Written Answers Nos. 246-265
246. Deputy Steven Matthews asked the Minister for Finance if his attention has been drawn to concerns of an organisation (details supplied) regarding its clients’ difficulty in qualifying for mortgages, life assurance and other financial products; if his Department is carrying out any research into this issue or engaging with any financial institutions on this matter; and if he will make a statement on the matter. [12435/24]
View answerAs the Deputy is aware, neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products. This position is reinforced by the EU framework for insurance (the Solvency II Directive).
Officials in my Department have engaged with Insurance Ireland, the official industry body, for more information on this issue. It advised that when consumers are taking out a life assurance policy, companies will have to take the existence or potential of medical conditions into consideration and assess each case individually. Decisions on the cost and availability of these products depend on the individual circumstances of the applicant, such as age and health at application as well as past history. Consequently, consumers will generally be asked questions about various conditions including asthma, bronchitis, kidney disease, heart attacks and strokes, among others. However, different insurers can use slightly different criteria to assess this risk. In some instances, the risk presented by the applicant outweighs the risk appetite of the insurer and the application may be declined.
In the case of these applicants, this may be due to a risk linked to the medical condition or existing alongside the issues relating to the medical condition. If not already done so, Insurance Ireland have suggested the applicant contact the life insurers who have declined the case to request a detailed breakdown of why the medical condition has led to a decline, if they have not already received it.
It may interest the Deputy to know that that in order to assist clients who have had difficulty acquiring life cover due to a pre-existing illness, Brokers Ireland has published a register containing contact details of Brokers who have experience in advising on life cover in this area. This is available at: brokersireland.ie/life-cover-pre-existing-illnesses/
Specifically in relation to mortgages, as the Deputy may be aware, under existing legislation (Section 126 of the Consumer Credit Act 1995), lenders are permitted to provide a mortgage in situations where a borrower may be unable to obtain life insurance, or where such insurance is unduly costly compared to that payable by borrowers generally. For individuals, including those living with certain medical conditions, and who may experience difficulties acquiring mortgage protection insurance when securing a home loan, this is an important provision to be aware of.
In addition, in cases where a person has been refused a mortgage by a bank or another Central Bank regulated mortgage provider, the Deputy may wish to note that eligible borrowers, including where the applicant can provide proof of insufficient mortgage offers of finance from two regulated financial providers, can apply to the Local Authority Home Loan Scheme, which falls within the remit of the Department of Housing Local Government and Heritage.
As the Deputy refers to in the details supplied, in June 2023, Insurance Ireland and its members published a Code of Practice for Underwriting Mortgage Protection Insurance for Cancer Survivors. This entered into force on 6 December 2023.
Under the Code, insurers will disregard a cancer diagnosis where treatment ended more than 7 years prior to application (or more than 5 years if the applicant was under 18 at the time of diagnosis). The Code will apply to mortgage cover applications of up to €500,000 for a principal private residence. Insurance Ireland estimates that this threshold covers over 90 per cent of mortgage protection policies in the market. My officials continue to engage with Insurance Ireland regarding the implementation of the Code, and will closely monitor the outcomes.
In order to promote confidence in the application of the Code, Insurance Ireland will appoint an external reviewer to ensure that the provisions of the Code of Practice have been implemented and are being adhered to. A report on this will be made available to relevant stakeholders.
The first review will take place in January 2025, in order to review implementation, with the next review due in 2028 and every three years thereafter. The Code of Practice will also be considered in line with every review, which will include the definition set out within the document.
247. Deputy Pearse Doherty asked the Minister for Finance the cost of Ireland's bid to host the EU Anti-Money Laundering Agency; the breakdown of this cost including advertising and so on. [12495/24]
View answerThe final costs associated with the bid to host the Anti-Money Laundering Authority are being collated by officials in my Department with some charges yet to be allocated for hotels and transport. At this point, the main costs incurred during the application process are set out below:
|
Advertising |
€176,638 |
|
Travel |
€21,586 |
|
Brussels launch event |
€5,599 |
|
Total |
€203,823 |
248. Deputy Pearse Doherty asked the Minister for Finance if the 471 high-quality apartments at a location (details supplied) which are identified as being available on the basis of first refusal to Ireland's bid for the Anti-Money Laundering Authority, will still be available to the State on that basis. [12496/24]
View answerMy Department was never in negotiation with any of the developers during the Anti-Money Laundering Authority (AMLA) bid application process and no commercial or residential property was off the market during the application for AMLA.
