Written Answers Nos. 173-193
173. Deputy Michael McGrath asked the Minister for Finance when a person has a long-term right of residence in a property and is liable to the local property tax, if they qualify and choose to exercise the deferral option, is their estate liable for the charge or if liability for the arrears passes to the owner of the property; and if he will make a statement on the matter. [25516/13]
Amharc ar fhreagraI am advised by the Revenue Commissioners that a person who has a long term (for life or for a period of twenty years or more) right of residence that entitles them to exclude any other person from the property is the liable person in respect of that residential property and is entitled to claim deferral of the Local Property Tax (LPT) charge, subject to their meeting the required conditions. In addition, on that person's death his or her estate will be liable for any deferred liability including interest payable at a rate of 4% per annum. I am further advised that where the liability is not paid by the personal representative/estate, the unpaid LPT liability remains a charge on the property in question.
174. Deputy Pearse Doherty asked the Minister for Finance the number of companies and the names of same, that are incorporated here but are considered non-resident for tax purposes. [25521/13]
Amharc ar fhreagra175. Deputy Pearse Doherty asked the Minister for Finance if Revenue has ever conducted a report on companies that are incorporated as Irish but are non-resident for tax purposes; if he has ever commissioned the Revenue to conduct a report or if he will do so in the future. [25522/13]
Amharc ar fhreagra176. Deputy Pearse Doherty asked the Minister for Finance the specific piece of legislation and the provision therein which allow companies to establish themselves as incorporated Irish but non-resident; the conditions attached to such incorporation; the date on which the legislation was introduced and put onto the Statute books; and if the decision to allow such a legal concept emanated from his Department or if it was proposed by advisors and or lobbyists. [25523/13]
Amharc ar fhreagra190. Deputy Pearse Doherty asked the Minister for Finance the number of jobs created here by Irish incorporated, non-resident tax companies, directly and indirectly. [25596/13]
Amharc ar fhreagraI propose to take Questions Nos. 174 to 176, inclusive, and 190 together.
As a general rule, based on long-standing case law, companies are resident in Ireland for tax purposes if they are managed and controlled here. Since 1999, section 23A of the Taxes Consolidation Act 1997 added rules which provide that certain companies incorporated in the State are to be regarded as being resident in the State for tax purposes. These provisions were introduced into the Taxes Consolidation Act, by section 82 of the Finance Act 1999 which was enacted on 25 March 1999. They were part of a package of measures considered necessary to deal with the issue of Irish registered companies which, while registered in Ireland, had no contact or association with the State following their registration. There was concern that some of these companies were engaged in fraud, money laundering, drug trafficking and other illegal activities. As these companies were managed and controlled outside the State, they were not resident in Ireland for tax purposes under the long-standing management and control rule.
Consistent with the purpose of the provisions - to address companies that were not managed and controlled in the State and had no real connection with the State apart from having been incorporated here - the 1999 additions to the residence rules provided that only Irish-incorporated companies with no other connection with the State were to be regarded as resident in the State by virtue of their incorporation here. A company incorporated in the State is not regarded as tax-resident here where:
- either the company or a related company is carrying on a trade in the State and either
- the company is ultimately controlled in a tax treaty country or in an EU Member State or
- the company or a related company is quoted on a recognised stock exchange in the EU or in a tax treaty country, or
- the company is treated under a tax treaty as not resident in the State.
While tax law is reviewed from time to time from a policy perspective, I have not commissioned the Revenue Commissioners to conduct a report on companies that are incorporated as Irish but non-resident for tax purposes. I am informed by the Commissioners that they have considered such companies in the course of monitoring the arrangements of large cases. I am advised by the Revenue Commissioners that the number of companies and the names of same that are incorporated here but non-resident for tax purposes - and numbers of any related jobs - are not available as they are not separately compiled. My Department is currently working with the Revenue Commissioners to examine further the issues that have recently arisen in relation to this issue.
178. Deputy Pearse Doherty asked the Minister for Finance further to sworn statements given by Apple representatives to the US Senate Committee investigating the company's tax matters, if he can explain the way Apple's taxable income in the State is calculated in such a was as to bring its corporation tax to single digits; and if these methods are applied to other multi national corporations [25525/13]
Amharc ar fhreagraI cannot comment on the tax affairs of individual companies. However, I am aware of the Memorandum issued by the US Senate Permanent Subcommittee on Investigations last week. I want to make it clear that we do not have a special low corporation tax rate for individual companies. Ireland’s tax system is statute-based so there is no possibility of individual special tax rates for companies.
