Dáil Éireann Debate, Tuesday - 3 November 2009
275 Deputy Joan Burton asked the Minister for Finance the expected cost to the Exchequer in 2010 of tax relief on rental income for residential properties and for commercial properties; and if he will make a statement on the matter. [38073/09]
Amharc ar fhreagraI am informed by the Revenue Commissioners that based on personal income tax returns filed by non-PAYE taxpayers for the year 2007, the latest year for which this information is available, the amount of tax foregone by allowing a deduction for interest on borrowings to be offset against rental income assessable under Case V, Schedule D is estimated to have been of the order of €877 million.
This estimate is based on assuming that tax relief was allowed at the top income tax rate of 41% and the figure provided could therefore be regarded as the maximum Exchequer cost in respect of those taxpayers. I am advised by the Revenue Commissioners that they are not in a position to provide data for 2008 as the tax returns for that year and subsequent years are not yet due.
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.
The Deputy will no doubt be aware that the level at which interest repayments can be claimed against tax for residential rental properties was reduced from 100% to 75% in section 5 of the Finance Act 2009 at an estimated full year yield of €95 million.
276 Deputy Joan Burton asked the Minister for Finance the expected cost to the Exchequer in 2010 of property related tax schemes, including legacy schemes that are closed; and if he will make a statement on the matter. [38074/09]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the relevant information available on the cost to the Exchequer of each of the property based tax reliefs is based on personal income tax returns filed by non-PAYE taxpayers and corporation tax returns filed by companies for the year 2007, the latest year for which this information is available. These are as set out in the following table:
|
Scheme |
Tax Cost |
|
€m |
|
|
Urban Renewal |
109.3 |
|
Town Renewal |
34.6 |
|
Seaside Resorts |
8.0 |
|
Rural Renewal |
48.5 |
|
Multi-storey car parks |
9.6 |
|
Living over the shop |
3.0 |
|
Enterprise Areas |
2.8 |
|
Park and Ride |
1.4 |
|
Holiday Cottages |
12.4 |
|
Hotels |
118.0 |
|
Nursing Homes |
18.3 |
|
Housing for the Elderly/Infirm |
2.6 |
|
Hostels |
0.72 |
|
Guest houses |
0.02 |
|
Convalescent Homes |
0.5 |
|
Qualifying (Private) Hospitals |
12.0 |
|
Qualifying sports injury clinics |
1.8 |
|
Buildings used for Childcare Purposes |
9.8 |
|
Psychiatric Hospitals |
0.1 |
|
Mental Health centres |
0.0 |
|
Student Accommodation |
42.0 |
|
Total |
435.4 |
Data is not yet available in relation to the following schemes: Qualifying specialist Palliative Care Units (subject to commencement order) and Certain tourism infrastructure under the mid-Shannon scheme (scheme terminates 31 May 2013).
I am advised by Revenue that they are not in a position to provide data for 2008 as the tax returns for that year and subsequent years are not yet due. The estimated relief claimed has assumed tax foregone at the 41% rate in the case of individuals and 12.5% in the case of companies. The figures shown correspond to the maximum Exchequer cost in terms of income tax and corporation tax.
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.
277 Deputy David Stanton asked the Minister for Finance his views on reducing the minimum cost threshold of €25,390 to qualify for relief under VAT refund order SI 58/92 in respect of medical equipment donated to hospitals; and if he will make a statement on the matter. [38080/09]
Amharc ar fhreagraCharities and non-profit groups engaged in non-commercial activity are exempt from VAT under the EU VAT Directive, with which Irish VAT law must comply. This means they do not charge VAT on the services they provide and cannot recover VAT incurred on goods and services that they purchase. In this regard, where a hospital or a charity purchases a good or engages a service, any VAT liable in the charge for that good or service must be borne by the hospital or charity.
However, there is provision for the refund of VAT incurred on the purchase of a new medical instrument or appliance by a person who donates such equipment to a hospital. The main conditions relating to this refund scheme are that: the appliance or instrument is new and is donated to a hospital; the appliance costs €25,390 or more in value (exclusive of VAT); the appliance is designed and manufactured for use solely in medical research or in diagnosis, prevention or treatment of illness; the appliance is purchased through voluntary donations, such that no part of the funds used in the purchase is provided directly or indirectly by the State, a State body or any public or local authority; and, the appliance is subject to a recommendation by the Minister for Health and Children that, having regard to the requirements of the health services in the State, a refund of tax would be appropriate.
The VAT refund Order was introduced to help defray the cost of more expensive items purchased by voluntary donations. Items costing less than the threshold of €25,390 are excluded from the relief in order to limit the relief to more expensive medical equipment.
The current threshold level has not changed since the refund was introduced in 1987 at £20,000, which was translated to €25,390 to coincide with the introduction of the euro in 2002. Given inflation since the introduction of the current threshold, in real terms the value of threshold has reduced significantly. Taking inflation into account the 1987 threshold would equate to around €46,500 in 2009 values. In this context a greater level of lower priced medical appliances now qualify under the Order than when the relief was originally introduced.
In the circumstances there are no plans to change the current threshold.
