set out a framework for a possible new digital form of the euro that the European Central Bank could choose to issue in the future, as a complement to cash.
159. Deputy Michael Ring asked the Minister for Finance if he plans to introduce legislation pertaining to a cashless society; and if he will make a statement on the matter. [40160/23]
View answerIn November 2022, the Retail Banking Review was published by my Department. It concluded that, despite this decline, cash remains an important element of the payments system and the broader economy and it is essential that cash remains readily available to customers through ATMs and other means across the country. It also concluded that there was still reasonable access to cash at the time of publishing but noted that neither the Minister for Finance, nor the Central Bank, had any powers to ensure this.
Accordingly, the Review recommended that the Department of Finance should develop Access to Cash legislation and prepare heads of a bill in 2023 with the initial objective of developing criteria that would secure access to cash at about the levels prevailing in December 2022 but also provide for such criteria to be amended appropriately in future as and when cash usage declines further. The key objective is to ensure that evolution of the access to cash infrastructure does not move ahead of society's needs and expectations and that this future evolution is handled in a fair, transparent, and equitable manner.
The Review also called on Department officials to prepare heads of a bill in 2023 to require ATM operators to be authorised and supervised by the Central Bank and to provide the Central Bank with responsibility and powers to protect the resilience of the cash system including the authorisation and supervision of cash-in-transit firms in respect of their cash handling activities and related financial services. It is my intention to fully honour this commitment and this work is now well underway by officials in my Department. It is intended that one piece of legislation will be drafted for all three recommendations on access to cash, including the aspects on Independent ATM Deployers (IADs).
This is an important piece of legislation and Heads of the Bill will be brought to Government before the end of this year to seek approval to draft the Bill and to submit it for pre-legislative scrutiny to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and the Taoiseach.
In relation to the acceptance of cash, the current position for businesses in Ireland is where a business places no restrictions on the means of payment it is prepared to accept, it must accept cash as legal tender when offered by a customer to settle a debt that has arisen. If a business specifies that payment must be in a form other than cash, for example through a sign stating, “cash not accepted” or “card payment only” at the store entrance or check out area, the customer cannot subsequently claim a legal right to pay in cash. The converse also applies if a business only accepts cash and will not accept payment by card.
As required by one of the recommendations in the Retail Banking Review, approved by Government and published in November 2022, the Department of Finance is preparing a new National Payments Strategy to be completed in 2024. One of the key objectives of the Strategy is to ensure “Access and Choice” in the form of promoting reasonable options for consumers and small business.
A key component of the strategy is a payments roadmap which will examine trends and developments in digital payments (including card) and consider how best to achieve the overarching objective of access and choice in the payment methods used in Ireland, be it cash, card, etc. I expect the Strategy to examine the relevant issues holistically and to make recommendations that will ensure the payments system enables consumers to have access to all the necessary payment means needed to fully participate in society and the economy.
The Deputy should also be aware that on 28 June the European Commission put forward two proposals within a ‘single currency package’ to ensure that individuals and businesses can continue to access and pay with euro banknotes and coins across the euro area, and to set out a framework for a possible new digital form of the euro that the European Central Bank could choose to issue in the future, as a complement to cash.
160. Deputy Steven Matthews asked the Minister for Finance further to Parliamentary Question No. 475 of 11 September 2023, if he will confirm the anomaly, which was acknowledged by him whereby foster children are treated differently in approved retirement fund legislation, will be rectified in the context of the upcoming budget; and if he will make a statement on the matter. [40169/23]
View answerAs I noted in my response to PQ No. 475 of 11 September 2023, I am aware that there is a difference in the tax treatment where an Approved Retirement Fund (ARF) is inherited by a child or a foster child.
However, I would note that this issue is more complex than a single difference in one particular pension product. The definition of child which is the basis for the ARF provisions applies across a wide range of tax legislation in the Taxes Consolidation Act 1997.
In addition when considering pensions, the same tax treatment and therefore the same distinction applies to, for example, Personal Retirement Savings Products. For occupational pensions schemes there can be a range of different treatment for foster children depending on the rules of scheme.
