Written Answers Nos. 63 - 72
63. Deputy Dara Calleary asked the Minister for Finance the criteria that should be used by a person registering for the local property tax who is in the process of signing over the property to a family member; if the property in such a situation should be registered by one or both parties; and if he will make a statement on the matter. [26332/13]
Amharc ar fhreagraBased on the information provided by the Deputy it is not possible to give a definitive reply. However, by way of general information the following may be of relevance in this case. A liability for Local Property Tax (LPT) arises where a person is a liable person in relation to a residential property on the liability date, which is 1 May 2013 for the year 2013. The Finance (Local Property Tax) Act, as amended, defines a liable person as “a person who holds any estate, interest or right in a relevant residential property entitling the person to either immediate possession of such property for a period that may equal or exceed 20 years; or the receipt of rents or profits of such property for a period that may equal or exceed 20 years”.
I have been informed by the Revenue Commissioners that the owner of a residential property is generally the liable person for the purposes of the charge to LPT. The Deputy indicates that the owner is currently in the process of signing over the property to a family member and it is therefore assumed that this transfer was not completed on 1 May 2013. In that case, the property should only be registered in the name of the current liable person.
The Commissioners advise that when the transfer is complete, details of the new liable person in respect of the property in question should be notified to Revenue so that the LPT Register can be updated accordingly. Furthermore, as the meaning of sale includes a transfer of property, the person who is the liable person as at 1 May 2013 is required to pay any 2013 LPT due before they complete the transfer, notwithstanding that the LPT is not payable until 1 July 2013.
64. Deputy Finian McGrath asked the Minister for Finance if he will provide figures on the amount of tax paid by foreign multinational companies here, corporate tax in particular. [26312/13]
Amharc ar fhreagraI am informed by the Revenue Commissioners that as multinational companies are not specifically distinguished from other companies on tax records, there is no precise basis on which the taxes paid by multinational companies can be separately ascertained. Where necessary, it is possible for Revenue’s Large Cases Division (which manages the tax affairs of most multinational companies) to manually identify the top payers among these companies on a case by case basis and extract the necessary tax details to provide indicative figures. The amount of corporation tax paid in 2012 by the top 10 companies, managed in Revenue’s Large Cases Division was €1.42 billion.
65. Deputy Robert Dowds asked the Minister for Finance if he will clarify the length of time persons, particularly pensioners, qualifying for a deferral of the local property tax on income grounds will continue to avail of the deferral, assuming their income remains constant. [26357/13]
Amharc ar fhreagraFor individuals on low incomes the Finance (Local Property Tax) Act 2012, as amended, provides for a system of deferral arrangements for owner-occupiers where there is an inability to pay the tax and certain specified conditions are met. I am advised by the Revenue Commissioners that an owner-occupier, such as a pensioner, who meets the qualifying conditions for deferral of their 2013 Local Property Tax (LPT) charge based on their income thresholds, may continue to defer the LPT for so long as they meet the qualifying conditions. It is a condition of any deferral that, if a claimant’s circumstances change, Revenue must be notified. A change of circumstances may result in the deferral being terminated in respect of future LPT. Where a liable person ceases to meet the qualifying conditions, any LPT deferred before that person ceased to meet the conditions may continue. Interest of c. 4% per annum will apply to any amounts deferred.
Certain events such as the receipt of money by way of winnings, gifts, inheritances or capital sums of any kind will cause the tax deferred up to that point, including interest, to become immediately payable. Deferred LPT and interest will have to be discharged on the sale/transfer of the property. However, a deferral may be allowed to continue where the property passes to another person by way of a gift or inheritance and the new liable person is also eligible for a deferral. I previously provided details on the option of deferring payment of LPT based on income thresholds in my reply to Parliamentary Question No. 69 of 25 April 2013 (19691). I am advised by the Commissioners that full details of all deferral options are outlined in the Guidelines on Deferral or Part Deferral of Local Property Tax, which are available on Revenue’s website www.revenue.ie.
66. Deputy Éamon Ó Cuív asked the Minister for Finance if he intends introducing a provision, whereby all invoices issued for farm contracting services, must carry a VAT number in order to discourage evasion of taxation; and if he will make a statement on the matter. [26368/13]
Amharc ar fhreagra67. Deputy Éamon Ó Cuív asked the Minister for Finance his views on whether it is reasonable that self-employed persons who are not VAT registered can write cheques of up to €5,000 without having to provide back up invoices; the reason for this provision; and if he will make a statement on the matter. [26369/13]
Amharc ar fhreagraI propose to take Questions Nos. 66 and 67 together.
