Dáil Éireann Debate, Wednesday - 7 July 2004
182 Dr. Cowley asked the Minister for Finance the reason complex new rules are required for the simple task of purchasing a few prize bonds, for example, for children or grandchildren; his views on whether this is bureaucracy gone mad; if he will consider easing these regulations; and if he will make a statement on the matter. [20777/04]
Amharc ar fhreagraThe Deputy is presumably referring to the impact of the new rules arising from the introduction of the recent EU savings directive on new prize bonds. This directive was implemented in Irish law by section 90 of, and Schedule 4 to, the Finance Act 2004.
The directive provides for most EU member states to exchange information on the cross-Border payment of interest to individuals resident in another member state. Austria, Belgium and Luxembourg will instead impose a withholding tax on such interest payments. The directive applies only to the savings income of individuals. For the purposes of the directive interest payment includes prizes attaching to a security. Prize bonds are defined in Irish legislation as non-interest-bearing securities in relation to which chance may be used to select particular securities for prizes. Prize bond prizes, therefore, come within the scope of the directive.
The directive prescribes the rules to be applied to establish the identity and country of residence of beneficial owners of an interest payment — more stringent rules apply where prize bonds are purchased by an individual for the first time from 1 January last. Where these rules show that an individual is resident in another EU member state, the directive requires that information as regards the prize and the winner be reported to the authorities of that member state. As recently agreed at EU level, the obligation to exchange information comes into operation as respects an interest payment made on or after 1 July 2005. On the application of the rules to give effect to this provision, my Department and the Revenue Commissioners are already in discussion with the National Treasury Management Agency and the prize bond operator with a view to minimising the paperwork concerned in the purchase of prize bonds.
