Dessie Ellis
Ceist:82. Deputy Dessie Ellis asked the Minister for Finance the number of persons in mortgage distress as of the latest calculable month and the duration of their distress. [24083/15]
Amharc ar fhreagraMortgage Arrears Rate
Ceisteanna (82)
Freagraí scríofa
The Deputy will be aware that the Central Bank prepare quarterly statistical bulletins on Residential Mortgage Arrears and Repossessions, the most recent of which was published on 4th June last in respect of Quarter one 2015.
I am informed by the Central Bank that the CBI mortgage arrears data relate to the number of accounts rather than people in arrears. The number of primary dwelling home (PDH) accounts in mortgage arrears at end-March 2015 was 104,693, representing a decline of 5.1 per cent relative to quarter four of 2014. Of this figure, the arrears breakdown was as follows:
- In arrears up to 90 days: 30,298
- In arrears 91-180 days: 8,229
- In arrears 181-360 days: 10,696
- In arrears 361-720 days: 17,537
- In arrears over 720 days: 37,933
The number of PDH mortgage accounts in arrears over 90 days (74,395) continued to fall during quarter one, the sixth consecutive decline in the number of PDH accounts in arrears over 90 days. The number of PDH accounts in arrears for more than 720 days continues to rise, although the pace of increase in this category has reduced significantly in recent quarters.
Tax Code
Ceisteanna (83)
Joan Collins
Ceist:83. Deputy Joan Collins asked the Minister for Finance if he agrees that funds raised to support the health service should be subject to value added tax; if not, if he will consider making provision in the budget to exclude moneys provided by charitable organisations (details supplied), particularly moneys used to support public services, from being subject to value added tax in order that all moneys go into these projects; and if he will make a statement on the matter. [24095/15]
Amharc ar fhreagraFreagraí scríofa
VAT is a tax on consumption and is applied to supplies being made by a person and not to supplies received by them.
Non-profit groups engaged in non-commercial activity are exempt from VAT under the EU VAT Directive. This means that they do not register for VAT and cannot recover VAT incurred on goods and services that they purchase. This non-entitlement to VAT deductibility is a general feature of VAT exemption.
There is no provision in either European law or Irish VAT law to allow a zero-rating or exemption for supplies of this nature. However, there is a specific VAT Refund Order (SI 58 of 1992) that provides VAT incurred on the purchase or importation of new medical instruments and appliances (excluding means of transport), which is purchased through voluntary donations, may be refunded to hospitals or donors, as appropriate, subject to conditions. Further information on the Refund Order, its conditions and the refund claim for VAT 72 is available on the Revenue website www.revenue.ie.
Tax Data
Ceisteanna (84, 85, 86)
Paul Murphy
Ceist:84. Deputy Paul Murphy asked the Minister for Finance if he will provide, in tabular form, the number of tax opinions issued by the Revenue Commissioners each year for the past five years and if he will provide a breakdown of the number provided to persons, small and medium enterprises, larger enterprises and to companies based outside the jurisdiction. [24157/15]
Amharc ar fhreagraPaul Murphy
Ceist:85. Deputy Paul Murphy asked the Minister for Finance the number of tax opinions issued in the past five years, in tabular form, by type of transactions and-or concerns, including the numbers that relate to transfer-pricing arrangements and with cross-Border implications. [24158/15]
Amharc ar fhreagraPaul Murphy
Ceist:86. Deputy Paul Murphy asked the Minister for Finance the number of requests for tax opinions that have been refused by the Revenue Commissioners in the past five years, on the basis that the seeking of the opinion was suspected to be part of an arrangement designed to avoid tax or a duty. [24159/15]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 84 to 86, inclusive, together.
I am advised by the Revenue Commissioners that, in discharging their statutory role in relation to the administration and collection of taxes, the Revenue Commissioners provide a range of information, including tax opinions, to taxpayers to assist them in understanding and complying with their obligations under tax law.
Revenue has published detailed guidelines on the provision of tax opinions which are available on Revenue's website at www.Revenue.ie. While it is open to any taxpayer to seek an opinion from Revenue on the tax treatment of a particular transaction or activity, the circumstances in which a taxpayer should require an opinion from Revenue are relatively limited. This is because Revenue already publishes extensive detailed information on the application of tax legislation in various tax briefings and guidelines which are available on the Revenue website.
An opinion will be provided by Revenue where the issues are complex, information is not readily available or there is genuine uncertainty in relation to the applicable tax rules as set down in the legislation. An opinion will provide Revenue's view of the correct application of tax law to a particular transaction or situation so that the taxpayer can file a correct tax return as required under the legislation.
