Dáil Éireann Debate, Wednesday - 17 December 2008
204 Deputy Joan Burton asked the Minister for Finance the cost to the Exchequer, in terms of tax revenue foregone, of tax relief for investors in the private housing market for each year from 2002 to date in 2008; the budgeted cost of such reliefs for 2009; the number of individual taxpayers who avail of such reliefs; and if he will make a statement on the matter. [46958/08]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the relevant information available on the cost to the Exchequer of income tax relief for individual investors in private housing is based on personal income tax returns filed by non-PAYE taxpayers for the years 2003 to 2006 inclusive, the latest year for which this information is available, indicating the amount of interest on borrowings claimed as a deduction against rental income assessable under Case V, Schedule D. The estimated costs are set out as follows.
|
Year |
Estimated Tax Forgone |
Numbers of individual claimants |
|
€m |
||
|
2003 |
222 |
39,800 |
|
2004 |
284 |
50,800 |
|
2005 |
393 |
60,600 |
|
2006 (provisional) |
572 |
63,700 |
The estimates are based on assuming that tax relief was allowed at the top income tax rate of 42% and the figures provided could therefore be regarded as the maximum Exchequer cost in respect of those taxpayers.
Corresponding suitable data is not available for the year 2002. I am advised by the Revenue Commissioners that data for the tax year 2007 is not yet available as the appropriate income tax returns for that year which were recently due for filing are currently being processed. It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return form 12 is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return form 11. This return is the source of the figures provided in this reply.
Projections for income tax receipts are based on assumed movements in macroeconomic parameters and not by reference to the costs of individual tax reliefs. Accordingly, I am not in a position to provide the data requested by the Deputy for the years 2007 to 2009 in relation to this relief.
Income tax relief is also claimed by individuals who have invested in private residential property under the various property based tax incentive schemes in the categories of urban renewal, town renewal, seaside resort, rural renewal, living over the shop, park and ride, student accommodation, holiday cottages and housing for the elderly and infirm. Based on information that has been received and collated to date for the tax years 2004, 2005 and 2006, the position in terms of estimated tax relief allowed in respect of these schemes is set out in the following table.
No specific Revenue information on the cost of these schemes is available for the tax year 2003 or previous years and I am advised by the Revenue Commissioners that data for the tax year 2007 is not yet available as the appropriate income tax returns for that year have only recently been filed and have not yet been processed. For the same reason, I am not in a position to provide the data requested by the Deputy for the years 2008 and 2009.
|
2004 |
2005 |
2006 |
||||
|
Residential property |
No. of Investors |
Tax relief allowed €m |
No. of Investors |
Tax relief allowed €m |
No. of Investors |
Tax relief allowed €m |
|
Urban renewal, town renewal, seaside resort, rural renewal, living over the shop, park and ride, student accommodation, holiday cottages and housing for the elderly and infirm. |
3,123 |
69 |
5,372 |
192 |
6,269 |
213 |
205 Deputy Joan Burton asked the Minister for Finance the cost, in terms of tax revenue foregone, of the remittance tax regime for foreign business executives for each year of its operation from 2002 to date in 2008, including the forecast cost of the proposed revamped scheme, as set out in the Finance Bill (No. 2) 2008 for 2009; and if he will make a statement on the matter. [46959/08]
Amharc ar fhreagraI am informed by the Revenue Commissioners that, prior to 31 December 2005, a non-domiciled individual could avail of the remittance basis of taxation in respect of the income from a non-Irish sourced employment. This applied, not only to non-domiciled business executives, but to all non-domiciled individuals working in the State. As the Deputy is aware, that type of remittance basis gave rise to a number of abuses and, as a result,it was curtailed in the Finance Act 2006.
With effect from 1 January 2006, the remittance basis of taxation no longer applies to the income of a non-Irish sourced employment attributable to the performance in the State of the duties of that employment. Section 13 of the Finance (No. 2) Bill 2008 as recently amended by the Select Committee on Finance and the Public Service proposes to introduce a new type of remittance basis of taxation to the income of a non-Irish sourced employment attributable to the performance in the State of the duties of that employment which was debated at some length at Committee Stage of the Bill.
As to potential loss to the Exchequer, individuals chargeable on the remittance basis are obliged to declare only so much of the foreign income received in, or remitted to, the State. Accordingly, details of un-remitted employment income under foreign contracts, in respect of which Irish tax was forgone, either by business executives or other occupations, are not available.
Budget of 2006 stated that the Exchequer yield from discontinuing the remittance basis with effect from 1 January 2006 was estimated at over €50 million in 2006, €75 million in 2007 and €100 million in subsequent full years. These estimates were arrived at on the basis of the evidence of the promotion of the use of the remittance basis which the changes in the Finance Act 2006 were designed to eliminate.
As regards the proposed scheme as outlined in the present Finance Bill, as I stated at the Committee Stage of the Bill, it is difficult to estimate but I believe it could cost about €10 million per annum.
