Written Answers Nos. 68-75
68. Deputy Ciarán Lynch asked the Minister for Finance if he will confirm whether income tax is calculated on the full amount, inclusive of universal social charge, even though the universal social charge is deducted; his views on whether this is double taxation; and if he will make a statement on the matter. [14983/15]
Amharc ar fhreagraIncome Tax is imposed by section 12 of the Taxes Consolidation Act 1997 (TCA) and Universal Social Charge is imposed by section 531AM of the TCA.
In the case of Income Tax, the tax is charged on an individual's income from all sources, as calculated in accordance with provisions of the Income Tax Acts. Universal Social Charge is charged on an individual's income after any relief for certain trading losses and capital allowances, but before pension contributions.
In calculating the amount of Income Tax payable in a particular tax year, there is no provision to allow for a reduction in respect of any Universal Social Charge payable in the same tax year.
Income Tax, Universal Social Charge (and indeed PRSI) are separate and distinct charges on income and I would not agree that their imposition amounts to double taxation. These charges are aggregated when calculation of marginal tax rates is completed. For example, those who pay income tax at the standard rate only, in general face a marginal tax rate of 31%, which is comprised of 20% Income Tax, 7% USC and 4% PRSI.
69. Deputy Pearse Doherty asked the Minister for Finance to outline the commitments entered into by him on behalf of the State as part of the European Union-approved Permanent TSB restructuring plan. [14995/15]
Amharc ar fhreagra70. Deputy Pearse Doherty asked the Minister for Finance to detail the number of mortgages and the total value of mortgages Permanent TSB has agreed to sell as part of its European Union-approved restructuring plan; and if he will make a statement on the matter. [14996/15]
Amharc ar fhreagra71. Deputy Pearse Doherty asked the Minister for Finance to set out the nature of any cost-cutting measures agreed to by Permanent TSB under its European Union-approved restructuring plan; and whether the bank will reduce the number of employees as a result. [14997/15]
Amharc ar fhreagra72. Deputy Pearse Doherty asked the Minister for Finance to detail the cuts to the salaries of executives at Permanent TSB agreed to under its European Union-approved restructuring plan. [14998/15]
Amharc ar fhreagraI propose to take Questions Nos. 69 to 72, inclusive, together.
Firstly I would like to welcome the approval by the European Commission of the Permanent TSB Restructuring Plan last week. The approval is an important external validation that the plan contains a credible strategy to return Permanent TSB to profitability and brings to an end a period of uncertainty about what the future shape of the bank would look like which is important for all stakeholders including customers, staff and shareholders.
The Restructuring Plan includes a set of commitments which Permanent TSB will respect during the restructuring period. Those commitments comprise, among other things, targets on cost reduction and deleverage of non-core assets, mostly non-core UK mortgages or Irish Commercial Real Estate. Moreover, Permanent TSB will operate "market opening measures" to facilitate the market entry of competitors, comprising a "services package" and a "customer mobility package".
Permanent TSB has published details of the key elements of the plan on it's website at http://otp.investis.com/clients/uk/irish/rns/regulatory-story.aspx?cid=121&newsid=504083.
The European Commission will publish their full decsision on their website in due course and my officials will advise you when this has occurred.
While the Restructuring Plan requires that Permanent TSB's cost to income ratio and annual operating expenses should not exceed pre-determined limits it should be noted that compliance with these commitments, and any actions required to meet them, is a matter for the Board and Management of Permanent TSB, who are responsible for the day to day management of the Group.
In relation to Irish mortgage loans, Permanent TSB has committed to reduce the value of defaulted Irish Tracker mortgages through a combination of measures, including cures and asset sales by a pre-determined date and according to a pre-determined schedule. I am advised by Permanent TSB that it is their clear preference that such a reduction would be achieved by way of completed treatments in order to cure the defaulted loans rather than other means. Such an objective provides the best outcome for affected customers. If the target cannot be met through such an approach or by other means, then Permanent TSB would be required by the Restructuring Plan to sell such loans within the pre-determined timelines.
The Deputy may also be aware that The Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 was published in January and second stage of the Bill was taken in the Dáil on 4 February. Since then, my officials have been in contact with the Central Bank and with the Office of the Attorney General to further progress the legislation.