As part of the EU Commission application form for the AMLA, each Member State seeking to host AMLA was required to identify suitable premises as a headquarters for the new institution. In Ireland's case, the OPW identified a number of properties based on the criteria supplied and two were included in the final application. In relation to one of the developments identified, the Irish bid noted that the there were residential units included as part of the overall development complex.
Had the Irish bid been successful, then it would have been up to the EU Commission Task Force, that has been established in relation to the setting up of AMLA, to assess the various property options identified in the wining bid and for them to decide on a suitable building for AMLA.
249. Deputy Jennifer Murnane O'Connor asked the Minister for Finance if he met his Chinese counterpart during his recent visit to China for St. Patrick's Day events; and if he will make a statement on the matter. [12562/24]
View answerOn the final day of my visit to China I met with the Minister for Finance of the People's Republic of China, Mr Lan Foan, in the Ministry of Finance in Beijing.
The meeting, which lasted for ninety minutes, provided an important opportunity to discuss the bilateral trade between Ireland and China, and the political and diplomatic relationship between our two countries. We also discussed the economic outlook for both our countries, and the sectors with opportunities for growth in the China-Ireland trade relationship over the coming years.
In 2022, the value of two way trade in goods and services between Ireland and China amounted to approx. €45 billion. With a population of 1.4 billion and the world's second largest economy, the Chinese market offers much potential as an export opportunity for Irish businesses. We also discussed the wider geopolitical situation including the war in Ukraine, the appalling situation in Gaza, EU-China relations, as well as human rights. I outlined the position of the Irish government on all these matters.
Overall, it was a positive meeting with an open exchange of views on important issues of mutual interest and I look forward to further engagements in the future.
251. Deputy Pauline Tully asked the Minister for Finance for an update on the actions being taken to implement the proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the disabled drivers and disabled passenger's scheme. [12612/24]
View answerThe Deputy will be aware that the final report of the National Disability Inclusion Strategy (NDIS) Transport Working Group's review of mobility and transport supports including the Disabled Drivers and Disabled Passenger’s Scheme (DDS), endorsed proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the DDS.
The Working Group was chaired by Minister Anne Rabbitte and led by the Department of Children, Equality, Disability, Integration and Youth (DCEDIY).
Access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Consequently under the aegis of the Department of Taoiseach officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report and to map a way forward.
My officials are proactively engaging with this Senior Officials Group's (SOG) work as an important step in considering ways to replace the DDS, as one specific personal transport response, in the context of broader Government consideration of holistic, multifaceted and integrated transport and mobility supports for those with a disability. Three meetings of the group have been held, in July, November and December 2023.
The Department of Finance has recently submitted a note to the group with my approval in mid-January 2024. This note outlines a proposal for a replacement scheme for the DDS which would be a needs-based, grant-led approach for necessary vehicle adaptations that could serve to improve the functional mobility of the individual. This proposal is in line with what the NDIS Transport Working Group Report endorsed.
It is expected that this note will be considered by the SOG at a forthcoming meeting of the group. In that context, the Deputy should note that any further changes to the existing DDS would run counter to NDIS proposals to entirely replace the scheme with a modern, fit-for-purpose vehicular adaptation scheme.
Finally, the Deputy should be aware that while my Department has oversight of the DDS, it does not have responsibility for disability policy, so any decision to put in place a new scheme to replace it will be a matter for Government.
252. Deputy Louise O'Reilly asked the Minister for Finance the revenue raised by the sugar-sweetened drinks tax each year since its introduction, and to date in 2024, broken down by the yield in each band; and if he will make a statement on the matter. [12642/24]
View answerI am advised by Revenue that the receipts raised from the Sugar Sweetened Drinks Tax (SSDT), broken down by applicable SSDT band, are published on the Revenue website at the following link: www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/sugar-tax/index.aspx.
The provisional receipts to the end of February 2024 are €5.7m, made up of €0.1m in SSDT Band 1 (total sugar content between 5mg and 8mg per 100ml) and €5.6m in SSDT Band 2 (total sugar content in excess of 8mg per 100ml).
