Written Answers Nos. 61-80
61. Deputy James Geoghegan asked the Minister for Finance if he can provide an update in respect of measures proposed in the report of the Commission on Taxation and Welfare relevant to his Department; and if he will make a statement on the matter. [15838/25]
View answer‘Foundations for the Future’, the Report of the Commission on Taxation and Welfare, was published in September 2022. The report is wide-ranging and contains 116 recommendations relating to the future of Ireland’s taxation and welfare systems.
In its terms of reference the Commission was asked to independently consider how best the taxation and welfare systems can support economic activity and promote increased employment and prosperity while ensuring that there are sufficient resources available to meet the costs of the public services and supports in the medium and longer term. The Commission clearly set out in its report that the recommendations are not intended to be implemented all at once, but rather provide a clear direction of travel for future Governments around how the sustainability of the taxation and welfare systems may be improved in a fair and equitable manner.
I would also like to acknowledge the work on the Committee on Budgetary Oversight which examined the work of the COTW and that committee’s report, which was laid before the Dáil last year, provides valuable insight and a number of additional recommendations to be considered alongside the COTW report itself.
A number of legislative actions, reports and reviews have been undertaken in my Department since the publication of the COTW report. These actions include a review of Ireland’s personal tax system and a review of share-based remuneration and several legislative changes arising have also been made in recent Finance Acts including changes to Capital Gains Tax Retirement Relief and Capital Acquisitions Tax. A new capital gains tax relief for angel investors aimed at leveraging investment in innovative SMEs has been implemented.
In October 2024, my predecessor published the ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’, a wide-ranging review of the funds and asset management sector. The Review fulfilled two of the recommendations of the Commission on Taxation and Welfare 2022 report. The Report arising from the Review sets out a series of recommendations to ensure that, in pursuit of continued growth in the funds and asset management sector, Ireland’s funds sector framework remains resilient, future-proofed, supportive of financial stability and a continued example of international best-practice. Officials in my Department are reviewing these recommendations and related follow on actions, which I will consider in due course.
My Department is also focused on and committed to improving how Tax Expenditures are reported and evaluated. Officials have worked closely with Revenue to implement COTW recommendations in this area. The Department committed in 2022 to a formal review of the 2014 Tax Expenditure Guidelines and arising from this, the Tax Expenditure Evaluation – Updated Guidelines were published in October 2024 and set out best practice for the evaluation and reporting of tax expenditures.
In addition to the updating of the Guidelines, officials have undertaken a significant amount of work to improve the Department’s Annual Report on Tax Expenditures. Data availability, enhanced reporting and transparency are key for evaluation. Details of a forthcoming publication, the tax expenditure ‘passport’, are contained in the Guidelines. This new publication will further help improve transparency in the reporting of tax expenditures.
In relation to progress on recommendations relating to indirect taxes, the Government is committed to increasing the amount that is charged per tonne of carbon dioxide emissions from fuels to €100 by the end of this decade as recommended by the Commission. The annual increases in the carbon tax have been implemented to date as legislated for in Finance Act 2020. A phased removal of the diesel excise gap as well as other fossil fuel subsidies in the road transport sector was also examined in the 2024 Tax Strategy Group Paper, Energy and Vehicle Taxation. Finance Act 2024 introduced an emissions-based VRT system for category B vehicles (generally light commercial vehicles) which will apply from 1 July 2025.
In relation to the use of taxation in promoting public health, excise duty on tobacco products has increased consistently over the past decade and Budget 2025 provided the highest increase in excise, at a rate of €1 on 20 pack cigarettes in the Most Popular Price Category (MPPC). Additionally, legislation for E-Liquid Products Tax (EPT) was enacted in Finance Act 2024 and is subject to commencement by Ministerial Order. I expect to commence EPT later this year.
In relation to Corporation Tax, a participation exemption for foreign dividends was introduced into the Irish Corporate Tax System in Finance Act 2024. This measure will greatly simplify cross-border double tax relief, and work will take place this year to consider expanding the geographic scope of the rules.
As announced in Budget 2025, a review of the R&D tax credit is currently being undertaken as part of the regular schedule of tax expenditure reviews.
The Commission also recommended that revenues deriving from Local Property Tax (LPT) should increase to form a substantially larger share of total revenues. On Tuesday, Government approved proposals to moderately increase LPT charges, with yield projected to increase by approximately 8% in 2026 as a result.
The Commission further recommended that an LPT surcharge should be introduced for vacant properties. Finance Act 2022 introduced a new Vacant Homes Tax (VHT), charged at a multiple of a property’s base LPT charge. The rate of VHT payable has since been increased twice, most recently in Finance Act 2024, with the tax applying at a rate of seven times a property’s base LPT charge with effect from the chargeable period that commenced on 1 November 2024. VHT is payable in addition to LPT on properties which are occupied for less than 30 days in a 12-month period.
Consistent with the Commission’s recommendations two long term funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund were commenced in August of last year. These funds aim to safeguard & protect future State investment in public services & infrastructure. These new funds enable the State to deal with future challenges and expenditure pressures, while, at the same time minimising the risk of using volatile windfall taxes to fund permanent spending.