As statistics are not compiled on the number of tax opinions issued by Revenue each year, data on the number of opinions broken down between those issued to individual persons, small, medium and large enterprises, companies outside the jurisdiction and by type of transaction are not available. However, I can inform the Deputy that, in responding to the European Commission enquiries in relation to tax ruling practice in the various Member States, Revenue identified that in the period 2010-2012 the total number of advance opinions issued to companies on various matters relating to corporation tax was as follows:
Year Total
2010 99
2011 128
2012 108
In regard to transactions that may involve tax avoidance, the Revenue guidelines clearly state that Revenue will not provide an opinion where it is of the view that a proposed transaction is part of a scheme or arrangement the purpose of which or one of the purposes of which is the avoidance of tax. While, in accordance with these guidelines, Revenue refuses to provide opinions whenever it considers transactions would facilitate tax avoidance, it does not record the number of such refusals.
State Aid Investigations
Ceisteanna (87)
Paul Murphy
Ceist:87. Deputy Paul Murphy asked the Minister for Finance his views on the European Commission's preliminary finding that in several instances the methods for determining profit allocation between a company's subsidiaries (details supplied) here do not appear to comply with the arm's length principle for establishing transfer prices; and if he will make a statement on the matter. [24160/15]
Amharc ar fhreagraFreagraí scríofa
Last year, the European Commission announced its intention to open formal state aid investigations into tax rulings provided to a number of companies in various Member States of the European Union. More recently the Commission announced that it was broadening its enquiries to include all Member States.
I would like to emphasise that, while the Commission has opened a formal investigation in relation to one particular case involving Ireland, it has not made a final determination in the matter. As the Commission has acknowledged, Ireland has co-operated fully with the process to date and will continue to do so.
For state aid to exist in this case, the company must have been charged less tax than should have been charged under Irish tax legislation. As part of this formal investigation, the Commission wrote to Ireland to ask for our response to their concerns in relation to the particular case. Ireland has responded to this letter, comprehensively addressing the Commission's concerns and making it clear that the appropriate amount of Irish tax was charged in accordance with the relevant legislation, that no selective advantage was given and that there was no state aid.
This is a confidential matter between Ireland and the Commission and I am not in a position to comment on the specific details of our response as the matter is subject to a formal process of investigation and relates to a specific taxpayer.
While it would not be appropriate to speculate on the outcome at this stage, I remain of the view that there was no breach of State aid rules in this case and that the legislative provisions were correctly applied.
In the event that the Commission forms the view that there was state aid, as I and my colleagues in Government have already indicated Ireland will challenge this decision in the European Courts, to continue to vigorously defend the Irish position.
Tax Code
Ceisteanna (88)
Paul Murphy
Ceist:88. Deputy Paul Murphy asked the Minister for Finance his plans to publish the criteria used by the Revenue Commissioners to determine an advance pricing arrangement. [24161/15]
Amharc ar fhreagraFreagraí scríofa
I am advised by the Revenue Commissioners that, while tax legislation does not set out specific criteria for advance pricing arrangements (APAs), Revenue adheres to the published OECD and EU transfer pricing guidelines for all bilateral APAs concluded with treaty partner countries.
An advance pricing arrangement is defined in the 2010 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations ("TPG") as "an arrangement that determines in advance of controlled transactions, an appropriate set of criteria for the determination of the transfer pricing for those transactions over a fixed period of time".
An APA is formally initiated by a taxpayer and requires negotiations between the taxpayer, one or more associated enterprises and one or more tax administrations. Ireland will only enter into bilateral APAs with its treaty partners. As such, an APA involving Ireland will always involve two tax administrations, the other being a treaty partner country.
Bilateral APAs are agreed in accordance with the mutual agreement procedure article of the relevant double taxation treaty. For all bilateral APAs, Revenue adheres to the detailed guidelines for concluding APAs which are contained in "Annex to Chapter IV: Advance Pricing Arrangements" of the TPG. All of our bilateral APAs are negotiated on the basis of identifying an arm's length remuneration for the transactions covered by the APA and in each case the transfer pricing method applied will be in accordance with one of the methodologies contained in Chapter II of the TPG.
In addition, when negotiating a bilateral APA with an EU Member State, Revenue will adhere to the best practices for the conduct of APA procedures which are set out in the Guidelines for Advance Pricing Agreements within the EU which have been published by the EU Joint Transfer Pricing Forum.
