Written Answers Nos. 152-67
154. Deputy Michael McGrath asked the Minister for Finance his views regarding the impact of online sales imports on the retail sector here; if he has quantified the amount of money spent here each year on imported goods through online purchases; if he can quantify the amount of taxation forgone for the State as a result of same; and if he will make a statement on the matter. [23117/14]
Amharc ar fhreagraWith regard to the impact of online sales imports on the retail sector here, statistics of online retail sales are not available.
In relation to the tax treatment of online sales, the VAT treatment of a particular supply depends on the category of good or service, whether the supply is made to a business or consumer, and, particularly in the case of online sales, the location of the supplier and purchaser. In general online purchasing is made by persons registered for VAT to individuals. Online sales made by an Irish company to persons in Ireland are subject to Irish VAT in the normal manner.
With regard to goods sold online from another EU Member State, EU VAT law provides specific rules for the supply of goods between EU Member States, to determine where the goods should be taxed. In the case of goods supplied by a business in one EU Member State to a customer who is not registered for VAT in another Member State, generally the place where the goods are taxed is the place of the supplier. Therefore, a UK business supplying to a consumer in Ireland would charge UK VAT on the purchase.
However, where a business in one Member State supplies a large amount of goods to customers in another Member State, the rule of distance sales applies. Distance selling for VAT purposes occurs where a supplier in one EU Member State sells goods to a person in another EU Member State, who is not registered for VAT, and the supplier is responsible for the delivery of the goods. This includes mail order, phone and internet sales. Under the distance selling arrangements, sales to customers in other Member States who are not registered for VAT are liable to VAT in the Member State of the supplier provided that the threshold appropriate to the Member State of the customer is not breached. However, where total sales to a particular Member State exceed the threshold in any particular Member State, the supplier must register and account for VAT in that Member State. The distance sales threshold in Ireland is €35,000. This means that where the value of distance sales to unregistered persons in Ireland by a supplier in another Member State exceeds or is likely to exceed €35,000 in a calendar year, that supplier must register for VAT in Ireland and must account for VAT at the appropriate Irish rates.
With regard to online sales made by businesses located outside the EU to customers in Ireland, such goods are subject to VAT and customs duties on importation. However, the low value consignment relief provides that goods not exceeding a total value of €22 may be imported without payment of VAT. This is an administrative measure provided for under EU VAT law. In addition, goods not exceeding €150 may be imported without payment of customs duty, so that goods valued between €22.01 and €150 will qualify for relief from customs duty but VAT will still be chargeable.
In relation to quantifying the amount of taxation forgone in the State as a result on online purchase of goods from outside the State by Irish residents, tax data is not collected in such a manner as would make such statistics available. However, with regard to collecting taxes that are due in the State from online sales, I am advised by the Revenue Commissioners that they are fully aware of the potential for tax evasion as a result of eCommerce and online trading generally. Revenue's overall approach to managing compliance is to undertake a range of targeted interventions that are most appropriate for dealing with the specific risks presented in individual cases including those trading online. Their work is also supported and enhanced with appropriate technology, including their Risk Evaluation Analysis and Profiling (REAP) risk identification system and the capture of data from multiple sources. One of these sources is trading information received from merchant acquirers, which contains indicators of cases involved in internet trading.
Revenue's extensive range of measures and activities, designed to address shadow economy activity, includes exploiting the potential of new and emerging technology towards the identification of tax evasion associated with online trading and business activity.
155. Deputy Maureen O'Sullivan asked the Minister for Finance if he will direct the National Asset Management Agency to publish its property portfolios in its entirety in order to make vacant properties visible and possibly available; and if he will make a statement on the matter. [19454/14]
Amharc ar fhreagraNAMA has acquired loans from the five participating institutions and is not the owner/operator of properties. The Agency's role is that of a secured lender. Other than properties that have been enforced, all of which are listed on NAMA's website (http://www.nama.ie/about-our-work/properties-enforced/) and are managed by the appointed receivers/administrators, properties continue to be managed by their existing owners. Details of these properties are available on the NAMA website. The site is regularly updated and allows for searches by both property type and country/area. In each instance, information about the firm dealing with the insolvency and its contact details are provided. Potential purchasers are encouraged to contact the receivers to obtain additional information on specific properties and to submit expressions of their interest to purchase.
NAMA is subject to similar legal requirements as banks and other lenders precluding them from disclosing information relating to individual debtors and their assets. NAMA advises that extensive information on the geographical and sectoral breakdown of its portfolio will be set out in its Annual Report for 2013, which was published on May 27th.