Considerable progress has been made on many areas of the Commissions work and the Commission’s Report will continue to provide a clear direction of travel for this and future Governments.
62. Deputy Martin Daly asked the Minister for Finance the action he will be taking to complete the task of normalising the domestic banking system to best serve the interests of the economy; and if he will make a statement on the matter. [16310/25]
View answerAs the Deputy is aware, Government policy has always been that the banks, in which the State took a stake during the financial crisis, should be returned to private ownership. This is a long-standing policy, and significant progress has been made to achieve this goal. The State fully exited its ownership of Bank of Ireland in 2022 and has since reduced its shareholdings in AIB and PTSB to c.12% and c. 57.4% respectively from over 99% in each case.
Recovering taxpayer funds which were used to rescue the banks, allows us to put that money to more productive purposes for our citizens. Full recovery of the €29.4bn that went into the three banks is a realistic target. The State is currently c. €200m above breakeven on a mark to market basis as of 28 March 2025 (this is taking into account current market valuations of the remaining shareholdings in AIB and PTSB).
It is now a realistic target that the State could exit its position in AIB later this year should market conditions allow. As announced at the banks 2024 annual results, shareholder approval will be sought at the AGM in May in relation to a €1.2bn directed buyback with the State which will further reduce the shareholding level.
As Minister for Finance, I am conscious that the relationship between the State and the banks will need to be normalised as our shareholdings continue to reduce, which means considering the removal of the crisis-era measures which continue to be still in place. This is in line with the Programme for Government commitment of completing the task of normalising the domestic banking system to best serve the interests of the economy.
63. Deputy Emer Currie asked the Minister for Finance the number of childminders who have made a claim under the childcare services relief for each of the past five years 2020-2025; his views on the effectiveness of this relief; and if he will make a statement on the matter. [16254/25]
View answerThe Government acknowledges the continuing cost pressures on parents, particularly those with young children. In recognition of these cost pressures, a number of support measures are in place to ease the burden on working parents. These include various tax-exempted child-care related supports provided by the Minister for Children, Equality, Disability, Integration and Youth and measures such as the Working Family Payment provided by the Minister for Social Protection.
Childminders who provide child-minding services in their own home may claim Childcare Services Relief each year, provided that they do not receive more than €15,000 income per annum from the child-minding income.
I am advised by Revenue that the numbers of taxpayer units who availed of the Exemption of Income arising from the Provision of Childcare Services between 2006-2022 are published online on Revenue’s website at:
www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/cost/index.aspx
The following table sets out data on the number of taxpayer units availing of the Childcare Services Relief, together with the Exchequer cost of the relief for the years 2020 - 2022 (the latest year for which data are available).
|
Year |
Exchequer Cost €m |
Number of Taxpayer Units |
|
2022 |
1.4 |
530 |
|
2021 |
1.2 |
570 |
|
2020 |
1.1 |
670 |
With regard to other taxation measures, and separate to the above:
• A Single Person Child Carer tax credit of €1,900 is available as well as an additional standard rate band of €4,000. Subject to meeting the relevant conditions, this credit and increased rate band is payable to a single person with a child under 18 years of age or over 18 years of age if in full time education or permanently incapacitated. The primary claimant may relinquish this credit and increase in the rate band to a secondary claimant with whom the child resides for not less than 100 days in the year.
• The Accelerated Capital Allowances scheme for Childcare Services was introduced to encourage employers to develop childcare facilities onsite for their employees.
64. Deputy Mattie McGrath asked the Minister for Finance the steps he is taking to reduce the cost of insurance; if he will reconsider the proposed increase in personal injury awards by 17%; and if he will make a statement on the matter. [15087/25]
View answerI wish to assure the Deputy that the Government is fully committed in the new Programme For Government - Securing Ireland’s Future to further action to drive down insurance costs impacting households, motorists and businesses. A new Action Plan for Insurance Reform is in development which will focus on encouraging further competition in the market and working with stakeholders to enhance transparency and affordability across all types of insurance. This will build on the significant progress made under the previous Action Plan.
In relation to the Personal Injuries Guidelines, they are developed by the Judicial Council, which is independent in its functions. While this matter falls within the remit of the Minister for Justice, I as Minister for Finance, fully appreciate its significance for insurance provision and the potential implications for recent insurance reform efforts to bring down the cost and increase the availability of insurance for consumers, businesses and the community and voluntary sector.
The Deputy may be aware that the Central Bank of Ireland recently published the National Claims Information Database (NCID) Employers’ Liability, Public Liability and Commercial Property Report 4. The NCID data demonstrates that the Personal Injuries Guidelines are having a positive effect, with the Injuries Resolution Board being the fastest and most cost-effective method of resolving personal injury claims.
My officials have and continue to engage with Department of Justice on the proposed amendments to the Personal Injuries Guidelines and their potential impact on the Government insurance reform agenda. I recently met with the Minister for Justice to discuss the Guidelines in the context of recent developments and to consider what actions Government now needs to take in this matter. From my engagement, I understand that the Minister for Justice is reflecting on the matter, and I will await the outcome of those reflections. Additionally, Minister of State Troy has commenced a process of engagement with key stakeholders, including Insurance Ireland and major insurers, to ensure reform-driven savings lead to lower premiums and broader coverage.