It remains my intention to ensure that borrowers whose loans are sold by a regulated entity to a currently unregulated entity maintain the same protections as they had prior to the sale. The Bill will continue its progress through the legislative process and I look forward to further discussion of the Bill at Committee Stage.
The legislation is not retrospective. However, it will apply to all loans as defined, regardless of when they were acquired, thus capturing loan books that have already been sold. A similar approach was used in 2013 in relation to debt management firms.
73. Deputy Seán Crowe asked the Minister for Finance whether Irish citizens who are living abroad and who have never bought a house here are still classified as first-time buyers under the new Central Bank mortgage rules if they return to Ireland, even if they have already bought and are planning to sell a house in another country. [15012/15]
Amharc ar fhreagraThe Central Bank has informed me that a first time buyer is defined as a borrower to whom no housing loan has ever before been advanced (in Ireland or abroad). Where the borrower under a housing loan is more than one person and one or more of those persons has previously been advanced a housing loan, none of those persons is a first-time buyer.
The Central Bank has decided to introduce proportionate limits specifically to allow flexibility by lenders when assessing individual cases. The proportionate limits mean that lenders will be able to make decisions based on an individual borrower's circumstances up to a specific limit. Lenders will still be required to assess an individual borrower's affordability and lend prudently on a case by case basis, in line with the requirements of the Consumer Protection Code and other regulations.
74. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form for each year since 2010 the number of cases brought before the Office of the Appeal Commissioners; the number of appeals that have been fully or partially upheld; the number rejected; and if he will make a statement on the matter. [15050/15]
Amharc ar fhreagraI am advised by the Appeal Commissioners that they do not maintain records which would facilitate a response in relation to the number or proportion of cases fully or partially upheld or rejected.
I am informed by the Revenue Commissioners that information in relation to appeal cases is not recorded in the format you requested for all of the years in question. However, the Revenue Commissioners have made the following information available in relation to the years 2012 and 2013 which may be of assistance:
Appeal Commissioners Decisions
|
Year |
For Revenue |
% of Total |
For Taxpayer |
% |
Split |
% of Total |
Total |
|
2013 |
84 |
71% |
32 |
27% |
2 |
2% |
118 |
|
2012 |
81 |
74% |
28 |
25% |
1 |
1% |
110 |
|
Total |
165 |
72% |
60 |
26% |
3 |
1% |
228 |
|
Summary of Appeals for 2012 and 2013 |
Total Appeals |
% of Total Appeals |
|
Appeals settled by agreement (this includes cases settled without being listed for hearing and cases listed for hearing but settled without being determined by the Appeal Commissioners) |
572 |
71% |
|
Appeals finalised at Appeal Commissioner stage (i.e. not appealed further to courts) |
149 |
19% |
|
Appeal Commissioners Determinations Appealed to Circuit Court |
61 |
7% |
|
Appeal Commissioners Determinations Appealed directly to High Court |
18 |
3% |
|
Total (2012 & 2013) |
800 |
100% |
75. Deputy Michael McGrath asked the Minister for Finance to explain the reason the Living City initiative, originally announced in October 2012, has not yet commenced; when he expects the initiative to be operable; his plans for further changes to the criteria for the initiative; and if he will make a statement on the matter. [15055/15]
Amharc ar fhreagraThe Living City Initiative was legislated for in Finance Act 2013 but will only come into operation on the passing of a Commencement Order. The reason for the delay in the initiative coming into effect was related to EU State Aid approval. A number of amendments were made to the Living City Initiative in Finance Act 2014. In particular, the Act incorporated new limits on the amount of qualifying expenditure on which relief can be claimed in relation to the conversion or refurbishment of certain commercial premises. The purpose of the amendments was to bring the LCI within the de minimis levels of State Aid. As such, we are now in the advanced stage of discussions with Limerick, Waterford, Dublin, Galway, Kilkenny and Cork City Councils and the Revenue Commissioners in order to finalise the eligible areas for relief under the Living City Initiative ("Special Regeneration Area" as defined in Section 372AAA Taxes Consolidation Act ("TCA") 1997) and to operationalise the relief. An order will be made to designate the Special Regeneration Areas and a Commencement Order will need to be made to bring the relief into operation. Work on this Initiative is at a very advanced stage and we intend to launch the Initiative soon.
There are currently no plans to make any changes to the criteria to qualify for the Living City Initiative but of course, the Initiative will remain subject to review following its implementation.