The Deputy may be aware that NAMA engages proactively with Government departments, local authorities, State agencies and other statutory bodies in relation to their possible need for land/properties. In this way, NAMA has, for instance, identified through the Housing Agency over 4,600 residential properties, which are controlled by its debtors and receivers, as being available and potentially suitable for social housing provision. Local authorities have confirmed demand for just over 1,800 of these properties. Other examples of this engagement include NAMA's identification and sale of sites for new schools, the letting of office and other commercial space to the Office of Public Works, and the sale and letting of properties to the HSE for health care facilities/primary care units. This engagement is working very well and, in particular, NAMA is making a very substantial contribution in terms of the supply of residential property to meet demand for social housing.
156. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which an examination has been undertaken into the levels of property tax applicable throughout the eastern region with particular reference to identifying possible negative impact in certain circumstances; and if he will make a statement on the matter. [19551/14]
Amharc ar fhreagraThe Finance (Local Property Tax) Act 2012 (as amended) sets out how a residential property is to be valued for Local Property Tax (LPT) purposes. As LPT is a self-assessed tax, the amount of LPT due on a property is based on the self-assessed valuation at 1 May 2013 that was declared by the liable person when filing the 2013 LPT1 Return.
I am informed by the Revenue Commissioners that compliance and other data in relation to the LPT for 2013 and 2014 were published on 17 April 2014 on the Commissioners website at: http://www.revenue.ie/en/tax/lpt/lpt-stats-0414.pdf. The report includes details of the number of properties in respect of which a Return was filed for 2013 and the amount of LPT collected for 2013 and 2014 by city and county council.
As can be seen from the report, high levels of voluntary compliance have been achieved in each local authority around the country. The report also provides a breakdown of the percentage distribution of properties across the 20 valuation bands nationally (based on Returns filed for 2013), which shows that over 75% of all residential properties were valued at €200,000 or less, which equates to a maximum LPT payment of €315 per annum. The average LPT payment in the eastern region, however, is likely to be higher than the national average given that properties in the region are likely to have higher valuations on average for LPT purposes, reflecting generally higher market values in the east of the country.
While no formal examination has yet been carried out into a possible distortive effect from LPT on the property market, given the average annual level of LPT payable, as a proportion of the consideration paid for residential properties, I am satisfied that LPT is unlikely to be having any distortive effect. This is borne out particularly by the fact that CSO data and other real estate indicators on property market trends over the last year show that values for residential properties in the eastern region are, generally, rising at a faster rate than prices being achieved elsewhere and the volumes of property transactions undertaken are similarly higher in this region.
The Deputy will be aware that section 20 of the Finance (Local Property Tax) Act 2012 (as amended) allows elected members of a local authority to pass a formal resolution to vary the basic rate of LPT by up to 15% for their functional area, which may result in a lower or higher LPT rate applying for 2015.
157. Deputy Sandra McLellan asked the Minister for Finance further to Parliamentary Question No. 68 of 15 May 2014, the reason only part of the question was answered (details supplied); and if he will make a statement on the matter. [23150/14]
Amharc ar fhreagraParliamentary Question 68 answered on the 15th May 2014 was in relation to an individual case. It is not appropriate for me, as Minister, to become involved in such cases. However, I hope the general information in relation to early repayment and mortgage arrears provided in the answer was of value to the Deputy. I would like to remind the Deputy that the Financial Services Ombudsman can investigate unresolved complaints made to regulated financial service providers or providers that are subject to the terms of the Consumer Credit Act, 1995.
158. Deputy Finian McGrath asked the Minister for Finance the position regarding money owed to persons (details supplied) in Dublin 13 by the Revenue Commissioners; and if he will make a statement on the matter. [23198/14]
Amharc ar fhreagraI am advised by the Revenue Commissioners that due to an error on Revenue's part, the taxpayers concerned paid an excessive amount of tax for the years in question. Revenue's records reflected that the taxpayers were in receipt of a payment from the Department of Social Protection when in fact they were not. On 3 April 2014 the taxpayers requested a full review of their tax affairs. A refund amounting to €9,504.82 issued on 7 May 2014 for the years 2010 to 2013. Revenue has now carried out a review of the earlier years and advise that additional refunds are due which will issue shortly. They will contact the taxpayers to clarify the situation and apologise for the inconvenience caused.