I am cognisant of the need to ensure foster children are treated equitably within the taxation system, but this must progress in a comprehensive, considered matter, with suitable safeguards, and considering not just pension and inheritance tax, but also any implications for other taxes. My officials, together with officials in the Revenue Commissioners, are continuing to examine this complex issue.
161. Deputy Robert Troy asked the Minister for Finance if he will outline any measures which will be included in budget 2024 to assist mortgage holders whose accounts are currently with vulture funds and who are paying extremely high interest rates; and to outline what plans his Department has to assist these mortgage holders in being allowed to move their mortgage accounts to other lenders and to avail of fixed-rate mortgages. [40192/23]
View answerThe Government is acutely aware of the challenges rising interest rates, and the cost of living more generally, are having for some mortgage holders. In that context, I recently met with banks and other mortgage creditors and made it clear to them that they need to be aware of these difficulties for their customers. I also indicated that all credit providers should be open to considering applications for new mortgages from all credit worthy borrowers, including any borrower whose mortgage is currently serviced by a credit servicing firm or other regulated entity who does not provide new credit.
Arising from that meeting, the mortgage industry has now outlined a number of further measures to assist their customers at this time, including:-
• a second phase of a ‘Dealing With Debt’ campaign to highlight new and existing supports for concerned mortgage customers;
• mortgage servicing firms and MABS to collaborate on an expansion of streamlined customer engagement framework; and
• initial eligibility criteria by the main lenders to provide clear guidelines for home mortgage customers of credit servicing firms who are seeking to switch their mortgage.
Credit servicing firms have committed to working with these criteria to support their customers and to ensure they are aware that they may have options to switch their mortgage. Also the main mortgage broker representative bodies have agreed to communicate these criteria to borrowers seeking to switch their home loans.
In addition, my Department is also running a programme of work with the ESRI to promote greater switching activity more generally by consumers.
It is important in the current environment that borrowers who are able and who want to switch mortgage provider are supported, but it is also the case that there is an obligation on credit providers to assesses the creditworthiness of all mortgage applicants and that the final decision on whether or not to provide credit in any particular case is and remains a business and commercial matter for the boards and management of individual lenders.
Regulated firms are also keeping the range of supports they have available for their customers in or facing mortgage arrears under review and additional alternative repayment arrangements, including a fixed interest rate option, are now coming on stream from non-banks.
The consumer protection framework to assist mortgage borrowers in genuine difficulty is strong and I would encourage anyone experiencing difficulty to reach out and contact their mortgage creditor. The services of MABS, and in particular the ‘Abhaile’ service, will also be available to mortgage holders.
In relation to measures for mortgage holders in Budget 2024, as the Deputy is aware all additional expenditure and taxation proposals will fall to be considered by Government in the context of the agreed available resources. This will be the most appropriate time to decide how the available resources can best be deployed to support different groups in our society.
162. Deputy Patrick Costello asked the Minister for Finance further to Parliamentary Question No. 430 of 11 September 2023, if he will consider extending the application of a reduced VAT rate to non-alcoholic beverages, regardless of the setting of sale (licensed premise, restaurant, supermarket or other retailer); and if he will make a statement on the matter. [40200/23]
View answerAs the Deputy will be aware, it is a longstanding practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
163. Deputy Carol Nolan asked the Minister for Finance to provide details on the measures his Department has taken to implement specific action points (details supplied) of the action plan to support the National LGBTI+ Inclusion Strategy 2019-2021. [40231/23]
View answerI wish to inform the Deputy that my Department has taken a series of measures to implement the specific action points referenced of the National LGBTI+ Inclusion Strategy 2019-2021.
My Department is supportive of the Government Departments leading on the Strategy actions across wider society, and also implements actions within my Department as an employer to promote equality, diversity and inclusion in the workplace.
In relation to Action Point 1.2 'Identify key large-scale events each year to promote LGBTI+ visibility' and 1.4 'Coordinate a series of events and communications to support positive messaging around Pride and festivals nationwide and more broadly to promote LGBTI+ visibility, awareness and expertise'.
The Department has taken positive steps in this regard to promote LGBTI+ community visibility within the Department. The Department has an active PRIDE Network and supports events during PRIDE week including providing pride colour pins and lanyards to staff, coffee mornings and Departmental participation in Dublin PRIDE parade. In addition, staff have attended a series of PRIDE focused events including an interactive Pronouns Workshop in June 2022 which focused on how to respect a colleagues’ gender identity.
