Written Answers Nos. 230-243
230. Deputy Michael McGrath asked the Minister for Finance the basis of the calculation that the cross-border EU telecommunications broadcasting and electronically supplied services VAT change will yield €100 million to the Exchequer in 2015; and if he will make a statement on the matter. [40118/14]
Amharc ar fhreagraAs you will be aware, from 1 January 2015 cross-border EU telecommunications, broadcasting and electronically supplied services to private consumers will be charged to VAT in the Member State of the consumer, and not in the Member State of the supplier as is the case currently. This VAT change means that Member States will lose VAT revenue in respect of existing outward sales to consumers in other Member States but will gain revenue in respect of inward sales to their own consumers of these services. The new rules will level the playing field in Europe by removing the incentive for companies to locate in low VAT rate jurisdictions, which should enhance Ireland's attractiveness for e-services companies.
The services affected by these changes include mobile and fixed-line telephone services; radio and television broadcasting services and electronically supplied services such as apps, music, online games, e-books, digital newspapers and web hosting services.
The place of supply changes include transitional measures, which provide that Member States can retain 30% of the VAT revenues on outward supplies of electronic services in 2015 and 2016; 15% of revenues in 2017 and 2018, after which the full VAT revenue will accrue to the consumer's Member State.
The Budget announced an estimated yield to the Irish Exchequer in 2015 of €100 million from the place of supply changes. The reason Ireland is set to gain from the VAT changes is because we are a net recipient of electronic and broadcasting services from other Member States. Figures were sourced by my officials and by the Revenue Commissioners on the quantity of telecommunications, broadcasting and electronically supplied services made to customers in Ireland from other Member States, and such services supplied from Ireland to customers in other EU countries. In terms of inward supplies, the estimate is mainly driven by 1) UK-based television services and 2) Luxembourg-based electronically supplied services. In addition, Ireland has a small level of VAT outflows relating to these services, in areas such as gaming, apps and virus protection software, supplied from Ireland to the EU. The €100 million estimated gain in 2015 is a result of extrapolating the VAT from the estimated level of supplies as outlined above, and taking into account the transitional measures.
231. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the case in respect of eligibility for a primary medical certificate may be reviewed in respect of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [40121/14]
Amharc ar fhreagraThe Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and Vehicle Registration Tax (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, and exemption from motor tax in respect of that vehicle, and relief from excise duty on fuel (up to a certain limit). To qualify for the scheme, an applicant must hold a Primary Medical Certificate.
To receive a Primary Medical Certificate, an applicant must be permanently and severely disabled within the terms of these Regulations and satisfy one of the following conditions:
1. be wholly or almost wholly without the use of both legs;
2. be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
3. be without both hands or without both arms;
4. be without one or both legs;
5. be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
6. have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The Senior Medical Officer for the relevant local Health Service Executive administrative area makes a professional clinical determination as to whether an individual applicant satisfies the medical criteria. A successful applicant is provided with a Primary Medical Certificate, which is required to claim the reliefs provided for in the Regulations. An unsuccessful applicant can appeal the decision of the Senior Medical Officer to the Disabled Drivers Medical Board of Appeal, which makes a new clinical determination in respect of the individual.
I would point out that Regulation 6(1)(e) of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994 (S.I. 353 of 1994) provides that the Medical Board of Appeal is independent in the exercise of its functions.
232. Deputy Fergus O'Dowd asked the Minister for Finance if he will extend the living city initiative to Drogheda and Dundalk in County Louth; and if he will make a statement on the matter. [40124/14]
Amharc ar fhreagraThe Deputy will be aware that the Living City Initiative includes the cities of Dublin, Cork, Galway and Kilkenny as well the original target cities of Limerick and Waterford. The inclusion of these four cities within the Initiative followed the results of a thorough independent ex ante cost benefit analysis.
I do not intend to extend the Initiative further than these 6 cities.
The Initiative will target certain areas of these six cities, particularly those areas which are most in need of regeneration. Those designated areas will be decided upon following consultations with the relevant local authorities and other Government agencies. It is important to note that I do not see this as a wide-spread Initiative, as it is targeted at those areas which are most in need of attention.