159. Deputy Sean Fleming asked the Minister for Finance if he will consider extending the principles in the home renovation incentive in Finance Act (No. 2) 2013, an aim of the incentive which is to support tax compliant building contractors by introducing a similar type of measure for persons who wish to claim mortgage interest relief from the Revenue Commissioners as a way of ensuring that only persons who are tax compliant in the construction industry will have a clear advantage over those operating in the shadow economy in view of the fact that he has stated in Parliamentary Question No. 59 of 15 May 2014 that he would not ask the banks to get involved in this process but the Revenue Commissioners could have a role in relation to mortgage interest relief; and if he will make a statement on the matter. [23209/14]
Amharc ar fhreagraAs I stated in my previous reply to the Deputy, I introduced the Home Renovation Incentive in Finance Act (No 2) 2013. The aim of the Incentive is to support tax compliant building contractors by moving activity out of the shadow economy into the legitimate economy. In order to qualify for the tax credit, the works must be carried out by legitimate contractors on a homeowner's main residence. The homeowner must also be property tax compliant.
In order to qualify for mortgage interest relief (MIR), a loan must have been drawn down and used in the purchase, repair or development of an individual's principal private residence on or before 31 December 2012. On this basis any funds drawn down on a date later than 31 December 2012 do not qualify for the relief. Existing claimants of mortgage interest relief, will however retain the relief until the 2017 tax year at which stage it is scheduled to expire. As no new loans can qualify for mortgage interest relief, it would not be possible to tie the relief to tax compliant building contractors in the manner suggested by the Deputy.
160. Deputy Lucinda Creighton asked the Minister for Finance if he will confirm whether Allied Irish Banks have adopted a joint approach for compensating all borrowers affected by a former investment manager (details supplied) who is currently on the run and subject to a Garda-Interpol investigation; if he will confirm what, if any, compensation has been provided by Allied Irish Banks to those clients affected by a former investment manager's alleged criminal acts; and if he will make a statement on the matter. [23210/14]
Amharc ar fhreagraIn line with normal practice AIB is precluded from discussing or divulging details of individual customer circumstances. The bank is also precluded from commenting in any way on matters that are the subject of a Garda investigation or on any allegations of criminal acts and malpractice.
161. Deputy Bernard J. Durkan asked the Minister for Finance if meaningful discussions can be entered into between the Revenue Commissioners and a person (details supplied) in County Kildare in respect of various taxation issues, most of which were not of their making, which have resulted in personal and financial difficulties of a very serious nature; if urgent arrangements will be made for discussions at senior level regarding a view to resolution; and if he will make a statement on the matter. [23230/14]
Amharc ar fhreagraI am advised by Revenue that the 'taxation issues' to which the Deputy refers in his Question arose from a Revenue audit. I am further advised that responsibility for the correct calculation and timely payment of tax is always the responsibility of the individual taxpayer, notwithstanding that a tax practitioner or company accountant may be engaged to manage the various issues.
In relation to the specific circumstances of the case in question, Revenue has confirmed to me that the outstanding liabilities were only referred for debt collection/enforcement after numerous attempts to engage with the person failed. Revenue has also confirmed to me that as a general rule in such scenarios, it will attempt to work with taxpayers to resolve difficulties in preference to using enforcement powers, which are deployed as a last resort.
Finally, Revenue has informed me that it is still willing to engage with the person providing there are meaningful proposals to deal with the difficulties. If the person now wishes to discuss the outstanding issues then he should contact Mr. Leonard Burke, Principal Officer at 061-488551.
162. Deputy Olivia Mitchell asked the Minister for Finance the measures that exist for those persons who were sold endowment mortgages in the 1990s and who now, on coming near the end of the mortgage term, have been advised that there will be a major shortfall in the policy; and if he will make a statement on the matter. [23235/14]
Amharc ar fhreagra163. Deputy Olivia Mitchell asked the Minister for Finance if there are regulations governing endowment mortgage policies; if there is recourse for those who believe they were mis-sold such a policy; and if he will make a statement on the matter. [23236/14]
Amharc ar fhreagraI propose to take Questions Nos. 162 and 163 together.
Firstly, I must confirm to the Deputy that it is not appropriate for me, as Minister for Finance to comment on or become involved in the detailed mortgage position of mortgage holders. The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. I understand from the Central Bank, that where the proceeds of an endowment policy are insufficient to repay the capital element of an endowment mortgage, borrowers should be given ample time to make alternative repayment arrangements. Borrowers are afforded the protections of the Code of Conduct on Mortgage Arrears in cases where the mortgage is in arrears or in pre-arrears and is secured by the borrower's primary residence.
The Central Bank's Code of Conduct on Mortgage Arrears applies to mortgage lending activities with borrowers in respect of their principal private residence in the State. Compliance with the Code is mandatory on all mortgage lenders registered with the Central Bank. The Code provides a number of protections to borrowers. These include the establishment of a formal Mortgage Arrears Resolution Process (MARP) to deal with mortgage customers who are in arrears or in pre-arrears, the establishment of a dedicated Appeals Support Unit and a separate internal appeals process by lenders to deal with individuals on a case by case basis. A copy of the Code is available on the Central Bank's website www.centralbank.ie. People in debt or in danger of getting into debt can avail of the services of the Money Advice and Budgeting Service. This is a national, free, confidential, and independent service.