Other initiatives to increase awareness of EDI include a series of webinars hosted in June 2023 by OneLearning (the Civil Service wide training provider) during PRIDE month and distribution of information leaflets entitled “The ABCs of LGBT+ ” to all staff members which focused on terminologies of gender.
For Action Point 2.2 'Ensure that equality, diversity and inclusion is a core feature of organisational and HR strategy and subject to ongoing review.'
Equality, Diversity and Inclusion is a key theme of the 'Civil Service Renewal Strategy 2030', which commits to nurturing a workforce for the future by bringing equality and inclusivity to the fore of its organisational design. By placing a focus on Equality, Diversity, and Inclusion (EDI), the Department is committed to recognising and supporting all employees’ gender identity and gender expression to further develop a positive, accepting and supportive work environment, where every employee is treated with dignity and respect. This forms a core part of our HR Strategy and organisation values. A new Gender Equity Network has recently been established within my Department which I will launch formally later this month.
For Action Point 2.4 ‘Develop a Civil and Public Service wide LGBT+ Employee and Ally Network’.
The Department is a member of the cross Departmental LGBTI+ Inclusion Strategy Committee, chaired by Dept. of Children, Equality, Disability, Integration and Youth which actively monitors the implementation of the Strategy actions. The Network cited in 2.4 has not yet been established but work is underway in Dept. of Children, Equality, Disability, Integration and Youth to progress this action, which my Department will then support once established.
For Action Point 3.2 - 'Coordinate the roll out of a public recognition marker denoting LGBTI+ friendly service provision, particularly in rural and other hard to reach communities'.
The Department does not have a role in front line service provision as the Department is a central Department with a policy focused remit. We do not engage directly with the public in respect of events nonetheless we are cognisant of the need to respect gender identity and gender expression and are supportive of a public recognition marker denoting LGBTI+ friendly service provision.
For Action Point 5.1 - 'Utilise the Equality and Human Rights Public Sector Duty to take account of LGBTI+ considerations in the development or review of public sector policy, to be informed by targeted consultation where necessary'.
As a central Department with a policy focused remit, my Department does not generally provide services directly to the general public or businesses. Nonetheless, the Public Sector Equality and Human Rights Duty obligations impact on the Department’s functions. Specifically, this is evident in our strategic planning processes, annual review of our Governance Framework, ongoing training offered by the Human Resources Unit and in assessing impacts as part of our policy development. The provisions of the Equality and Human Rights Public Sector Duty will also form part of the context of my Department's Equality, Diversity and Inclusion Strategy, work on this Strategy will commence later this year.
For Action Point 12.2 - Ensure that each relevant Department/Government body examines how, once a Gender Recognition Certificate is obtained, administrative processes can be streamlined, improving interconnection between Departments, and reducing costs for replacement of official documents, while maintaining a person’s privacy.
The Department does not provide official documents to the public and does not have a remit in regard to this action.
For Action Point 24.2 - 'Informed by the findings of the above research, develop an appropriate package of measures for implementation in response'.
Progress on this measure to date has been provided by the LGBTI+ Inclusion Strategy Committee who has advised that the Government is developing a legislative response to prohibit conversion practices in Ireland. Given the potential complex and sensitive nature of the proposed legislation, the Government is carefully considering the underpinning policy matters to ensure that vulnerable members of society are protected from these harmful practices. Work on the plan to draft legislation is ongoing. Progress will then be determined by the proposals passage through the legislative process. At this point in time there is no action form my Department in respect of this action.
164. Deputy Catherine Connolly asked the Minister for Finance if he has received and considered the INTO’s pre-budget submission; if he will ensure that its four main demands are included in the upcoming budget; and if he will make a statement on the matter. [40246/23]
View answerAs 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 from numerous sources. Each receipt was acknowledged, with the first acknowledgement issuing on Wednesday, 6 September 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.
165. Deputy Robert Troy asked the Minister for Finance if his Department can consider changes to the capital gains tax credit system to attach the credit to the landlords rather than the property (details supplied). [40293/23]
View answerAs the Deputy will be aware, Capital Gains Tax (CGT) is chargeable on a gain arising on the disposal of an asset at the rate of 33%.