254. Deputy Pearse Doherty asked the Minister for Finance the goods and services subject to the second reduced rate of VAT; the revenue generated through VAT for each good and service subject to the second reduced rate of VAT in 2021 and 2022; and the projected revenue generated through VAT for each good and service subject to the second reduced rate of VAT in 2023 and 2024. [12686/24]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT. Currently, Ireland has two reduced VAT rates of 13.5% and 9%.
From 1 July 2011 onwards, the following supplies are subject to the second reduced rate of VAT (i.e. 9%):
• Periodicals e.g., magazines, sectoral publications, scholarly publications.
• the provision, by a person other than a non-profit making organisation, of facilities for taking part in sport.
From 1 January 2019 onwards, the following supplies are also subject to the second reduced rate:
• certain e-periodicals excluding those which wholly or predominantly devoted to advertising or consist wholly or predominantly of audio or video content.
For the period from 1 May 2022 to 31 October 2024, the following supplies are subject to the second reduced rate of VAT:
• the supply of electricity
• the supply of gas used for domestic or industrial heating or lighting, whether in gaseous or liquid form.
For the period from 1 November 2020 to 31 August 2023, the following supplies were subject to the second reduced rate of VAT:
• catering and restaurant supplies (excluding alcohol, soft drinks and bottled water)
• hot take-away food, and hot tea and coffee
• hotel lettings, including guesthouses, caravan parks and camping sites
• admissions to cinemas, theatres, certain musical performances, museums, art galleries or exhibitions
• amusement services of the kind normally supplied in fairgrounds or amusement parks
• admission to an open farm
• hairdressing services
and
• certain printed matter such as brochures, leaflets, catalogues or printed music (excluding books).
From 1 September 2023 onwards the reduced rate of VAT (i.e. 13.5%) applies to the above supplies.
In relation to VAT revenue, I am further advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide the exact revenue generated from VAT on the goods and services subject to the second reduced rate of VAT using information provided on tax returns. However, a tentative estimate for the revenue from these broad categories of goods and services for the years 2021 to 2024, based on third party sources available to Revenue, is provided below.
|
VAT – Second Reduced Rate of 9% (€m) |
2021 |
2022 |
2023 |
2024 |
|
Accommodation* |
131 |
237 |
192 |
0 |
|
Catering* |
692 |
869 |
648 |
0 |
|
Hairdressing* |
39 |
55 |
38 |
0 |
|
Cinemas, Theatres, Other Entertainment and other* |
23 |
30 |
27 |
0 |
|
Electricity ** |
0 |
193 |
481 |
391 |
|
Gas ** |
0 |
47 |
171 |
124 |
|
Total |
885 |
1,431 |
1,557 |
515 |
*The 9% rate of VAT was applicable to these items throughout 2021 and 2022 until reversion to the 13.5% rate on 31 August 2023.
** The 9% rate of VAT is applicable from 1 May 2022 until 31 October 2024.
255. Deputy Cian O'Callaghan asked the Minister for Finance if the Revenue Commissioners' review of the taxes paid by Irish real estate funds has been completed; and if he will make a statement on the matter. [12700/24]
View answerIn 2022, Revenue commenced a compliance based review of the IREF regime with the aim of identifying the reason(s) for the reduction, primarily but not exclusively in relation to IREF withholding tax paid by IREFs in 2021, in respect of IREF taxable events that occurred in accounting periods ended in 2020 relative to the amount of IREF withholding tax paid in 2020 in respect of taxable events that occurred in accounting periods ended in 2019.
The focus of the review is centred on a detailed analysis of the information contained in the 2020 IREF Financial Statements, IREF Withholding Tax Returns, and Form 1 (IREFs) Income Tax Returns.
The review encompasses the consideration of various risk factors and a key focus is the identification of cases for compliance interventions to ensure perceived tax risks are addressed. The analysis involves detailed examination, evaluation and comparison of tax returns and financial statements for a number of years. The analysis also includes a review of the transactions undertaken by IREFs and of the distributions made in order to ascertain if the distributions have been treated in accordance with the legislative provisions. While the review is on-going, some IREFs reported that the COVID-19 pandemic impacted the value of investment property, and realised/unrealised losses were recorded in the Financial Statements in accounting periods ended in 2020, which may have impacted the level of IREF WHT paid in that period relative to the previous period.