233. Deputy Sean Fleming asked the Minister for Finance the taxation rules regarding the sale of land with a forestry crop and that the sale of the land is subject to capital gains tax but the part of the proceeds attributable to the trees is subject to universal social charge whereas the sale of other crops on the land is all subject to capital gains tax and no portion of the proceeds is subject to universal social charge; and if he will make a statement on the matter. [40178/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that where an individual disposes of woodland, the consideration for the disposal of the trees growing on the land and saleable underwood are not taken into account for capital gains tax purposes. Thus, where land held by an individual is sold with standing timber on it, the consideration for the disposal is to be apportioned and the part of the consideration attributable to the trees or saleable underwood is excluded. Insurance proceeds received by an individual in respect of the destruction of or damage to standing timber or saleable underwood are also excluded for capital gains tax purposes.
As the consideration for trees growing on the land and saleable underwood is excluded from the sale proceeds of woodland, such part of the cost of the woodland attributable to standing timber and saleable underwood is also excluded in computing any gain or loss on the disposal.
The relief applies to individuals only. It does not apply to companies or other bodies of persons.
The consideration relating to trees growing on the land and the saleable underwood continues to be regarded as income arising from a trade or profession and, in the normal course of events, is liable to income tax, PRSI and USC. However, such income benefits from a specific income tax exemption. There is no equivalent exemption in relation to PRSI and USC.
234. Deputy Tom Fleming asked the Minister for Finance the position regarding property tax in respect of a person (details supplied) in County Kerry; and if he will make a statement on the matter. [40205/14]
Amharc ar fhreagraI am informed by Revenue that Deduction at Source (DaS) of Local Property Tax (LPT) liabilities from Department of Social Protection (DSP) payments cannot be facilitated where the arrangement reduces a person's take home amount to below the minimum weekly rate of supplementary welfare allowance. This 'de minimus' weekly amount, which is currently €186, is enshrined in social welfare legislation and it was considered, at the time of the introduction of LPT that it was not appropriate to change the law in this regard.
In regard to the specific case to which the Deputy refers, the person in question is meeting his LPT liabilities through DaS from his DSP payment and is fully up to date with his obligations in respect of 2014. His arrangements in this regard will automatically continue into 2015. The difficulties relate to an outstanding balance of €21 in respect of 2013, which arose as a consequence of a late start to his DSP deductions and a €200 arrear of Household Charge. The person would like to meet these arrears by increasing his DaS but to do so would bring him below the 'de minimus' threshold.
Given the circumstances of the case, a member of the LPT team made direct contact with the person and firstly explained the Deferral option that exists for people on low incomes. The person declined the Deferral option and indicated that he wanted to pay his LPT liabilities. The LPT team member then confirmed to him that his DaS is in order for 2014 and will continue 'as is' to fully meet his 2015 liabilities but could not be extended to meet the 2013 LPT/HHC arrears due to the 'de minimus' threshold.
The LPT team member also outlined the various other payment options that are available to him given that he did not want to avail of a Deferral. From the conversation it emerged that the person misunderstood the conditions for payment of LPT via a service provider (PSP) and was of the opinion that only payments in excess of €50 could be made via this method.
On the basis of the conversation the person opted to pay his outstanding arrears through a PSP and the LPT team member assisted him to activate the payment option. I am assured that the issues are now resolved and the person is meeting his LPT/HHC obligations in a manner that suits his individual circumstances.
235. Deputy Jim Daly asked the Minister for Finance if he is satisfied with a small business being imposed with a fine of €4,000 for a late filing of a VAT return noting the tax compliant history of the business and in view of the fact that the VAT was overpaid and in a refund; if he will request the Revenue Commissioners to review their decision; and if he will make a statement on the matter. [40216/14]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the company in question remits its VAT liabilities using the Direct Debit payment system. I am further informed by Revenue that they facilitates the company in making payments during its busy summer trading months only rather than on a monthly basis, which is the norm for Direct Debit customers.