Seeking to secure a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key priority for this Government. Government policy remains focused on ensuring that the benefits arising from the entire reform programme are realised, for consumers, businesses and community groups across Ireland.
65. Deputy Paul Murphy asked the Minister for Finance if he will reverse his decision to abolish cost-of-living supports in the next Budget; and if he will make a statement on the matter. [16153/25]
View answerGovernment has not made any decision regarding the parameters for Budget 2026. Decisions on fiscal policy will be considered through the normal budgetary process, with the parameters for Budget 2026 being set out in the Summer Economic Statement, which Government will publish later this year.
66. Deputy Brendan Smith asked the Minister for Finance how he is working to position credit unions as community-centric financial institutions integral to their local communities, small businesses and farmers; and if he will make a statement on the matter. [16083/25]
View answerThe Government acknowledges credit unions as community centric financial institutions integral to their local communities, small businesses and farmers. This Government has a dedicated Minister for Financial Services, Credit Unions and Insurance, Minister Robert Troy T.D.
The Government has a multi strand approach to help support the development of the credit union sector.
The Retail Banking Review published in November 2022 outlined that credit unions could play a greater role in the provision of retail banking products and services in the coming years.
My officials, together with credit union stakeholders worked collaboratively to deliver the Credit Union (Amendment) Act 2023. The Act represents a very significant piece of legislation that will have far-reaching positive implications for the credit union sector in the years to come.
The 2023 Act increased flexibility around the common bond, opening up opportunities to expand membership and services with options such as referrals and loan participations. It will also allow for corporate credit unions to be formed. These are credit unions whose members are other credit unions. The majority of provisions of the 2023 Act have commenced. Provisions yet to be commenced are in relation to Credit Union Service Organisations (CUSOs) and the corporate credit union.
To support the sector my predecessor, Minister McGrath requested that the Credit Union Advisory Committee (CUAC) review implementation of the 2023 Act. CUAC will assess progress in implementation, gather data on activity under select areas and highlight any barriers or challenges to utilising the 2023 Act. CUAC have completed their first report and I am currently considering its findings.
The 2023 Act will help the sector, but as outlined in Retail Banking Review, credit unions must develop their strategy and increase collaboration to reach their potential.
The Government received a significant level of feedback on the Central Bank of Ireland’s Lending Regulations and its impact on the credit union sector. I would like to highlight the work that previous Ministers of State did in communicating the sector’s concerns to the Central Bank of Ireland. The Central Bank of Ireland have listened to these concerns and I welcome the proposed changes published under Consultation Paper 159 - Consultation on Proposed Changes to the Credit Union Lending Regulations. The proposed amendments will enable credit unions to provide more house lending and business loans to its members.
The “It Makes Sense” loan is a small credit union loan available to people on low incomes. Credit union members can repay the loan through the Household Budget Scheme if they get their social welfare payment at a post office. The Household Budget Scheme is a scheme that helps people getting certain social welfare payments to spread the cost of some household bills over the year. My thanks to Minister Calleary and his predecessor in the Department of Social Welfare for supporting this initiative and funding credit unions for the cost of providing this service.
The Credit Institutions Resolution Fund was established under the Central Bank and Credit Institutions (Resolution) Act 2011 to support resolution actions in the State. This fund is managed and administered by the Central Bank of Ireland. The levy rate for credit unions for the Credit Union Institutions Resolution Fund for 2025 was set at 0%. This was decided on the basis that the target size of €65 million for the fund would be met in 2025 with further income interest earned.
The stabilisation support scheme for credit unions was a recommendation of the 2012 Report of the Commission on Credit Unions. The purpose of the Stabilisation Scheme is to have funds available, if needed, to assist credit unions whose reserves have temporarily fallen below the 10% minimum statutory reserve requirement but are otherwise considered by the Central Bank to be potentially viable.
The Department of Finance prepares the annual Levy Regulations following consultation with the Central Bank and the Credit Union Advisory Committee. These regulations come into force on 30 September each year and prescribe the rate of contribution or method of calculating the rate of contribution to the Resolution Fund.
In September 2023, my predecessor, Minister McGrath requested that the Department complete a comprehensive review of both the Credit Union Resolution and Stabilisation funds. A consultation paper was issued to the sector in July 2024 with a closing date for submissions of 27 September 2024. The feedback from this consultation process is being considered by the Department as part of its overall review of the funds. This will inform the future structure and use of the Funds.
My Department convenes and chairs on a quarterly basis a meeting of departmental officials, the Central Bank of Ireland and the Representative and Associate bodies, ILCU, CUDA, CUMA and the NSF. This provides a forum to discuss credit union issues and the development of the credit union sector.
As outlined in the Programme for Government, this Government will support the sector in developing a strategy to ensure credit unions can fully leverage new opportunities. However, this will require leadership and significant collaboration in the sector. This is highlighted Retail Banking Review which states that “...the credit union sector and its leadership should develop a strategic plan to deliver business model changes that would enable the sector to safely and sustainably provide a universal product offering to all credit union members.”
Minister Troy is currently considering the most appropriate path forward to deliver an effective strategy for the sector.