I understand that the CGT credit referred to by the Deputy in his question is the annual exempt amount, which is provided for in section 601 of the Taxes Consolidation Act 1997. This gives an exemption to an individual in respect of the first €1,270 of chargeable gains in any one year of assessment. Where the gains accruing to the individual exceed that figure, only the excess over €1,270 is chargeable. In relation to the amount of chargeable gains against which the annual exempt amount may be set, any losses, be they losses arising in that year of assessment or carried forward from a previous year of assessment, must first be set off against gains. As such, it is not permissible to set the annual exempt amount against gross chargeable gains, thus leaving losses which can be set off in the year of assessment or available for carry forward to a later year. The exemption does not apply to an individual who has obtained relief under section 598 (disposal of business or farm on “retirement”) or section 599 (disposal within family of business or farm) of the Taxes Consolidation Act 1997.
Should a chargeable gain arise on the disposal by a landlord of a rental property, the annual exempt amount is available for offset against that gain or, should other assets have been disposed of in the same year of assessment, against the net chargeable gains arising to the landlord in the year of assessment. As such, the annual exempt amount is not attributable to gains arising on the disposal of a specific asset; instead, it is set against the net chargeable gains arising to a chargeable person in respect of all disposals of assets made by the chargeable person in that year of assessment. In this way, the benefit of the exemption accrues to the chargeable person, and not to any specific asset disposed by them.
166. Deputy Steven Matthews asked the Minister for Finance the position regarding a review of the level of pension contributions that qualify for the higher rate of tax relief introduced in 2014; and if he will make a statement on the matter. [40311/23]
View answer177. Deputy Colm Burke asked the Minister for Finance to confirm that consideration would be given to increasing the standard fund threshold for pension contributions of €2 million, which was set in October 2014, to €2.4 million, in view of the fact that the consumer price index has increased by 19.7% since October 2014; and if he will make a statement on the matter. [40613/23]
View answer182. Deputy Michael McNamara asked the Minister for Finance if he will consider an increase in the pension threshold from €2 million to €2.4 million to ensure that individuals who have reached the 2014 pension cap will now have the same purchasing power as an individual in 2014; and if he will make a statement on the matter. [40654/23]
View answerI propose to take Questions Nos. 166, 177 and 182 together.
I understand that Deputy Matthews, in line with Deputies Burke and McNamara, is referring to the chargeable excess tax and Standard Fund Threshold (SFT) regime.
I am advised by Revenue that the SFT was introduced in Finance Act 2005, with the purpose of addressing excessive pension accrual, and it applies to all private and public sector pension arrangements. It is provided for in Chapter 2C of Part 30 of the Taxes Consolidation Act 1997 (TCA) which sets out the maximum tax-relieved pension fund at retirement. If the relevant threshold is exceeded, the excess over the threshold (the “chargeable excess”) is subject to an upfront, ring-fenced income tax charge (known as “chargeable excess tax”) at 40%.
The SFT was initially set at €5 million. The legislation allowed the Minister for Finance to amend the SFT in line with an “earnings adjustment factor”, which has happened on two occasions. The SFT was reduced to €2.3 in December 2010 as part of a package of measures to deliver significant savings in the broad pension area following agreement reached with the EU/IMF.
The SFT was further reduced in Finance Act 2013 to €2 million, with effect from 1 January 2014, as part of reforms introduced to make supplementary pension provision more sustainable and equitable over the long term. The primary purpose of these changes was to further restrict the capacity of higher earners to fund or accrue large pensions through tax-subsidised sources.
It is not the case that increases in the CPI or other measures of purchasing power should necessarily automatically result in an increase to the SFT. However, as with all taxes, the tax treatment of supplementary pensions, including the SFT is kept under ongoing review.
167. Deputy Ivana Bacik asked the Minister for Finance the position regarding the residential zoned land tax; when it will be implemented; and if he will make a statement on the matter. [40339/23]
View answerThe 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.
The 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.
A landowner with land identified on any published draft map had the opportunity to make a submission to the 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. The 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 the local authority, taking into account the need to ensure that housing supply targets across the county can be met.