Revenue acknowledges that the company fully meets its payment obligations, but has said that the company has an unacceptable compliance record in regard to the filing of statutory VAT Returns, despite the fact that it is only required to file an annual VAT return as distinct from non-Direct Debit Customers who are obliged to file on a bi-monthly basis.
Revenue has informed me that they have consistently warned the company of the requirement and importance of timely filing but it has failed to respond to the various reminders. For example, the last 3 Returns have been 3 months, 5 months and 6 months late. The Deputy will be aware that timely filing of tax returns is a statutory requirement and Revenue must apply the law as set down in a consistent manner in fairness to the vast majority of taxpayers who arrange their affairs in a manner that ensures payment and filing obligations are met as they fall due.
Notwithstanding the above, Revenue has carried out a further review of the case on foot of correspondence received from the company's accountants. The senior official examining the case will shortly make contact with the accountants to discuss the issue. However Revenue has clearly indicated to me that any possible mitigation must be predicated on the timely filing of all future tax returns.
236. Deputy John McGuinness asked the Minister for Finance if a tax clearance certificate has been issued to a community group taxpayer (details supplied); and if correspondence issued to the Revenue Commissioners will be responded to. [40217/14]
Amharc ar fhreagra241. Deputy Arthur Spring asked the Minister for Finance the reason the Revenue Commissioners have refused a company (details supplied) a tax clearance certificate on the basis that it has a corporation tax return outstanding in view of the fact that this company has not registered for corporation tax; the reason the Revenue Commissioners refused to take into consideration that the company wrote to the Revenue Commissioners in October 2012 and May 2013 without response ; and if this issue will be resolved on a permanent basis. [40333/14]
Amharc ar fhreagraI propose to take Questions Nos. 236 and 241 together.
I am advised by the Revenue Commissioners that although the community group taxpayer referred to was initially refused a tax clearance certificate, the necessary certificate was issued on 18 August 2014. I am further advised that the Commissioners have contacted the group in question to invite them to progress an application for Charitable Tax Exemption which appears to be more appropriate in this case.
Regarding the agent involved, the Commissioners advise me that they have put arrangements in place to provide a single point of contact for all of his contacts and correspondence with a view to providing a more streamlined and coherent service.
237. Deputy Dara Calleary asked the Minister for Finance if the €100 tax rebate on water charges will be extended to persons who pay for their water through a group water scheme as well as those who are customers of Irish Water; his views on not offering the rebate to group water scheme customers to be discriminatory; and if he will make a statement on the matter. [40222/14]
Amharc ar fhreagra238. Deputy Brian Stanley asked the Minister for Finance the reason persons on group water schemes are not given the same tax relief as customers of Irish Water. [40266/14]
Amharc ar fhreagraI propose to take Questions Nos. 237 and 238 together.
As the Deputy is aware, I announced in the Budget that tax relief for water charges will be introduced. Relief will be available at the standard rate of 20%, on water charges paid, up to a maximum of €500 per annum, which may result in tax relief up to €100.
I can confirm that individuals who pay charges in respect of group water schemes will also qualify for the relief.
239. Deputy Brendan Griffin asked the Minister for Finance the changes there are to stamp duty in budget 2015 in relation to the transfer of either property or land here; and if he will make a statement on the matter. [40287/14]
Amharc ar fhreagraOn Budget Day I published the report of the Agri-Taxation Review, which I announced in last year's Budget. Arising from the recommendations in the Review, I am introducing a number of tax measures to support farming.
The following Stamp Duty measures announced on Budget Day relate to the transfer of either property or land:
Consanguinity Relief
Consanguinity relief, which applies to transfers of non-residential property to certain relatives, is due to expire on 31 December 2014.
This relief, which halves the applicable rate of Stamp Duty, will be available in a restricted form for a further period of three years in certain circumstances where the transferor is 65 years or under and the transferee is an active farmer.
Agricultural Leases
Agricultural leases between 5 and 35 years in duration to active farmers will be exempt from Stamp Duty.
Further details on these measures will be available in the Finance Bill which is due for publication on 23 October 2014.