67. Deputy John Connolly asked the Minister for Finance in the context of the considerations of the ESRI that a potential change in the taxation policy of the United States could adversely affect Irish corporation tax receipts, the action he is taking to mitigate the possible impact of such a change; and if he will make a statement on the matter. [16244/25]
View answer69. Deputy Paul Murphy asked the Minister for Finance the steps he plans to take to compensate for potential reductions in Government revenues as a result of US tariffs; and if he will make a statement on the matter. [16152/25]
View answerI propose to take Questions Nos. 67 and 69 together.
My Department and the ESRI recently published an analytical paper which included the modelling of potential tariff scenarios and the impacts on the Irish economy. The analysis focuses on the impact of tariffs and does not estimate the impact of certain broader protectionist measures, including potential changes to the US tax code. While the latter could have a material impact on the Irish economy, it is difficult to model given inter alia the important role of firm-specific factors, as well as the lack of certainty at the current juncture.
The analysis shows that Modified Domestic Demand – the most meaningful metric for the Irish economy – would be between 1-2 per cent below its no-tariff baseline level over the medium-term depending on the extent of tariffs.
The potential impact on GDP is larger, estimated at around 2½ to almost 4 per cent below a no-tariff baseline, although changes in GDP have less of an impact ‘on the ground’. The slowdown in domestic growth would be accompanied by lower-than-assumed employment growth, which is expected to be around 2 to 3 per cent lower compared to a no-tariff baseline.
Importantly, the paper does not account for changes to the firm- and sector-specific factors that have produced ‘windfall’ corporation tax receipts in recent years. As a result, the main focus of the paper is on estimating the impact on the economy rather than the public finances.
Given the scale of the increase in corporation tax receipts in recent years, and the concentration of receipts, it is important to ‘stress test’ the public finances to understand the potential implications of a reversal of these flows.
My Department published a number of general corporation tax scenarios in the Medium-term Fiscal and Structural Plan in October 2024 to illustrate the potential impact on the public finances. For example, if corporation tax receipts were to flatline at 2024 levels this would lower the General Government Surplus by almost €8 billion over the medium-term relative to the Budget 2025 baseline projections. In a more severe scenario where corporation tax receipts reverted to 2020 levels by 2030, all else equal, this would lead to a deficit of almost €15 billion by the end of this decade.
There has been significant progress made in recent years in mitigating the risks around corporation tax. Indeed, the Future Ireland Fund and Infrastructure, Climate and Nature Fund both enable Government to prepare for future fiscal challenges and, at the same time, remove a large portion of ‘windfall’ receipts from the day-to-day expenditure base. Ultimately, the best way to mitigate the risk of an over-reliance on potentially transient windfall revenues is to keep public expenditure growth at sustainable levels, which will be achieved by following the appropriate budgetary strategy.
68. Deputy Brian Stanley asked the Minister for Finance the profit obtained by the State from the sale of bank shares in 2024 and 2025; and if he will make a statement on the matter. [16079/25]
View answerAs the Deputy is aware, €29.4bn was invested in AIB, BOI and PTSB over the period 2009 to 2011. To date, c. €27.4bn has been recovered in cash by way of disposals, investment income and liability guarantee fees. The remaining investments in the banks are currently valued at c. €2.2bn (as at close of business on 28 March 2025) meaning the State is c. €200m above breakeven on its investment in the three banks on a cash-in/cash-out basis.
I have outlined below details of the various share sales (share trading plan, share buybacks and accelerated bookbuild transactions) which transacted successfully during 2024 and YTD in 2025. Please note that all of the share sales outlined below are AIB share sales.
|
Year |
Share Sale |
Average Price per Share |
Proceeds |
|
2024 |
Trading Plan (phase 5) |
€4.80 |
€620.7m |
|
2024 |
Share Buyback |
€5.04 |
€999m |
|
2024 |
ABB 5 |
€4.90 |
€592.9m |
|
2024 |
Trading Plan (phase 6) |
€5.37 |
€628.2m |
|
2024 |
Share Buyback |
€5.45 |
€500m |
|
2025 |
ABB 6 |
€5.60 |
€652.1m |
|
€3,992.9m |
Please note that phase 7 of the AIB share trading plan is currently operational and runs until July 2025.
As I announced on Monday 31 March 2025, I have agreed in principle to AIB's latest share buyback proposal. The transaction, subject to shareholder approval and market conditions, will see the bank acquire €1.2bn of its shares from the State by way of an off-market purchase. It is expected that the buyback will be completed shortly after AIB’s Annual General Meeting on 1st May 2025. The minimum price this share buyback will transact at will be €6.26 per share.
The State also holds warrants which were issued by AIB following the IPO of the bank in June 2017 and Department of Finance officials have commenced exploratory discussions with AIB on a buyback of these warrants, while also examining other available options.
The State continues to be majority shareholder in PTSB with a shareholding of 57.4% worth approximately €500m. The Minister for Finance will assess any opportunities for possible share sales in PTSB should they arise. The financial position at PTSB has improved substantially with the bank demonstrating continued progression at the announcement of their FY2024 annual results which were released recently.
71. Deputy Thomas Gould asked the Minister for Finance to report on the latest briefing he received from his Department on the delivery of housing. [15232/25]
View answerGiven its economic and fiscal implications, my Department prepares regular monthly updates on the housing market in order to keep me fully informed regarding the latest developments in this crucial sector.