The work involved is highly technical and requires the interpretation and application of complex tax legislation and is not yet complete. If the review identifies any deficiencies in the legislative provisions for IREFs, this will be advised to officials in the Department of Finance.
256. Deputy Jim O'Callaghan asked the Minister for Finance whether services such as yoga, pilates, boxercise and spinning are being afforded a financial advantage over activities such as martial arts and gymnastics, which are required to charge VAT. [12701/24]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within the categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT. The EU VAT Directive also allows for historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III. Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%. Ireland is also permitted to retain some historic VAT arrangements, under strict conditions.
On this basis, martial arts or gymnastic classes have been liable to VAT at the standard rate, currently 23%. Services consisting of the care of the human body, including services supplied in the course of a health studio business or similar business, such as a yoga, pilates, boxercise and spinning, were previously liable to VAT at the reduced rate, currently 13.5%, on the basis of a historical derogation.
Amendments were made to the EU VAT Directive in 2022 which allow a Member State to apply a reduced rate of VAT to certain activities, including the supply of sport or physical exercise classes. The Deputy should note while I did give the matter some consideration, no decision was made in Budget 2024 to reduce the VAT rate on sports and fitness classes.
The Deputy should note that when sports or fitness classes are provided by companies or sole traders who are not registered for VAT because they operate below the VAT registration threshold no VAT is charged.
Finally, as with other VAT rate reductions it should be noted that while the VAT charged must always be correct a company can increase the base price of the service so that the final consumer does not benefit from such a reduction.
257. Deputy Robert Troy asked the Minister for Finance if he will publish a list of the NGOs funded by his Department; and the level the funding each NGO received in the past three years, in tabular form. [12719/24]
View answerI wish to inform the Deputy that my Department does not fund any NGOs.
258. Deputy Carol Nolan asked the Minister for Finance the number of engagements, including online meetings, webinars, briefings and in-person meetings that he or officials from his Department and bodies under the aegis of his Department have had with an organisation (details supplied) including its representatives from 1 January 2019 to date; and if he will make a statement on the matter. [12739/24]
View answerWhile I or my Department have not engaged directly with the National Women’s Council of Ireland (NWCI) during the specified timeframe, the NWCI is a participant in the National Economic Dialogue, which is annually hosted jointly by my Department and the Department of Public Expenditure, NDP Delivery and Reform.
In relation to the bodies under the aegis of my Department, the Central Bank of Ireland has advised that in 2022, it had one engagement with a member of the NWCI. In October of 2022, the Central Bank published a Discussion Paper on the Consumer Protection Code. In line with the Bank’s strategic objective of being Open and Engaged, and its desire to gather feedback and insights from its broad range of stakeholders across civil society, industry and state agencies, this launch, and the six-month engagement programme which followed, sought to include representatives from a variety of consumer and industry representative groups. An in-person event took place in October 2022 in order to engage with the public on this Paper, and the Director of the NWCI attended this event.
259. Deputy Duncan Smith asked the Minister for Finance to give consideration to committed couples including those with children being jointly assessed for tax purposes and in addition being able to apply for home carer tax credit without being married or being in a civil partnership (details supplied); and if he will make a statement on the matter. [12754/24]
View answerI note that the Deputy has referred to committed couples. For the purpose of this reply it is assumed he is referring to cohabiting couples.
Where a couple is cohabiting, rather than married or in a civil partnership, they are treated as separate and unconnected individuals for the purposes of income tax. Each partner is a separate entity for tax purposes, therefore, cohabiting couples cannot file joint assessment tax returns or share their tax credits and tax bands in the same manner as married couples.
The basis for the current tax treatment of couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income. The Constitutional protection of Article 41.3.1 does not extend to non-married couples.
The home carer tax credit can only be claimed by couples who are married or in a civil partnership and have elected to be jointly assessed to tax, where either spouse or civil partner, the ‘home carer’, cares for one or more dependent persons.
It is important to point out that if the tax treatment of married couples was to be extended to cohabiting couples, consideration would need to be given to the practicalities that would arise for Revenue if they were to administer such a system.
It would be very difficult for Revenue to administer a regime for cohabitants, similar to that for married couples. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting and to establish when cohabitation started or ceased.