240. Deputy Seán Kyne asked the Minister for Finance further to Parliamentary Question No. 173 of 6 May 2014, if he will provide an update regarding unfinished housing estates affected by the liquidation of the former Irish Bank Resolution Corporation with particular reference to bonds originally intended to rectify deficiencies. [40323/14]
Amharc ar fhreagraI am advised that the Department of the Environment, Community and Local Government are continuing to work with the relevant local authorities to ascertain the actual level of exposure that exists in relation to the development bonds previously entered into by IBRC in favour of the various County Councils or local authorities. Once that exposure is quantified the local authorities will submit a claim to the Special Liquidators in respect of the bonds. This information will be provided directly to the Special Liquidators in order to allow them to register that claim on the liquidation of IBRC.
It is likely that any liabilities arising under bonds/guarantees/indemnities entered into by IBRC in favour of the various County Councils are contingent claims against IBRC Limited (in Special Liquidation) and such claims, if called upon, will rank as unsecured claims in the special liquidation.
242. Deputy John Deasy asked the Minister for Finance if his attention has been drawn to the fact that the 10% tax on UK dividends paid to Irish residents, which is deducted at source in the UK, is then subject to tax here at the marginal rate on the net 90% received and that this means tax on UK dividends is now the highest rate of tax on income; his views that this is fair on pensioners who were relying on UK dividends to top up their income; and if he will make a statement on the matter. [40334/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the 10% tax referred to by the Deputy is part of the tax paid by the company and not a tax on the dividends themselves. Accordingly, dividends paid by a UK company to an Irish resident taxpayer are not subject to any taxation in the United Kingdom.
Where a pensioner has UK dividend income, it is taxable in the normal way in this country. However, pensioners are entitled to an additional tax credit and/or greater exemption ceilings, which are not available to other taxpayers.
Any individual or a couple in a marriage or civil partnership, aged 65 or over, whose income from all sources (including any UK dividend income) is less than or equal to the exemption limit will not have to pay income tax for that year. The exemption limit applies where the total income is less than €18,000 for a single individual, widowed person or surviving civil partner and €36,000 for a married couple or civil partnership couple.
These exemption limits are increased by €575 for each of the first two children and by €830 for each subsequent child.
Any individual or a couple in a marriage or civil partnership aged 65 or over whose income from all sources is slightly over the exemption limit may qualify for marginal relief. Marginal Relief will only be granted if it is more beneficial to the claimant than their tax credits.
In addition, the over 70s are only liable to a maximum rate of USC of 4% on their income where it does not exceed €60,000. This rate is reducing to 3.5% from next year as part of the Budget changes to the income tax system.
243. Deputy Billy Timmins asked the Minister for Finance the position regarding former customers of all institutions with mortgages transferred to the Irish Bank Resolution Corporation, now in liquidation, who are concerned about what the future holds for them regarding the sale of their loans; the current position on the code of conduct on mortgage arrears that has been applied to the purchasers of these loans in order that the mortgage holders will have protection; and if he will make a statement on the matter. [40339/14]
Amharc ar fhreagraIn relation to mortgage loans previously sold by IBRC, the Special Liquidators sought and received the agreement of bidders and the ultimate purchasers of IBRC mortgage loans to voluntarily comply with the terms of the Code of Conduct on Mortgage Arrears. I understand that these mortgages are currently being serviced in line with those terms.
In relation to all remaining unsold residential mortgages in IBRC, the Special Liquidators have devised a further sales process (which is referred to as Project Pearl) so as to maximise the return to all remaining creditors of IBRC, including the State. This new sales process is currently underway and is expected to be completed before 31 December 2014.
The Department of Finance has prepared the Sale of Loan Books to Unregulated Third Parties Bill in order to address concerns surrounding the continued applicability of the Code of Conduct on Mortgage Arrears after the sale of loan books to unregulated entities. Detailed engagement with the Attorney General's office and the Central Bank on draft legislation has commenced and in July and August of this year, my Department ran a public consultation seeking views on its proposed legislation to protect consumers whose loans are sold to unregulated entities. The Department of Finance received 18 submissions from a range of respondents from the financial services industry, consumer groups, public representatives and individuals and other stakeholders.
Officials in my Department are carefully considering the submissions and it is anticipated that legislation will be published by the end of this year.