Final maps will be published by local authorities on 1 December 2023 and the tax will first be due and payable in 2024.
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 in relation to the RZLT measure.
168. Deputy Richard Bruton asked the Minister for Finance the value of each tax credit which can be claimed; and his latest estimate of the numbers claiming them. [40359/23]
View answer169. Deputy Richard Bruton asked the Minister for Finance the value of each tax exemption which can be claimed; and his latest estimate of the numbers claiming them (for example, the rent-a-room scheme, and so on). [40360/23]
View answerI propose to take Questions Nos. 168 and 169 together.
The Department publish an Annual Report on Tax Expenditures alongside the Budgetary papers each year. The publication of such a report is a statutory requirement under the EU Budgetary Framework Directive (2011/85/EU), which was transposed into Irish legislation under S.I. 508 of 2013.
Under this Directive the Department is required to publish detailed information on the impact of tax expenditures on revenues, this has been carried out each year since 2015 at Budget time. The most recent report from September 2022 can be found on the Departments website and contains details of the Department's list of tax expenditures and their costings. The next report will be published in October this year alongside the budgetary papers. The statistical information is provided to the Department by Revenue, who provide details on the revenue foregone for each Tax Expenditure for both the most recent year available and the previous year, along with the numbers claiming the relief. The Department uses the OECD definition of tax expenditure for the purpose of legislative reporting obligations.
Revenue has recently changed how they publish statistical information on tax expenditures. Since August 2023 Revenue have a statistical publication called Cost of Tax Expenditures on their website, this can be found at revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx. The first section of this publication outlines available statistical information on the items defined by the Department of Finance as being a Tax Expenditure. The second section outlines the available statistical information on the remaining credits, reliefs and allowances not contained in the Department of Finance Annual Report on Tax Expenditures.
170. Deputy Peadar Tóibín asked the Minister for Finance to provide a list of all studies, research and reports commissioned by his Department that were outsourced, in each year since the formation of this Government, in tabular form; the names of the companies to which each study, research and report was outsourced; the total cost for each; the number of reports finalised and presented to him that have yet to be released by his Department; the dates on which any such reports yet to be released were first provided to him; and if he will make a statement on the matter. [40370/23]
View answerDetails of studies, research and reports commissioned by my Department are set out in the attached table.
|
Year |
Studies, research and reports commissioned |
Organisation commissioned |
Total Cost (Ex VAT) |
Published |
Date reports yet to be released provided to Minister |
|
Modelling of the multinational sector |
Joint project with ESRI |
€62,310 |
Yes |
N/A |
|
|
Capital buffers |
Joint project with ESRI |
€18,434 |
Yes |
N/A |
|
|
Recovery scenarios from COVID19 |
Joint project with ESRI |
€68,607 |
Yes |
N/A |
|
|
Impact of COVID19 on SMEs |
Joint project with ESRI |
€34,257 |
Yes |
N/A |
|
|
Corporation tax elasticities |
Joint project with ESRI |
€13,944 |
Yes |
N/A |
|
|
Sectoral exposure to COVID and Brexit |
Joint project with ESRI |
€38,346 |
Yes |
N/A |
|
|
US trade patterns and risks |
Joint project with ESRI |
€40,670 |
Yes |
N/A |
|
|
Fiscal cost of ageing |
Joint project with ESRI |
€8,875 |
Yes |
N/A |
|
|
Europe’s Economic and Monetary Union Beyond Covid-19 |
Independent academic report from Professor Federico Fabbrini, Full Professor of EU law at Dublin City University. |
€15,000 |
Yes |
N/A |
|
|
2020 |
Desktop Review of Costs and Outcomes of Large Scale Liquidations |
RSM consulting |
€24,750 |
Yes |
N/A |
|
Scenarios on economic recovery from COVID-19 |
Joint project with ESRI |
€38,203 |
Yes |
N/A |
|
|
Banking sector modelling |
Joint project with ESRI |
€50,711 |
Yes |
N/A |
|
|
Transition to a low carbon economy |