In the interests of transparency, these updates are posted on my Departments website.
The update for March will be posted on the website this week. The most notable features in the March update are the moderation in property price inflation, the record number of mortgage drawdowns and the fall in commencement notices, the latter being due to the very high levels recorded last year.
72. Deputy Naoise Ó Muirí asked the Minister for Finance his views on the way Ireland’s taxation system could help citizens mitigate risks with regard to the impact of climate change as identified in the Climate Change Risk Matrix as published by his Department; and if he will make a statement on the matter. [15670/25]
View answerAs the Deputy may know, taxation policy with regard to greenhouse gas emissions is largely based on the polluter-pays principle, whereby high emission energy products, fuels or vehicles are subject to the highest levels of taxation. National taxation measures are reviewed and examined as part of the annual budgetary cycle and the policy options considered are published in the Tax Strategy Group papers each year.
The taxation system has an important role in supporting efforts to transition to a low carbon economy and, over the past number of years, we have brought in a number of environmental taxation reforms including legislating for increases in the carbon tax, as well as climate-proportionate changes to the vehicle registration tax and motor tax regimes. In particular, I view the implementation of the statutory trajectory for increasing the carbon tax to €100 per tonne by 2030 as a central building block of our national decarbonisation taxation strategy.
As deputies will be aware, Government is committed to a carbon tax regime that is progressive with revenue raised from increases in the carbon tax since 2020 being hypothecated and thereby allocated for expenditure on climate action and the Just Transition. The additional revenue raised by increasing the carbon tax is ring-fenced and used to enable transitional changes, to encourage the greening of agriculture and to provide targeted social welfare and other measures to prevent energy poverty.
Research published by the ESRI in relation to this treatment of the carbon tax revenue shows that poverty can be reduced in this way, with a fifth of households left better-off by using a third of revenues from a carbon tax rise on targeted increases in welfare payments. This helps ameliorate the potentially regressive impact of an uncompensated carbon tax rise.
€951 million of carbon tax revenue was allocated as part of Budget 2025 to climate action measures, sustainable farming, and to ensure the most vulnerable are protected from unintended impacts of the tax increase. This represents an increase of €163 million on the amount funded from the carbon tax increases in 2024.
Taxation policy is also supporting other areas of the climate transition. For example, in support of our retrofitting targets, my Department introduced a tax deduction of up to €10,000 per property for small-scale landlords who undertake retrofit works while the tenant remains in situ, and in support of our renewables targets the VAT rate on the supply and installation of solar panels for private dwellings is zero, with this measure also extended to schools as part of Budget 2024.
With regard to my Department’s climate change risk matrix, this provides a high level overview of how climate change physical and transitional risks are interlinked to the economy and to the financial system through a range of transmission channels. This framework forms part of work that my Department is conducting to model and refine our understanding of climate-related economic, fiscal and financial risks, and is in line with the requirement set out in the Programme for Government that all Departments should make climate action a core pillar of their new strategies.
73. Deputy Cian O'Callaghan asked the Minister for Finance if he will ensure that owners of vacant commercial property are not able to write off their commercial rates obligations as business expenses; and if he will make a statement on the matter. [16241/25]
View answerI am advised by the Department of Housing, Local Government and Heritage that Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by Tailte Éireann under the Valuation Acts 2001 to 2020.
Rates income is a very important contribution to the cost of services provided by local authorities such as roads, footpaths, the public realm, litter management, public lighting, development control, parks and open spaces; all essential elements to create the environment in which businesses can prosper. Local authorities are fully aware of the challenges facing many ratepayers and work with ratepayers to agree flexible payment options that reflect capacity to pay.
The Local Government Rates and Other Matters Act 2019 Act contains provisions to add to the suite of options already available to local authorities to support local businesses and ratepayers. These include a new rates vacancy abatement, to be decided by local authority members. The vacancy abatement scheme allows the local authority scope for targeted policies in respect of vacant commercial properties. Consideration can be given to the prevailing local economic environment and prevalence of commercial vacancy. Vacancy abatement schemes may be tailored to particular towns, zones within towns, types, or categories of vacant property or circumstances of the vacant property ratepayer.
As outlined to the Deputy in reply to Parliamentary Question No. 338 on 22 January last (1207/25), I am also advised by Revenue that, as a general rule, commercial rates are deductible for tax purposes. In accordance with section 4(4)(a) Local Government Rates and Other Matters Act 2019 as amended by section 263 Historic and Archaeological Heritage and Miscellaneous Provisions Act 2023, the “liable person” for commercial rates is usually the occupier of the premises. In circumstances where a commercial unit is vacant, it is most likely the owner of the property will be the liable person as the person entitled to occupy the property.
Section 97(2)(b) Taxes Consolidation Act 1997 (TCA) permits a deduction from rental income for rates levied by local authorities. However, if a property has been vacant for a lengthy period, the “uneconomic rent” provision in section 75(4) TCA may apply. An “uneconomic rent” is one where the lessor’s obligations and insurance, maintenance, management and repairs expenses consistently exceed the rent derived from the property. If the rent from a vacant commercial property is categorised as an “uneconomic rent”, sections 75, 97 and 384 TCA are disapplied, which means deductions for expenses, including rates, cannot be claimed, and losses from that property cannot be set against profits from other properties, and cannot be carried forward. Further information relating to “uneconomic rents” is available in paragraph 3 of Tax and Duty Manual 04-08-14: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-08-14.pdf .