There would also be issues with regard to ‘connected persons’. To counter tax avoidance, ‘connected persons’ are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce in respect of persons connected with a cohabiting couple where the couple has no legal recognition.
To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage.
There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band, the ability to transfer certain tax credits and entitlement to the home carer tax credit in specific circumstances. However, the legal status for married couples has wider consequences from a tax perspective both for themselves and persons connected with them.
Therefore, any changes in the tax treatment could only be considered in the broader context of the tax system and future social and legal policy development, given that the legal status of married couples has wider consequences than from a tax perspective.
The tax treatment of couples was reviewed and considered as part of the 2020 Tax Strategy Group process. The Income Tax TSG Paper included an overview of the tax treatment of couples and outlined the rationale for the different treatment between married couples/civil partnerships and cohabiting couples. Further details can be located at the following link - www.gov.ie/en/publication/fdd38-budget-2021-tsg-papers/
It should be noted that the recent report of the Commission on Taxation and Welfare put forward no recommendation regarding the tax treatment of cohabiting couples. However, it did recommend a phased move towards individualisation of the Standard Rate Cut Off Point as a step towards addressing disparities in the income tax system, facilitating increased employment, and decreasing the gap in the employment rate between men and women.
Should this occur, couples that are married or in a civil partnership would no longer be treated differently to cohabitants as each person would be treated as a single taxpayer without the option of being jointly assessed.
It should be noted that both the PRSI and USC are already applied on an individualised basis.
Finally, I have no immediate plans to amend the tax treatment of cohabitating couples.
260. Deputy Peter Burke asked the Minister for Finance if he has plans to extend benefit-in-kind taxation from January 2025; and if he will make a statement on the matter. [12783/24]
View answerI am answering this question in reference to the temporary changes to vehicle BIK provided in sections 7 and 8 in Finance Act (No. 2) 2023.
The Government remains committed to the environmental rationale behind the current emissions-based vehicle benefit-in-kind (BIK) regime, which has been in operation since 1 January 2023. Since this date, the amount taxable as BIK continues to be determined by the car’s Original Market Value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands determine whether a standard, discounted, or surcharged rate is taxable. Battery Electric vehicles (BEVs) benefit from a preferential rate of BIK, ranging from 9-22.5% depending on mileage, while fossil-fuel vehicles are subject to higher BIK rates, up to 37.5%. This new structure with CO2-based discounts and surcharges is designed to incentivise employers to provide employees with low-emission cars.
However, as the new emissions-based regime resulted in significant BIK increases for many high mileage and/or above average emission vehicles, given the broader inflationary context, temporary changes to BIK were introduced as part of Finance Act 2023. This temporary change comprised of a universal relief of €10,000 being applied to the OMV of vehicles in Category A-D, in order to reduce the amount of BIK payable. Additionally, the lower mileage limit in the highest mileage band was reduced by 4,000 km, so that the highest mileage band is entered into at 48,001 km.
The BIK relief was introduced as a temporary measure, which remained in place until 31 December 2023. An extension of this measure was announced as part of a cost of living package in Budget 2024. The measure is due to expire on 31 December 2024 and there are currently no plans to extend the €10,000 deduction.
In addition to the favourable treatment for low emission vehicles in the new BIK structure, Budget 2024 also extended the EV tapering mechanism applied to BIK relief for electric vehicles of €35,000 to end 2025, with reductions of €20,000 in 2026 and €10,000 in 2027. This measure forms part of a broader series of generous tax related measures for BEVs, including a reduced rate of 7% VRT, a VRT relief (to end 2025), low motor tax of €120 per annum, and 0% BIK on electric charging.
261. Deputy Eoin Ó Broin asked the Minister for Finance if the National Asset Residential Property Service long-term leased properties have been transferred to the LDA; and if not, when this transfer will take place. [12847/24]
View answerAs the Deputy is aware, National Asset Residential Property Services (NARPS) was created by NAMA to acquire housing units for onward long term lease to Approved Housing Bodies and Local Authorities. Following a review of NAMA in 2019, as required under Section 227 of the NAMA Act, NAMA was directed by my predecessor to retain NARPS and its portfolio of 1,366 residential properties in permanent state ownership.
‘Housing for All’ includes a commitment to agree the process for the transfer of NARPS from NAMA to the Land Development Agency (LDA). In line with this commitment, it was agreed in principle that the transfer will take place by way of a legislative amendment to the LDA Act 2021, subject to Government and Oireachtas approval.