Joint project with ESRI |
€20,256 |
Yes |
N/A |
|
|
Fiscal cost of aging |
Joint project with ESRI |
€14,291 |
Yes |
N/A |
|
|
Firm dynamics and productivity |
Joint project with ESRI |
€4,896 |
Yes |
N/A |
|
|
SME survival and recovery following COVID-19 |
Joint project with ESRI |
€37,776 |
Yes |
N/A |
|
|
SME investment and financing |
Joint project with ESRI |
€32,344 |
Yes |
N/A |
|
|
Initial impacts of Brexit on Irish trade |
Joint project with ESRI |
€34,809 |
Yes |
N/A |
|
|
2021 |
Economic Research into Outbound Payments of Royalties |
Mr Seamus Coffey |
€4,800 |
Yes |
N/A |
|
The role of firm dynamism in productivity - joint research with ESRI |
Joint project with ESRI |
€36,372 |
Yes |
N/A |
|
|
Flows into self-employment - joint research with ESRI |
Joint project with ESRI |
€29,877 |
Yes |
N/A |
|
|
SME Structural Change Research - joint research with ESRI |
Joint project with ESRI |
€46,926 |
Yes |
N/A |
|
|
Potential Impact of the War in Ukraine on the Irish Economy |
Joint project with ESRI |
€69,615 |
Yes |
N/A |
|
|
Economic impacts of climate transition - joint research with ESRI |
Joint project with ESRI |
€45,505 |
Yes |
N/A |
|
|
Report on the drivers of cost and availability of finance for residential development |
KPMG |
€80,000 |
Yes |
N/A |
|
|
Help to Buy Review |
Mazars |
€64,300 |
Yes |
N/A |
|
|
A study on Cross Border Employments |
ESRI |
€60,000 |
Yes |
N/A |
|
|
Research Economic into Outbound Payments of Dividends and Interest |
Mr Seamus Coffey |
€4,800 |
Yes |
N/A |
|
|
2022 |
Report of the Inter Departmental Working Group on the Review of the Domestic Implementation of Restrictive Measures (Sanctions) |
External chair compiled the report. (paid Jointly by Department of Foreign Affairs, the Department of Enterprise, Trade and Employment and the Department of Finance |
€8,750 |
Yes |
N/a |
|
Assessing the Potential Impact of Population Ageing on the Public Finances |
Joint project with ESRI |
€20,000 |
To be finalised |
Q4 2023 |
|
|
Impact of the Global Tax Reforms on Ireland’s Corporate Investments and wider economy |
Joint project with ESRI |
€30,000 |
To be finalised |
Q4 2023 |
|
|
Impact of wage subsidies on the labour market during COVID-19 |
Joint project with ESRI |
€11,000 |
To be finalised |
Q4 2023 |
|
|
A Study of Cross-Border Employment in Ireland |
Joint project with ESRI |
€60,000 |
To be finalised |
Q4 2023 |
|
|
The Changing Interest Rate Environment and the Impact on Macro-Financial Linkages |
Joint project with ESRI |
€60,000 |
To be finalised |
Q4 2023 |
|
|
2023 |
Joint Research Programme on the Development of the Economic and Social Research Institute’s Ireland Environment, Energy and Economy Model |
Joint project with ESRI |
€100,000 per year (incl Vat) |
2-year project with possibility of extending on a yearly basis thereafter |
Q4 2024 |
171. Deputy Paul Donnelly asked the Minister for Finance if he has spoken with the President of the European Investment Bank to date in 2023. [40406/23]
View answerThe Deputy will be aware that Ireland has benefitted from loans from the European Investment Bank (EIB) to the value of approximately €1 billion per annum in recent years. EIB financing to Ireland has covered both public and private sectors, and a broad range of sectors, including broadband; energy generation and transmission; transport; health; water; education (schools and Third Level); SMEs via the SBCI; social housing; and roads PPPs; with a broad geographic spread.
Since taking office as Minister for Finance in December 2022, I have had an opportunity to engage informally on a number of occasions with the outgoing EIB President, Werner Hoyer. As the Governor for Ireland at the EIB, I attend the Annual Meeting of the EIB Board of Governors. We met at the AGM in June and I had a good engagement with President Hoyer at the Meeting. There are other occasions where I have the opportunity to speak with the President of the EIB. In this regard, I attend monthly meetings of the Economic and Financial Affairs Council (Ecofin) in Brussels. This is made up of the economic and finance ministers from all member states and we receive regular updates from the EIB President. In addition, I have also met with EIB Vice-President Ricardo Mourinho-Félix, who represented the EIB at this year’s EIB-Ireland Financing Group meeting, which took place in Cork on 30 June. I met President Hoyer again last week at the informal Eurogroup and Ecofin meetings in Spain.