In cases where there isn’t a long-term vacancy, in general, expenses incurred (including rates) between lettings may be deducted provided the property was not occupied by the landlord following the termination of the letting, and is subsequently let again by the same landlord.
When rates are levied on a person carrying on a trade or profession, the rates are deductible where they represent a cost to the business and are incurred wholly and exclusively for the purposes of the trade or profession. It is possible, depending on the particular facts and circumstances, that rates incurred in relation to a vacant commercial unit could be regarded as being incurred wholly and exclusively for the purposes of the trade or profession. This will be the case, for example, where the commercial unit is vacant for a temporary period pending a ramping up of activities. This deduction is available in accordance with section 81 TCA, which sets out the general rules for deductions for the computation of profits or gains arising in respect of trades and professions.
At present there are no plans to change the policy in relation to the deductibility of commercial rates for tax purposes in the case of vacant properties.
74. Deputy Pearse Doherty asked the Minister for Finance the steps he is taking to ensure insurance companies pass on the benefit of lower claims to customers rather than increase profit margins; and if he will make a statement on the matter. [16304/25]
View answerAt the outset, it is important to clarify that neither I nor the Central Bank of Ireland can interfere with the provision or pricing of insurance products, as these are commercial decisions made by individual companies, governed by the EU Single Market framework for insurance (the Solvency II Directive). However I want to assure the Deputy that the Government is committed in the new Programme for Government-Securing Ireland’s Future to further action to drive down insurance costs impacting households, motorists and businesses and to ensuring that insurance companies pass on the benefits of the reform agenda to customers in the form of reduced premiums.
The most recent data from the National Claims Information Database (NCID) shows that employer/public liability and motor insurance have returned to profitability after a number of years of losses. Across the period 2009 to 2023, the industry recorded a profit (as a percentage of total income) of 2.1 percent. In 2023, the market had an operating profit of 13 percent of total income. For private motor insurance, NCID data over the period 2009-2023 shows a 5 percent profit (as a percentage of total income) and the operating profit for 2023 was 8 percent of total income.
The cost of insurance is a multi-faceted issue and premiums are sensitive to global inflationary pressures. For example, employer/public liability insurance is impacted by factors such as construction inflation, business turnover, visitor numbers while the cost of labour and the increasing use of advanced vehicle technology has driven up the cost of vehicle repairs. Consequently, prices vary across the market.
The previous Action Plan on Insurance Reform, published in 2020, delivered significant achievements, most notably the rebalancing of the Duty of Care, reforming the Injuries Resolution Board and the introduction of new Personal Injury Guidelines. In addition, in part due to the more attractive operating environment here, new competitors such as OUTsurance, Revolut and Fastnet have entered the motor insurance market, enhancing competition and capacity. In addition, a number of existing insurers expanded their risk appetite to new areas, including hospitality, SMEs, sports and leisure activities. This represents a vote of confidence in the reforms enacted and the wider insurance market in Ireland. Maintaining a competitive insurance market is essential to ensuring ongoing access to affordable coverage for businesses, community groups, and consumers alike.
Despite these reforms, it is regrettable that insurers have been slow to pass on savings to customers. Minister of State Troy has met with Insurance Ireland and major insurers to stress the Government's expectation that these cost savings must be reflected in lower premiums and broader coverage availability. A key focus of the new Action Plan on Insurance Reform will be prioritising further competition in the market and working with stakeholders, including insurers, to enhance transparency and promote affordability across all types of insurance.
To further enhance transparency and accountability, the Government is prioritising faster data releases from the National Claims Information Database (NCID). The Central Bank is expected to publish a report with H1 2024 data by mid-year, providing insights into premium trends and market developments. This increased transparency is essential to ensuring fair pricing for customers and supporting ongoing policy development.
In conclusion, the Government remains fully committed to monitoring the sector, deepening and widening the supply of insurance and ensuring that the benefits of insurance reforms are fully passed on to consumers, businesses, and community and voluntary groups across Ireland.
76. Deputy Brendan Smith asked the Minister for Finance if he has engaged with the Central Bank to review credit union lending limits to enhance their ability to serve members; and if he will make a statement on the matter. [16084/25]
View answerIt is important to note that there are no limits on personal lending which continues to comprise the vast majority of credit union lending (approximately 86% as at end December 2024).
In January 2020, revised Central Bank Lending Regulations were put into effect on credit union house and business lending only. The Central Bank has recently completed a review and analysis of credit union sector lending three years post-commencement of the amending regulations. This review included significant consultation with credit union stakeholders. The former Minister of State with responsibility for credit unions and my officials had multiple constructive and open engagements with the Central Bank as part of that review.
On 11 December 2024, the Central Bank published Consultation Paper 159 - Consultation on Proposed Changes to the Credit Union Lending Regulations alongside a report on Credit Union Lending (the Review Report) on the Central Bank website. This consultation closed on 11 February 2025.