All companies resident in Ireland are chargeable to corporation tax at the 12.5% rate on the profits that are generated from their trading activities in Ireland. A higher 25% rate applies in respect of investment, rental and other non-trading profits. Chargeable capital gains are taxable at the capital gains tax rate of 33%. The tax rates being quoted publicly this week are emphatically not the rate of tax paid by such companies - or by any company on its Irish activities. Having examined the document produced by the US Senate Subcommittee, it appears that the rate that is being quoted is got as follows: the tax charged in Ireland on the branch activities in Ireland of companies that are not resident here is divided by the entire profit of the companies concerned as if they were resident here, which they are not.
It is clearly wrong and misleading to attribute this rate of tax to Ireland. Companies which are not tax-resident in Ireland are no more chargeable in Ireland in respect of their entire profits than they are in any other country in which the company is not tax resident - and these company profit figures should not be used to assert special tax rates that simply do not apply here.
179. Deputy Pearse Doherty asked the Minister for Finance the average statutory and effective tax rate for multinational corporations in the 1980s, 1990s and the 2000s. [25526/13]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the statutory standard Corporation tax rates for all companies is as shown in the following table for all years from 1980. Information in relation to the tax payments of multinational corporations is not separately identifiable. In relation to the effective tax rate for multinational corporations, I have repeatedly stated that there is no agreed international methodology for calculating the ‘effective rate’ of corporation tax. As there is no single internationally agreed comparative measure in place, I am not in a position to provide such a measure for the period referred to by the Deputy.
You may wish to note that information from the corporation tax returns filed by all companies for tax years from 1990/91 up to 2010, the latest year currently available, is published in the Statistical Reports of the Revenue Commissioners. The information in the reports for tax years 1995/96 and onwards is available on the Revenue Commissioners website and can be accessed using the following link http://www.revenue.ie/en/about/publications/statistical-reports.html.
Based on the information in the Revenue reports, the following table shows the standard rate of Corporation Tax applicable to profits earned in the year, with the following notes:
- Where two tax rates are shown for a year it denotes a rate change applying during the year.
- The Corporation tax for years prior to 2001 includes an element of income tax paid by companies.
- In addition to these rates, a rate of 25% applies to non-trading income such as Schedule D Case III, IV and V, certain land dealing activities and income from working minerals and petroleum activities with effect from 1 January 2001
|
Year |
Standard Rate of Corporation Tax applicable to profits earned in the year |
|
1980 |
45% |
|
1981 |
45% |
|
1982 |
50% |
|
1983 |
50% |
|
1984 |
50% |
|
1985 |
50% |
|
1986 |
50% |
|
1987 |
50% |
|
1988 |
50% & 47% |
|
1989 |
47% & 43% |
|
1990 |
43% |
|
1991 |
43% & 40% |
|
1992 |
40% |
|
1993 |
40% |
|
1994 |
40% |
|
1995 |
38% & 40% |
|
1996 |
38% |
|
1997 |
38% & 36% |
|
1998 |
32% |
|
1999 |
28% |
|
2000 |
24% |
|
2001 |
20% |
|
2002 |
16% |
|
2003 |
12.5% |
|
2004 |
12.5% |
|
2005 |
12.5% |
|
2006 |
12.5% |
|
2007 |
12.5% |
|
2008 |
12.5% |
|
2009 |
12.5% |
|
2010 |
12.5% |
|
2011 |
12.5% |
|
2012 |
12.5% |
Further, it should be noted that there were a number of tax incentives that were generally available to all companies in the 1980s. I would refer the Deputy to the scheme of relief from corporation tax provided for in Part IV of the Corporation Tax Act, 1976 (Export Sales Relief) which expired on 5 April 1990. That relief provided for a reduction to nil of the corporation tax on profits from the export of goods manufactured in the State.
Export Sales Relief was withdrawn on a phased basis from 1980 to 1991 and was effectively replaced with a relief provided for in Chapter VI of the 1980 Finance Act (Manufacturing Relief), which provided for a reduction of the corporation tax to a rate of 10% on profits from the sale of goods manufactured in the State. Manufacturing Relief expired on 31st December 2010. The manufacturing scheme of relief was extended to activities carried out in the IFSC and ancillary services located in the Customs House Docks Area and to activities carried on in the Shannon Airport Area. Relief for these activities expired on 31 December 2005.
180. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 213 of 21 May 2013, if he will confirm the decision process entailed in forwarding £20,000 to the University of Ulster as a contribution towards a study being undertaken there; if the university approached the National Asset Management Agency or NAMA approached the university; if NAMA has a fund established for such educational and research undertakings; if other universities or education and research institutions have approached NAMA for similar funding; and if NANA is considering further funding of educational and research studies in the future. [25527/13]
Amharc ar fhreagraI refer the Deputy to my previous response on this topic (Parliamentary Question, 16009/12, 22nd March 2012). I am advised by NAMA that, as in the Republic of Ireland, a particular difficulty associated with the Northern Ireland residential market has been the lack of independent professional research and data about the key factors that will influence the future availability and cost of housing. For this reason, NAMA considered a number of research proposals by reference to the need for practical market insights to facilitate informed decision-making by all market participants, including NAMA, in the Northern Ireland residential market. Based on the proposals received, NAMA agreed to help fund research by the University of Ulster into the geography of future residential supply and demand in Northern Ireland with a particular focus on residential land bank assets. In December 2012, the University published its Spatial Analysis of Residential Development Land Banks, which overlays residential land bank assets in Northern Ireland with planning, infrastructure, demographic and housing need data to produce a comprehensive picture of likely future housing supply and demand patterns.
The Deputy may be aware also that NAMA has recently agreed to take a leading role in promoting and funding a two-year research programme on housing in the Republic of Ireland to be undertaken by the Economic and Social Research Council (ESRI). The Agency advises that proposals for research such as this are considered by, amongst other criteria, reference to the practical application of expected outcomes. I am advised by NAMA that the agency does not operate a fund for such undertakings but procures research as and when required, in line with its commercial remit.
181. Deputy Seán Kenny asked the Minister for Finance the number of requests his Department has received from the Revenue Commissioners requesting additional staffing, legislation and equipment in each of the past four years; the number of requests that have been approved; the number of requests that have been refused; the number of requests that are currently pending; and if he will make a statement on the matter. [25539/13]
Amharc ar fhreagraThe Revenue Commissioners and my Department are in ongoing contact regarding a very broad range of matters, including as appropriate, all the matters listed by the Deputy.
More formally, the Revenue Commissioners have written to me on three occasions in the past four years in relation to staffing and resources generally, including equipment. In addition, in 2011 the Revenue Commissioners submitted a Comprehensive Review of Expenditure that identified their resourcing requirements. As the Deputy will be aware the Minister For Public Expenditure is responsible for the Employment Control Framework for staffing and for the control of Government Expenditure through the Estimates process and in this context, most day to day requests for sanction for staffing or recruitment are managed between that Department and the Revenue Commissioners. While conscious of the need to control expenditure, I have been generally supportive of the cases made by Revenue and recognise the need to ensure that Revenue is adequately resourced to ensure the effective operation of the Revenue administration for the benefit of the Exchequer.
As part of the engagement between my Department and Revenue relating to the introduction of the Local Property Tax, I supported Revenue’s resource requirements, and these are set out in the Expenditure Report for 2013 and in the Revised Estimates for Public Services, 2013, for the Finance Group of Votes, which I discussed with the relevant Committee last week.
Regarding legislation, since 2009 there have been no less than eight Finance Acts, including two Finance (Local Property Tax) Acts. Given the nature of the engagement between Revenue and my Department in preparing these Bills, it would be impossible to disaggregate with any precision all the legislative changes arose as a result of requests from the Revenue Commissioners. However, many legislative changes have been implemented to improve the administration of the tax system and to improve compliance. Examples include, the reform to the Relevant Contract Tax System, the introduction of a new excise licencing system for mineral oils and the modernisation of direct taxes assessing rules for self-assessment. For completeness, I should also add that the Revenue Commissioners will, from time to time, comment through my Department on legislative proposals presented by other Ministers. If the Deputy has something specific in mind, it may be possible to be more helpful.
I will continue to carefully consider any new legislative proposals received from the Revenue Commissioners that make it easier and less costly for taxpayers to comply and that help reduce non-compliance.
182. Deputy Luke 'Ming' Flanagan asked the Minister for Finance if persons (details supplied) completed an application form for the Central Bank of Ireland to become regulated as a retails credit firm; and if he will make a statement on the matter. [25549/13]
Amharc ar fhreagraThe Central Bank has informed me that the company referred to by the Deputy holds an authorisation since 4 November 2009. Retail Credit Firms are required to be authorised under Part V of the Central Bank Act, 1997 and a register of all such firms is maintained on the Central Bank of Ireland’s website. The link to the relevant section on the Register is as follows: http://registers.centralbank.ie/FirmDataPage.aspx?firmReferenceNumber=C39721.
185. Deputy Pearse Doherty asked the Minister for Finance if he has sent any communication, or if he intends to send any communication or officials from his Department or the Revenue Commissioners to the U.S. Senate Committee that undertook a case study on Apple's tax activities, specifically in Ireland, which refute the allegations that Ireland is a tax haven for multinational corporations and that Apple was offered a special deal by the Irish State on corporation tax. [25552/13]
Amharc ar fhreagraAs I have said in the Dáil previously we are in regular contact with our friends in the United States and we will communicate the issues referred to by the Deputy in the appropriate way at the appropriate time.