I understand that these questions arise from an article in the Irish Independent on 28 May 2013 quoting Mr. Peter Farrelly of the Association of Farm Contractors of Ireland (FCI), stating, “Farmers have a special exemption with Revenue at the moment where they don’t have to get a receipt from a contractor for any work done up to €5,000.” The article goes on to say that the FCI have proposed a system whereby farmers must be able to show a receipt for any work done by a contractor in order for it to qualify as a tax deductible expense.
I am informed by the Revenue Commissioners that there is no such “special exemption” in existence. Farmers, similar to all self-employed individuals, registered for VAT or not, must be in a position to document all business expenses incurred prior to making any claim to a deduction for that expense against income in order to compute their chargeable income for tax purposes. I am further informed that the Revenue Commissioners met with Mr. Peter Farrelly and Mr. Timothy O’Brien of the FCI on 14 June 2012, and it was made clear at that time that no concession of this nature was in place.
68. Deputy Éamon Ó Cuív asked the Minister for Finance the reason farmers were granted a carbon tax relief on diesel, but that this rebate is not available to agricultural contractors, thus putting them at a financial disadvantage; and if he will make a statement on the matter. [26370/13]
Amharc ar fhreagraI assume that the Deputy’s question relates to the double deduction for carbon tax on farm diesel which I provided for in Finance Act 2012. Under this provision, farmers are allowed a deduction in computing their farming profits or losses for the amount of additional carbon tax they incur on purchases of marked gas oil following the €5 per tonne increase in the rate of carbon tax on certain fuels from 1 May 2012. This was provided in the context of a commitment in the Programme for Government.
69. Deputy Peadar Tóibín asked the Minister for Finance the process by which the Revenue check that the companies claiming to be an Irish registered non-resident company have identified a country of residence and pay or are liable for tax in that country of residence. [26374/13]
Amharc ar fhreagra70. Deputy Peadar Tóibín asked the Minister for Finance the number of inspections carried out for tax purposes on companies claiming to be an Irish registered non-resident company. [26375/13]
Amharc ar fhreagra71. Deputy Peadar Tóibín asked the Minister for Finance the process of verification of companies claiming the status of Irish registered non-resident companies are exempt from tax. [26376/13]
Amharc ar fhreagraI propose to take Questions Nos. 69 to 71, inclusive, 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 in Ireland. Section 23A of the Taxes Consolidation Act 1997 supplements this general rule and provides that certain companies incorporated in the State are to be regarded as being resident in the State for tax purposes.
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.
Companies that are tax resident in Ireland are liable to tax on their worldwide income with credit given for foreign taxes paid on income earned abroad. Companies that are not tax resident in Ireland and which do not carry on a trade in Ireland have no liability to Irish corporation tax and have no obligation to file an Irish corporation tax return or to identify the country in which they are resident for tax purposes.
Non-resident companies that carry out business activities in Ireland through an Irish branch are not exempt from or outside the scope of corporation tax. Such companies are liable to corporation tax on such proportion of their profits as are attributable to business activities carried on through the Irish branch. These companies are obliged to file a corporation tax return but only in respect of their Irish branch operations. The corporation tax return requires the non-resident company to tick a box on the return where the company in question is non-resident but has an Irish branch. There is no requirement for such a company to identify its country of residence for tax purposes on its corporation tax return. There is also no requirement for such non-resident companies that have an Irish branch to report their non-Irish branch profits to Irish Revenue as such profits are not, as a matter of law, subject to Irish corporation tax.
I am informed by the Revenue Commissioners that there is no requirement in Irish tax law for a company to claim the status of Irish registered non-resident company. While there is no requirement for a company to claim Irish registered non-resident status, the Revenue Commissioners as part of their normal compliance activity in the area of corporation tax, would seek confirmation from a company as to how it is structured and would verify that all relevant corporation tax rules have been correctly applied.
72. Deputy Peadar Tóibín asked the Minister for Finance the number of tax inspections conducted on companies with a turnover in excess of €500 million and in excess of €1 billion each year since 2000. [26377/13]
Amharc ar fhreagraI am informed by the Revenue Commissioners that data are not maintained in a manner which would enable this question to be readily replied to. However I can provide statistics for Revenue’s Large Cases Division which manages the tax affairs of the largest companies and high wealth individuals within the state including those with turnover in excess of €500M.
Since 2005 Large Cases Division has completed 3,447 audits on cases for whom it is responsible. In addition, since July 2011, this Division has also completed 7,397 other risk interventions (such as querying refunds, relief claims) on cases for which it is responsible.