In the consultation paper, the Central Bank proposed a number of targeted material changes to the credit union lending regulations in the following areas:
• Concentration limits for house and business lending; and
• Lending practices for specific categories of lending.
On the concentration limits for house and business lending, the Central Bank outlined the following proposals for change:
• decouple the limits to prescribe new separate concentration limits for house lending and business lending;
• remove tiering whereby all credit unions regardless of asset size may avail of the same concentration limits;
• adjust the lending capacity available to all credit unions for house and business lending, within the new concentration limits, as follows:
• house lending - 30% of total assets
• business lending - 10% of total assets
These changes would result in significant additional capacity for house and business lending with a potential €8.6 billion in capacity, compared to the €2.9 billion available under the current concentration limits. This will enhance the ability of credit unions to serve their members.
I broadly welcome the proposed changes to the lending framework which will allow for an increase of c. €5.7 billion in capacity across business and house lending for the sector. I am supportive of the changes proposed and I wish to thank the team at the Registry of Credit Unions for their dedication and hard work in developing these proposals.
I also welcome the proposal that the compulsory regulatory requirement for a comprehensive business plan for all business loans above €25,000 will be removed. Credit unions will now be able to apply their respective lending procedures on the requested loan.
The Minister of State with responsibility for credit unions and I both appreciate the importance of these proposed changes to the lending regulations. We will both continue to monitor the consultation process and ultimately the timely implementation of the proposed amendments. I look forward to further engagement with the Central Bank in the second quarter of 2025 as part of the statutory consultation process as required under S84A of the Credit Union Act, 1997.
77. Deputy Ged Nash asked the Minister for Finance his views on the impact the imposition of tariffs by the United States will have on jobs, the economy and the public finances; and if he will make a statement on the matter. [16297/25]
View answer85. Deputy Peadar Tóibín asked the Minister for Finance his Department’s economic modelling in relation to the threatened tariff war. [15631/25]
View answerI propose to take Questions Nos. 77 and 85 together.
My Department and the ESRI recently published an analytical paper which included the modelling of potential tariff scenarios and the impacts on the Irish economy.
The analysis shows that Modified Domestic Demand – the most meaningful metric for the Irish economy – would be between 1-2 per cent below its no-tariff baseline level over the medium-term depending on the extent of tariffs.
The potential impact on GDP is larger, estimated at around 2½ to almost 4 per cent below a no-tariff baseline, although changes in GDP have less of an impact ‘on the ground’. The slowdown in domestic growth would be accompanied by lower-than-assumed employment growth, which is expected to be around 2 to 3 per cent lower compared to a no-tariff baseline.
Importantly, the paper does not account for changes to the firm- and sector-specific factors that have produced ‘windfall’ corporation tax receipts in recent years. As a result, the main focus of the paper is on estimating the impact on the economy rather than the public finances.
Given the scale of the increase in corporation tax receipts in recent years, and the concentration of receipts, it is important to ‘stress test’ the public finances to understand the potential implications of a reversal of these flows.
My Department published a number of general corporation tax scenarios in the Medium-term Fiscal and Structural Plan in October 2024 to illustrate the potential impact on the public finances. For example, if corporation tax receipts were to flatline at 2024 levels this would lower the General Government Surplus by almost €8 billion over the medium-term relative to the Budget 2025 baseline projections. In a more severe scenario where corporation tax receipts reverted to 2020 levels by 2030, all else equal, this would lead to a deficit of almost €15 billion by the end of this decade.
There has been significant progress made in recent years in mitigating the risks around corporation tax. Indeed, the Future Ireland Fund and Infrastructure, Climate and Nature Fund both enable Government to prepare for future fiscal challenges and, at the same time, remove a large portion of ‘windfall’ receipts from the day-to-day expenditure base. Ultimately, the best way to mitigate the risk of an overreliance on potentially transient windfall revenues is to keep public expenditure growth at sustainable levels, which will be achieved by following the appropriate budgetary strategy.
78. Deputy Ruairí Ó Murchú asked the Minister for Finance if he will provide an update on the work being carried out in his Department to fix the anomaly where many workers who live in the North and who work in the South are precluded from working from home because of the significant revenue implications for their employers; if he will detail any contacts his Department has had on the matter with the equivalent British department in the past six months; and if he will make a statement on the matter. [16109/25]
View answerThe tax treatment associated with cross-border working has been subject to ongoing discussions in recent years, particularly given the increase in remote working as a result of the Covid-19 pandemic. However, cross-border working gives rise to complex issues involving shared taxing rights between different jurisdictions.
It should be noted that workers who reside in Northern Ireland and work in the State are not precluded from working from home. The availability of remote working is primarily a matter between the employer and the employee. An employer may allow an employee to work remotely in Northern Ireland, however, such arrangements may result in implications for the employer from a UK tax perspective. As such, any potential implications that may arise from such arrangements are outside the scope of my direct remit and that of my Department.
As cross-border working and the availability of remote working options have potential tax implications not only on an island of Ireland basis, but also internationally, it is important that the wide range of policy considerations that arise are fully understood and considered.