164. Deputy Joe Higgins asked the Minister for Finance if he has a projection from the principal banks in the State on the number of homes they will attempt to repossess in 2014 to 2015 due to mortgage distress by owner-occupied mortgage holders. [23243/14]
Amharc ar fhreagraThere are no estimates or projections for the level of repossessions that may arise due to mortgage default. While the repossession of a principal dwelling house consequent upon mortgage default should only be considered as a last option for a person in genuine difficulty, repossessions do arise and this can be expected to continue as long as the mortgage crisis remains. It should be noted, however, that when repossessions do arise, most are of a voluntary nature and the legal repossession route only arises in a minority of cases.
The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) places an onus on the banks, in respect of a co-operating borrower, to explore all the options for an alternative repayment arrangement offered by the lender to address a primary dwelling mortgage difficulty before any legal action is considered.
The Central Bank's Mortgage Arrears Resolution Targets (MART) process, as announced in March 2013, sets time bound and measurable targets for the main banks requiring them to systematically address their arrears book. Under this rolling process, quarterly performance targets have so far been set to the end of June 2014 to require the banks to propose and put in place durable long term solutions to address individual cases of mortgages in difficulty where the mortgage is more than 90 days in arrears. The Deputy will be aware that the Central Bank has now concluded its audit and assessment of a sample of the banks' end 2013 target returns. Based on the information submitted, the Central Bank has advised that the banks have indicated they have met the targets of proposing solutions to 50% and concluding solutions for 15% of those in arrears greater than 90 days.
The Central Bank has advised that its MART publication of last March 2013 clearly indicates that where a lender relies on legal action to address an arrears situation it must be able to demonstrate that an alternative arrangement could not be reached or is not appropriate. Furthermore, if such a decision is made by the lender, the cooperating borrower has the right to appeal a decision not to offer an alternative repayment arrangement.
Of course, the CCMA and MART can only work in circumstances where the borrower cooperates with the lender and engages with the process. Where this does not happen, the lender may have no other option but to go down the legal route to deal with an arrears case. However, if that course of action leads the borrower to commence a constructive engagement, this can lead to a more favourable outcome for the respective parties. The Deputy may wish to note, that according to information collected by my Department in respect of the end of March, some 62,000 principal dwelling mortgage accounts in difficulty have been the subject of permanent restructuring following engagement between borrower and lender.
It is important to point out that even if a repossession case has commenced in the legal system, the Land and Conveyancing (Law Reform) Act 2013 provides the power to the Court to adjourn a repossession proceeding in relation to a principal private residence to enable the borrower to consult a personal insolvency practitioner (PIP) and, where appropriate, to instruct the PIP to make a Personal Insolvency Arrangement (PIA) proposal. In formulating a proposal for a PIA, the Personal Insolvency Act 2012 places an onus on a PIP to do so on terms that shall not, insofar as is reasonably practicable, require the borrower to dispose of an interest or cease to occupy a principal private residence.
The strong view of the Government is that, in respect of co-operating borrowers under the Mortgage Arrears Resolution Process, repossession of a person's primary home should only be considered as a last resort and that every effort should be made to agree a sustainable arrangement as an alternative to repossession. Even after the commencement of the legal process, it will be possible for lenders and borrowers to reengage and it will be in the best interests of the parties if that happens.
165. Deputy Joe Higgins asked the Minister for Finance if the National Asset Management Agency has been required to take any urgent, special steps to make suitable accommodation available to deal with the crisis of homelessness. [23244/14]
Amharc ar fhreagraThe Deputy may be aware that NAMA has identified over 4,600 residential properties, controlled by its debtors and receivers, as being available and potentially suitable for social housing provision. Local authorities, working through the Housing Agency, have confirmed demand for just over 1,800 of these properties. To end-March 2014, 684 of these 1,800 residential properties had been delivered through local authorities and approved housing bodies for social housing. As a means of expediting the delivery of properties for which demand has been confirmed, NAMA established a Special Purpose Vehicle, National Asset Residential Property Services Ltd., to acquire units from its debtors and receivers for onward leasing by approved housing bodies. NAMA has no role in determining which of the units it has made available are ultimately taken up for social housing. This is a matter entirely for the relevant housing bodies. Further details on NAMA's role in supporting the delivery of social housing will be set out in the Agency's Annual Report for 2013, which will be published today May 27th.