186. Deputy Pearse Doherty asked the Minister for Finance if he had any communication with the European Commission in relation to the allegations made concerning Ireland's tax treatment of Apple; and if his attention has been drawn to the Commission's examination of the matter, following these allegations. [25553/13]
Amharc ar fhreagraI can advise the Deputy that there has been no formal communication with the European Commission regarding the allegations referred to and we are not aware of any examination of this issue by the Commission.
187. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 105 of 21 May 2013, the reason he cannot state that the Central Bank of Ireland is outsourcing the running of its security functions to a private company when any new arrangement regarding the outsourcing, specifically the financial contract with the company, will in all likelihood be included in the CBoI's annual accounts next year; and if he will explain the way in which stating that the CBoI has a new company in charge of its security operations could possibly remain confidential information and the way the disclosure of that news could in anyway impinge upon security at the bank; if he will state his views given the highly sensitive approach being taken to security at the CBoI and the way in which decision to outsource a potentially security threat to the bank's IT is not a cause of concern for him. [25554/13]
Amharc ar fhreagraI would emphasise that responsibility for security arrangements rests with the Central Bank of Ireland and that any suggestion that a new company is responsible for security arrangements is not correct. The Central Bank has entered into a contract with HP to provide the physical data centre environment to host the Central Bank’s IT systems and to manage the technical infrastructure aspects of these systems. HP will also provide hosting facilities at a backup data centre for the purposes of business continuity. Both of these data centres are located in Dublin. However, the Central Bank will remain in control and manage all business application systems and data.
HP will not have access to any of the Central Bank’s business applications. The security of the technical aspects of the systems will be achieved through a combination of physical and logical protections, procedural and process protections, security features including encryption where necessary and on-going monitoring and reporting features. The steps taken comply with the Central Bank’s internal security policies and those of the ECB and are underpinned by the contractual and legal arrangements with HP.
188. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the steps that have been taken to date on the development of the new office building for the Central Bank of Ireland at Spencer Dock, Dublin; if he will specify the tender procedures that have been undertaken to date; if he will specify any project appointments that have been made to date; and if he will make a statement on the matter. [25559/13]
Amharc ar fhreagraI would advise the Deputy that I have no function in the matter of accommodation arrangements at the Central Bank. I am informed by the Central Bank that they expect the new Central Bank building to be an important landmark on North Wall Quay, in the Dublin Docklands. It is the Central Bank’s intention to complete the construction of the existing building on the site and the Bank aims to relocate its city centre staff to the new building by late 2015/early 2016.
The project is currently at the project planning stage and the Bank is examining what elements are feasible in the design. Construction is expected to commence in 2014. I am informed that the Bank will tender for services relating to the design, construction and fit out/services of the new building. Once contracts have been finalised, an award notice will be published in the Official Journal of the European Union. All tenders will follow relevant European and National public procurement legislation and Government guidelines.
191. Deputy John Deasy asked the Minister for Finance the position regarding his Department’s deliberations on the Living City initiative in terms of maximising its uptake in Waterford and Limerick, and securing the necessary EU approvals. [25602/13]
Amharc ar fhreagraFinance Act 2013 includes a section on the Living City Initiative which introduces a scheme of tax incentives focusing on the regeneration of the historic centres of some of our main cities. The scheme which will be introduced by Ministerial order, will apply in the first instance on a pilot basis only to specified regeneration areas in Waterford and Limerick.
I indicated in my budget speech in December last year that I would examine proposals for a targeted incentive for already identified regeneration areas. The tax relief that will apply under this scheme will operate for five years from the date of commencement. However, it is my intention that before it begins, the scheme will be subject to an ex ante cost benefit analysis and, subject to a positive outcome from the analysis, I will seek EU approval under State Aid rules for this initiative to be commenced for Limerick and Waterford cities. Now that Finance Act 2013 is law, my Department has been working on a request for tender document and I expect the tendering process for the cost benefit analysis project to begin shortly.
192. Deputy Michael McGrath asked the Minister for Finance if the National Asset Management Agency intends to launch a Real Estate Investment Trust; the timetable involved; and if he will make a statement on the matter. [25608/13]
Amharc ar fhreagraI am advised that the Board of NAMA is currently reviewing its approach to REITs and the role it can play in light of the recently introduced legislation. I am advised that it has made no decision on the matter.
193. Deputy Michael McGrath asked the Minister for Finance the per minute cost to a person of phoning the local property tax 1890 telephone helpline. [25623/13]
Amharc ar fhreagraI am advised by the Revenue Commissioners that it is not possible to advise on the cost to a person of phoning the Local Property Tax telephone helpline. I am informed that the price is dependent on the individual’s phone network as well as the type of ‘phone package’ that the individual has with his/her operator. Some operators operate on a price per call basis while others charge per minute.