The timeline for the transfer of NARPS to the LDA is therefore subject to the approval and timing of legislative amendments to the LDA Act 2021. Any necessary amendments to the LDA Act 2021 must be brought forward by the Minister for Housing, Local Government and Heritage and the timing of such amendments will therefore be determined by that Department. I remain mindful of the timeline for the ultimate dissolution of NAMA by the end of 2025 and my Department will continue to engage with the Department of Housing with the aim of progressing the NARPS transfer within that timeline.
262. Deputy Rose Conway-Walsh asked the Minister for Finance the total number of people paying the domicile levy each year since 2010; the number of non-tax-residents who have paid the domicile levy since 2010; the number of both residents and non-tax residents that were able to use the levy in its entirety against Irish income tax, in tabular form; and if he will make a statement on the matter. [12863/24]
View answerI am advised by Revenue that the total number of individuals who paid the domicile levy for the years 2010 to 2022 are set out in the table below. Domicile Levy returns for 2023 are not due to be filed until 31 October 2024 so there are no figures available for that year.
|
Domicile Levy Year |
No. of Individuals |
|
2010 |
34 |
|
2011 |
32 |
|
2012 |
26 |
|
2013 |
19 |
|
2014 |
13 |
|
2015 |
17 |
|
2016 |
12 |
|
2017 |
19 |
|
2018 |
10 |
|
2019 |
17 |
|
2020 |
16 |
|
2021 |
15 |
|
2022 |
11 |
It is not a requirement to confirm tax residency when completing a Domicile Levy tax return, therefore it is not possible for Revenue to provide the information requested by the Deputy regarding the number of non-tax-residents who paid the domicile levy since 2010. However, of the individuals that paid the Domicile Levy for the years 2010 to 2022 and filed a tax return for 2022, 18 declared they are non-resident in Ireland for tax purposes for the tax year 2022.
I assume the Deputy’s question 'the number of both residents and non-tax residents that were able to use the levy in its entirety against Irish income tax' is seeking the number of individuals who met the income and property criteria for the Domicile Levy but were not liable to the levy as they had paid Irish Income Tax in the relevant year of €200,000. As individuals who paid Irish Income Tax in a relevant year of €200,000 and more are not liable to the Domicile Levy, there are no statistics available on these individuals in this context.
263. Deputy Rose Conway-Walsh asked the Minister for Finance the total number of annual income returns made on a non-domiciled basis each year since 2010; and if he will make a statement on the matter. [12864/24]
View answerI am advised by Revenue that the number of Form 11 income tax returns on which the taxpayer has indicated that they are non-domiciled is set out in the following table. The data is on a taxpayer unit basis, where jointly assessed couples are counted as one unit, and the taxpayer unit is counted where either party to the joint assessment has indicated that they are non-domiciled.
|
Year |
Number of Taxpayer Units/Returns |
|
2021 |
53,900 |
|
2020 |
51,000 |
|
2019 |
47,900 |
|
2018 |
40,700 |
|
2017* |
12,300 |
* The relevant field on the tax return was not a mandatory field in 2017
Tax returns prior to 2017 did not separately capture non-domiciled status, instead the return asked the taxpayer to tick a box only if they were both a) resident and b) non-domiciled, and therefore the data is not comparable to the data for later years. The data for the years 2010 to 2016 are set out in the following table.
|
Year |
Number of Taxpayer Units/Returns |
|
2016 |
7,300 |
|
2015 |
6,100 |
|
2014 |
5,600 |
|
2013 |
4,800 |
|
2012 |
4,300 |
|
2011 |
4,100 |
|
2010 |
4,000 |
264. Deputy Rose Conway-Walsh asked the Minister for Finance the estimated revenue that would be generated, assuming no change in behaviour, if Ireland were to introduce a remittance charge on a euro equivalent basis to the charge that is applied in Britain; and if he will make a statement on the matter. [12865/24]
View answerAn individual who is resident or ordinarily resident, but not domiciled in the State, is subject to the “remittance” basis of tax on foreign income and gains. Under the remittance basis, such individuals pay tax on:
(1) Income and gains arising in Ireland,
(2) Foreign income which they “remit” or bring into the State, and
(3) Foreign gains where they remit into the State the proceeds from the sale which gave rise to the gain.