My Department is continuing to engage on this matter, which includes the below steps:
1. Obtain Better Data There was a general acceptance that data in relation to the nature and extent of cross-border working could be improved. In this regard, my Department commissioned the ESRI to undertake a research project in this area. In June 2024, the ESRI published its report entitled ‘A Study of Cross-Border Working on the Island of Ireland’. This paper estimates the number of cross-border workers, as well as providing an overview of the profile and characteristics of cross-border workers.
2. Minimise Administrative Burden Revenue has looked at ways to minimise and simplify the administrative burden insofar as possible. Revenue has published guidance in this regard which will be of assistance to employers and employees.
3. International Discussions My Department is actively engaging in international discussions on the policy implications of cross-border working, including at both EU and OECD level. The OECD has commenced its work on global mobility and my officials are continuing to engage on this matter, and also remain open to engaging bilaterally with other jurisdictions as appropriate to the circumstances.
To answer the Deputy's specific question, my Department has not had direct engagement with HM Treasury on this matter in the last six months.
79. Deputy Ruairí Ó Murchú asked the Minister for Finance his Department’s latest engagement with insurance companies and new insurance companies regarding the high cost of public liability insurance; and if he will make a statement on the matter. [16110/25]
View answerThe Government remains actively engaged with the insurance industry to address the cost of public liability insurance. While I, as Minister for Finance, cannot intervene directly in insurance pricing under the EU’s Solvency II Directive, significant reforms are being implemented to foster competition and reduce costs.
Over the past two months, the Minister of State with special responsibility for Financial Services, Credit Unions and Insurance, Robert Troy, has been engaging with Insurance Ireland and the CEOs of the major insurance companies in the State in order to impress upon them the necessity of passing on savings arising from the reform agenda, in the form of reduced premiums.
Also important in this area is the work of the Office to Promote Competition in the Insurance Market (OPCIM), which Minister of State Troy will now chair as part of his ministerial duties. The OPCIM has played a central role in engaging with both existing insurers and new market entrants to broaden their risk appetite. This has led to increased availability of cover for high-risk sectors such as equestrian activities, adventure tourism, and childcare. Notably, new providers like OUTsurance, Revolut, and Fastnet have entered the market, contributing to greater competition. The insurance sector has also seen greater activity from Managing General Agents, introducing specialised expertise into the market. This, combined with growing competition in the brokerage sector, has improved access to niche insurance products and reduced premiums.
The Government’s broader insurance reform agenda, including the rebalancing of the Duty of Care, the reform of the Injuries Resolution Board, and the introduction of new Personal Injuries Guidelines, has also helped to stabilise the market. The latest data from the National Claims Information Database (NCID) shows that 56 percent of business insurance policies had premiums of less than €1,000, with 90 percent under €5,000 in 2023. Work is ongoing with the Central Bank of Ireland to facilitate faster data release from the NCID to ensure that the data collected is readily available to support market transparency.
I wish to assure the Deputy that the Government remains fully committed to the continued reform of the insurance sector, ensuring reforms result in lower costs and greater availability of public liability insurance for businesses and community organisations across Ireland. The Government has also committed to publish a new Action Plan for Insurance Reform, focused on encouraging further competition in the market and working with stakeholders to enhance transparency and affordability across all types of insurance, building on the significant progress made under the previous action plan.
80. Deputy John Lahart asked the Minister for Finance if he will consider raising the category A threshold under capital acquisitions tax and expanding the range of individuals that can qualify under this category; and if he will make a statement on the matter. [16277/25]
View answerCapital Acquisitions Tax (CAT) is a tax which applies to both gifts and inheritances. For CAT purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise.
In Budget 2025, the Group A threshold was increased from €335,000 to €400,000, Group B from €32,500 to €40,000 and Group C from €16,250 to €20,000.
Gifts and inheritances between spouses and civil partners are exempt from CAT. There are also a number of exemptions and reliefs from CAT that may apply depending on the circumstances of the case, including reliefs which apply to relationships within the Group A threshold.
One such exemption is the CAT dwelling house exemption. Where a person takes an inheritance of a dwelling house, that person may be able to avail of the dwelling house exemption. To qualify for the exemption, the inherited property must have been the disponer’s principal private residence at the date of death. This requirement is relaxed in situations where the deceased person left the property before the date of death due to ill health; for example, to live in a nursing home. The beneficiary must also have lived in the house for 3 years prior to the date of the inheritance and must continue to live in the house for 6 years after that date. In addition, the beneficiary must not have a beneficial interest in any other residential property. Detailed guidance on the dwelling house exemption has been published on the Revenue website at www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part24.pdf.
There is provision in CAT legislation for a niece or nephew of the disponer to avail of the Group A threshold where the gift or inheritance consists of business assets and certain conditions are met. The niece or nephew must have worked substantially on a full-time basis for a period of five years prior to the gift or inheritance being given in carrying on, or assisting in the carrying on, the trade, business or profession, of the disponer.
My officials are reviewing Capital Acquisition Taxes as part of the annual Tax Strategy Group papers. These papers outline the tax policy considerations for the Government and the options available to it in forming this year’s Budget. These papers are published in advance of the Budget and are the best way to consider inheritance tax in an analytical and transparent way.
The Deputy should note that there would be a significant cost in making any further substantial changes to CAT.? The options available for setting CAT thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.