NAMA is also making a very significant contribution to the supply of residential properties and has committed to funding the delivery of 4,500 homes in Dublin over the period to end 2016. To put this contribution in context, just over 1,200 new residential units were completed in Dublin in 2013. NAMA is also examining the scope to support the delivery of residential supply beyond 2016.
166. Deputy Joe Higgins asked the Minister for Finance the total amount of interest payments on the national debt for 2012, 2013 and projected for 2014; if he will break down the major entities in receipt of the interest by amount per entity. [23245/14]
Amharc ar fhreagraNational debt cash interest and General Government interest expenditure for the years 2012 to 2014 are set out in the following table.
|
€ million |
2012 |
2013 |
2014** |
|
|
National Debt Cash Interest |
5,679 |
7,316* |
7,752 |
|
|
Interest Expenditure (EDP_D41) |
6,135 |
7,681 |
7,966 |
*Provisional unaudited outturn.
**April 2014 SPU forecasts.
A high level breakdown of interest payable by debt product is currently available for 2012 see the following table.
|
National Debt Cash Interest €million |
2012 |
|
Government Bonds |
4,075 |
|
EU/IMF Programme Funding |
1,369 |
|
State Savings Schemes |
284 |
|
Short Term Debt |
39 |
|
Other |
42 |
|
Interest Receivable |
-129 |
|
Total |
5,679 |
Rounding may affect totals.
It is the case that cash interest of just under €0.65 billion payable in 2013 on the floating rate bonds issued in 2013 to replace the IBRC Promissory Note was paid to the Central Bank of Ireland (CBI), as the holder of the floating rate bonds.
167. Deputy Joe Higgins asked the Minister for Finance the amount of interest on the national debt that is accounted for by the bailout of the banks in 2012, 2013 and projected for 2014. [23246/14]
Amharc ar fhreagraThe proceeds of all borrowing as well as revenues including tax and non-tax, and capital receipts are lodged to the Exchequer account to fund general expenditure. In general terms, no specific tranches of borrowing were undertaken solely for the purpose of recapitalising the banking sector. Therefore, that part of the debt interest bill that relates to general borrowing used to recapitalise the banks can only be estimated.
Capital injections into Irish banks from 2009 to 2011 can be separated into three categories.
(1) Capital injections that were made under Ministerial direction by the NPRF Commission amount to €18.8 billion (net of the sale of Bank of Ireland preference shares in 2013). There is no interest cost associated with these payments as they did not require borrowing.
(2) The promissory notes to IBRC and EBS added €30.85 billion to the general government debt, but not the national debt, in 2010. There was an interest holiday on the IBRC promissory note repayments in 2011 and 2012 and thus zero interest was payable for these years. In 2013 promissory note interest of €214 million was payable up to the date of IBRC's liquidation. General government interest is also payable on the EBS promissory note for all years with an average of €12 million payable between 2012 and 2014. Under the terms of the promissory note an annual payment €3.085 billion was to be made to the beneficiary banks. This payment was made in cash in 2011, and the IBRC element (€3.06 billion) was paid by way of a government bond in 2012. Both these payments impacted the national debt and incurred general government interest costs of approximately €0.3 billion in each of the years 2012 to 2014. The IBRC promissory notes were cancelled and replaced with a portfolio of eight floating rate Government bonds for a total amount of €25 billion. The bonds pay interest every six months (June and December) based on the six month EURIBOR interest rate plus an interest margin. The margin averages 2.63% across the eight issues. This gave rise to payments of €0.65 billion in 2013 and an estimated €0.8 billion in 2014. The Deputy should note that these payments contribute significantly to the surplus income of the Central Bank, up to 80% of which is paid to the Central Fund in the following year.
(3) By the end of 2013, €10 billion (net of the sale of Bank of Ireland equity in 2011, the sale of Irish Life and the sale of contingent capital notes in 2013) is estimated to have been paid through direct payments from the Exchequer account to the banking sector.* Although no specific borrowing was made in the cases of interventions paid through the Exchequer, the impact can be estimated using the average rate of interest on government debt.
The average rate of interest on general government debt for 2013 is given as 4% in my Department's Stability Programme Update, 2014 published last month. Using this interest rate to estimate the impact of injections into the banking sector from the Exchequer account gives estimated interest costs of €0.45 billion in 2012, €0.5 billion in 2013 and €0.4 billion in 2014.
*This figure excludes fees paid to the Minister under the Credit Institutions Financial Support and Eligible Liabilities Guarantee schemes amounting to €4.4 billion from 2008 to 2014.