Officials are in regular, ongoing, contact with the EIB to further widen and deepen the Irish/EIB relationship to secure additional funding for the country. This includes engagements in Luxembourg and Ireland with EIB officials, including the head of the Bank's Irish Office who is based here.
Finally, I would note that the term of the current EIB President will conclude at the end of 2023. I understand that he intends to make a visit to Dublin prior to his term concluding at the end of the year and my officials are engaging with the EIB on this currently. The process to elect a new President is underway and I am hopeful that a decision on this will be reached in the coming weeks. It would be my intention to seek a meeting with the new President, once in place, early in 2024 if it is possible.
172. Deputy Éamon Ó Cuív asked the Minister for Finance the last time the threshold under which a person in receipt of a grant or grants from the State in a calendar year, was not required to produce a tax clearance certificate was raised; the present level of the threshold; whether he intends increasing this threshold in line with inflation since to cut down unnecessary paperwork for recipients of modest grants; and if he will make a statement on the matter. [40435/23]
View answerTax Clearance is required for various purposes, such as renewal of a variety of licences and permits, public sector contracts, grants, subsidy payments and Government supports. The tax clearance procedures in relation to the payment of grants, subsidies and similar type payments by Government Departments and other public sector bodies are set out in Circular 44/2006.
The following payments are excluded from the scope of the procedures:
(i) Payments by one public sector body to another;
(ii) Social welfare-type payments;
(iii) Payments to registered Charities;
(iv) Payments made under the Criminal Injuries Compensation Tribunal;
(v) Payments made under the Hepatitis C and HIV Compensation Tribunal;
(vi) Payments made under the Residential Institutions Redress Board; and
(vii) Payments to individuals or bodies, which do not exceed €10,000 in a 12 month period, or €650 in the case of payments which finance construction operations, as defined in section 530 of the Taxes Consolidation Act 1997.
The procedures in the circular apply to all applications received after 1 January 2007. This was the most recent time that the threshold amounts for exclusion under (vii) above were amended.
In the case of relevant payments totalling €10,000 or more in a 12 month period, the applicant is required, for each payment, to produce either a valid tax clearance or C2 certificate as issued by Revenue. However, it should be noted that special arrangements apply where payments which finance construction operations, as defined in section 530 of the Taxes Consolidation Act 1997, exceed €650.Further details on the current tax clearance procedures in respect of grants, subsidies and similar type payments is available at circulars.gov.ie/pdf/circular/finance/2006/44.pdf.
There are currently no plans to amend the threshold amounts over which the tax clearance procedures apply to relevant payments.
173. Deputy Neasa Hourigan asked the Minister for Finance if his Department has any plans to review or revise the current deferred tax assets regime as it relates to large financial institutions with significant previous losses; and if he will make a statement on the matter. [40468/23]
View answerFor a number of years following the economic crash, there was a restriction on the use of losses carried forward by NAMA-participating institutions (AIB, Bank of Ireland (BOI), Anglo Irish Bank, Irish Nationwide Building Society and the Educational Building Society (EBS)), such that losses could be used to shelter only 50% of taxable profits in any given year, with any restricted amounts carried forward for use in future years.
At the time of the introduction of the restriction, contained in section 396C Taxes Consolidation Act 1997, the Government had limited direct participation in the banking system. However, by 2013, the State had acquired substantial holdings in the banking sector following the re-capitalisation of the banks and the restriction was considered to have outlasted its initial purpose to the point where it was deemed to be acting against the State’s interests.
The repeal of Section 396C in Budget 2014 reduced the State’s role as a ‘backstop’ provider of credit and shortened the time-frame over which the bank losses were likely to be used. It therefore put the institutions in a stronger position when being assessed by regulators and investors and reduced the risk of a future requirement for State support. It also protected the value of the State’s equity and debt investments in the pillar banks, and it therefore follows that there would be a material negative impact on the valuation of the State’s remaining bank investments if any change in the tax treatment of accumulated losses (DTAs) were to be introduced.