An individual who is subject to the remittance basis on foreign income or gain is required, under self-assessment provisions, to report the amount of the foreign income or gains which are remitted to the State in a tax return for the year in which the remittance occurs. It should be noted that the remittance basis only applies where such an individual has foreign income or gains for the year.
I understand that the UK has a similar tax regime in place for individuals who are not domiciled in the UK and that where such an individual wishes to claim remittance basis in the UK, they are required, under certain circumstances, to pay a charge to HMRC.
I am informed by the Revenue Commissioners that, for Irish tax purposes, an individual who is not domiciled in the State must state so when completing an Irish tax return. Such individuals are not required to report whether he or she has availed of the remittance basis when completing a return. On this basis, it is not possible to provide an estimate of the revenue which would be generated by the introduction of a remittance charge (similar to the charge applied in the UK) in Ireland, as appropriate statistics are not available to confirm the numbers of taxpayers who avail of the remittance basis of tax.
265. Deputy John Lahart asked the Minister for Finance to discuss any plans for the restoration of tax exemption liability that was in place before the economic crash; and if he will make a statement on the matter. [12866/24]
View answerAs the Deputy will be aware, the age exemption applies for any year of assessment where an individual is aged 65 years or over and his or her total income does not exceed €18,000 per annum. Where an individual is a married person or civil partner and is jointly assessed to tax, the age exemption will apply where either individual is aged 65 or over and where the couple’s total income does not exceed €36,000 per annum. The relevant income thresholds may be increased further if the individual has a qualifying child. The thresholds are increased by €575 in respect of both the first and second child, and €830 in respect of each subsequent child.
It is important to note that marginal relief may be available where the individual’s or couple’s income exceeds the relevant exemption limit but is less than twice that amount. Where marginal relief applies the individual or couple is taxed at 40 per cent on all income above the exemption limit to a ceiling of twice the exemption limit. The system of marginal relief ensures that in cases where an individual's or couple’s income rises above the exemption threshold that their net income will not decline, as the 40 per cent income tax rate only applies to the proportion of income above the threshold. Once the income exceeds twice the exemption limit marginal relief is no longer available and the individual pays tax under the normal tax system.
It should be noted, however, that where the individual’s income is greater than the exemption limit but below twice that limit, the taxpayer is entitled to the benefit of the more favourable treatment as between the use of marginal relief or the normal tax system of credits and bands.
I have no plans to increase the age exemption limits. However, it should be noted that in circumstances where the individual or couple no longer benefits from the age exemption or marginal relief, they will benefit from the increases to the main personal tax credits in recent Budgets.
For example, the increases to the main personal tax credits in Budget 2024 (€100 increase to the single, employee and earned income credits and a €200 increase to the credit for married couples / civil partnerships) means that the effective entry point to income tax has increased for all taxpayers, including those aged over 65. From 2024, the effective entry point to income tax for an individual in receipt of the single person credit, employee / earned income credit and the age credit has increased by €1,000 per annum from €18,975 to €19,975 per annum.
In addition, it is important to take into account that the current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. For example, persons aged 65 or over may also avail of the age tax credit, which currently amounts to €245 per year for single persons or €490 per year for married couples or civil partners. Reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less. In addition, it is important to point out that social welfare income such as the State Contributory Pension and State Non-Contributory Pension are excluded from the calculation when determining if an individual’s income has exceeded the €60,000 income threshold. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or Pay Related Social Insurance.
Finally, it should be noted that the Commission on Taxation and Welfare recommended that age should be removed as a factor for determining the charge to income tax and USC. The report stated that the determination of an individual’s tax treatment based on age narrows the base and breaches the concept of horizontal equity, whereby those with similar income should pay the same proportion of that income in taxes. It also breaches the concept of intergenerational equity. Further details are set out in the Report of the Commission, located at the following link - www.gov.ie/en/publication/7fbeb-report-of-the-commission/.
As part of the Personal Tax Review published on Budget Day, my Department set out further analysis of the recommendations of the Commission on Taxation and Welfare, including in respect of the age exemption limits. The Report is available at the following link - www.gov.ie/pdf/?file=https://assets.gov.ie/273335/96f70eb1-64e1-4f02-9096-e36f306a048b.pdf#page=null.