Taxpayer Confidentiality
Ceisteanna (89)
Paul Murphy
Ceist:89. Deputy Paul Murphy asked the Minister for Finance in view of the support of the European Commission for the publication of tax rulings, his plans to publish, while taking measures to protect the appropriate privacy of persons and corporations, the details of tax opinions; and if he will make a statement on the matter. [24162/15]
Amharc ar fhreagraFreagraí scríofa
Under Irish tax law, taxpayer information is confidential and the Revenue Commissioners are prohibited from publishing taxpayer information or providing such information to third parties. Other EU Member States have a similar confidentiality rule in relation to taxpayer information, so that taxpayers can be assured of strict confidence and trust in providing full information in their dealings with the tax authorities. This assurance of confidentiality is subject to requirements to exchange information between tax authorities under bilateral and multilateral treaties and EU law.
Because of the statutory requirement in relation to confidentiality of taxpayer information, details of tax opinions issued to taxpayers are not published by Revenue. As Revenue opinions merely seek to apply the tax law to the particular facts and circumstances of a taxpayer, they are specific to the particular case and do not have general application. However, where Revenue considers that the issue on which an opinion is given is likely to be of more general interest to taxpayers, it will publish a tax briefing or guidance note on the matter to ensure that taxpayers are fully informed of their entitlements and obligations under the tax system.
In March this year, the European Commission adopted a proposal to amend Council Directive 2011/16/EU on administrative cooperation in the field of taxation to provide for mandatory automatic exchange of information between Member States in relation to advance cross-border tax rulings and advance pricing arrangements (APAs). Although they are not referred to as rulings and are non-binding, Revenue opinions on the application of tax law to particular transactions or activities would come within the scope of the Directive if adopted by the Council.
Ireland has welcomed the Commission proposal and officials of my Department and Revenue are participating in the discussions on this proposal that are currently taking place in the Council Working Group. While the proposed Directive will require the tax authorities of Member States to share information on cross-border tax rulings and APAs, it does not provide for the publication of these and any information exchanged under the Directive will be protected by the confidentiality laws in the EU Member States that apply to taxpayer information.
Tax Code
Ceisteanna (90)
Paul Murphy
Ceist:90. Deputy Paul Murphy asked the Minister for Finance his views on providing the Revenue Commissioners with powers to tackle transfer pricing that artificially boosts the profits of the Irish subsidiaries of multinational corporations; and if he will make a statement on the matter. [24163/15]
Amharc ar fhreagraFreagraí scríofa
Specific transfer pricing legislation was enacted in Ireland in the Finance Act 2010 and there is an increasing focus by the Revenue Commissioners, as for tax authorities in other countries, on ensuring that multinational profits are not understated.
Transfer pricing law and practice across countries seeks to ensure that the profits of multinational companies are not understated in each of the countries concerned, and this may result in upward adjustments to profits for tax purposes. Where a country makes an upward adjustment to a multinational company's profits then the relevant treaty partner country will typically make a matching downward adjustment to the multinational company's profits, to the extent that it accepts that the upward adjustment made by the other country was in accordance with the arm's length principle.
This bilateral, tax treaty-based interaction addresses overstatements of profits by multinationals in one country as a corollary of examinations to identify and quantify understatements of profits in another country a multinational's profits will only be reduced in one country where they have been increased in another country. Transfer pricing law and practice does not provide for, or result in, unilateral downward adjustments to company profits, separate from matching adjustments under tax treaties, and it would be inappropriate to provide powers to unilaterally reduce the taxable profits of multinational companies.
Tax Code
Ceisteanna (91)
Michael Healy-Rae
Ceist:91. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding inheritance tax; and if he will make a statement on the matter. [24177/15]
Amharc ar fhreagraFreagraí scríofa
Capital Acquisitions Tax (CAT) is the overall title for both Gift and Inheritance Tax. The tax is charged on the amount gifted to, or inherited by, the beneficiary of the gift or inheritance.
For the purposes of CAT, the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary), determines the maximum life-time tax-free threshold known as the "Group threshold" below which gift or inheritance tax does not arise.
There are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer.
The Group A tax free threshold of €225,000, applies where the beneficiary is a child (including adopted child, stepchild and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.
The Group B tax free threshold of €30,150, applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.
The Group C tax free threshold €15,075, applies in all other cases.
Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at a rate of 33% applies on the excess over the tax free threshold. In recent years these thresholds were reduced and the rate has been increased in order to maintain the yield from capital taxes in the face of falling asset prices and as part of our fiscal consolidation efforts. In addition, taxes on certain capital are less harmful from an economic perspective than taxes on employment.
I am aware that property values have increased, with developments which had been restricted to the Dublin area now manifesting in other areas of the country, though not to the same extent in terms of price rises. I recognise that this has a bearing on taxation of the inheritance and gifting of property with respect to CAT thresholds. In this light, I will be keeping Capital Acquisitions Tax thresholds, rates and other aspects of the tax under review, particularly in the context of preparations for Budget 2016 and the consequent Finance Bill.