In addition, despite the scale of losses accumulated as a result of the crash, the banks have also been contributing to the Exchequer through the financial institutions levy (the ‘bank levy’). The bank levy was originally intended to apply for the period 2014 to 2016, but it was subsequently extended and amended on several occasions and has raised some €1.4 billion for the Exchequer since its introduction. While it is now due to expire at the end of 2023, I have announced that it my intention that the bank levy will be further extended, and the future scope and rate of the levy are being considered in advance of the upcoming Budget.
There have been proposals for the re-introduction of a limitation on loss relief for banks, and this has been discussed in detail in the Oireachtas on a number of occasions. I would first note that only AIB and BOI remain of the original five NAMA-participating institutions previously subject to Section 396C. Reinstating a NAMA-linked tax loss restriction would therefore impact only AIB and BOI. It also has to be noted that the State no longer has any shareholding in BOI, and has been repaid its full investment.
The reintroduction of a tax loss restriction of this nature could also have a number of negative impacts, discussed in some detail in a technical paper published on my Department’s website (see www.gov.ie/en/publication/436ff7-technical-note-on-the-potential-consequences-of-changes-to-the-treat/). These include considerations relevant to the capitalisation of the banks, consequential impacts for consumers, and the current and future value of the State’s remaining shareholdings.
State aid implications would also need to be considered, as a restriction focussed exclusively on the banking sector, or on the remaining NAMA participating institutions, would be a targeted measure.
For these reasons, a change to the tax treatment of bank trading losses is not currently under consideration.
174. Deputy Neasa Hourigan asked the Minister for Finance if his Department, as part of budget 2024, will present proposals to bring Ireland in line with the commitment to set a minimum effective corporate tax rate of 15%; and if he will make a statement on the matter. [40469/23]
View answerBuilding on the original OECD Base Erosion and Profit Shifting (BEPS) project, in October 2021 Ireland, along with almost 140 other countries in the OECD/G20 Inclusive Framework on BEPS, agreed a two-pillar solution to address the tax challenges arising from digitalisation and globalisation.
Recognising how large multi-national enterprises (MNEs) across the globe now operate commercially and generate value, this significant agreement will ensure that the international tax framework keeps pace with these developments in a coordinated way.
Pillar Two of the agreement will see the adoption of a global minimum effective tax rate of 15% applying to multinational companies with global revenues in excess of €750 million. Ireland will retain its 12.5% corporation tax rate on trading profits for the 95% of companies in Ireland that are outside the scope of the agreement.
Pillar Two will be implemented in Ireland largely via transposition of the EU Minimum Tax Directive (Council Directive (EU) 2022/2523), which was agreed in December 2022. The Directive aims to ensure that there is a consistent application of the Pillar Two agreement across all EU Member States and in accordance with EU law, and thus will play an important role in safeguarding Ireland's competitive tax regime.
Work is now well advanced to transpose the EU Minimum Tax Directive in Ireland in next month’s Finance Bill. This is a complex undertaking, requiring a significant commitment of resources by both the State and the business community.
Ongoing stakeholder engagement by my Department has been an important part of the transposition process. Building on an initial public consultation last year, in March this year I published a Feedback Statement on Pillar Two implementation which contained an overview of our proposed approach to domestic transposition and draft approaches to some of the key legislative provisions, and confirmed Ireland’s intention to introduce a Qualified Domestic Top-up Tax (QDTT). The Feedback Statement, together with responses received, is available on my department’s website at:
www.gov.ie/en/consultation/a0d43-pillar-two-implementation-feedback-statement/
In July, I published a second Feedback Statement containing draft approaches to further provisions of the implementing legislation, including the QDTT, and approaches to incorporating additional guidance recently released by the OECD. The Feedback Statement, together with responses received, is available at: www.gov.ie/en/consultation/45846-feedback-statement-on-the-transposition-of-the-eu-minimum-tax-directive-the-pillar-two-directive/
Responses to both consultations are informing the continuing development of the final legislation.
Certain technical aspects of how the Pillar Two is to operate remain under discussion at the OECD and Ireland is an active participant in these discussions.
