Written Answers Nos. 110 - 132
110. Deputy Mick Wallace asked the Minister for Finance his plans to remove the 23% value added tax rate on school uniforms, which represents an additional burden on already financially pressed parents; and if he will make a statement on the matter. [27397/15]
Amharc ar fhreagraThe VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In this regard, the rate of VAT that applies to a particular good or service is determined by the nature of the good or service, and not by the status of the customer.
Children's clothing and footwear are subject to the zero rate for children which is defined as the average build of a 10 year old in the VAT Consolidation Act 2010. The zero rating applies according to the following criteria: all children's clothing of sizes up to and including 32" chest or 26" waist; and, children's footwear up to and including size 5½ (38 continental or equivalent).
Under the EU VAT Directive, Member States may retain the zero rates on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. As school uniforms for people over 10 years of age were not subject to the zero rate on 1 January 1991, it is not possible to apply the zero rate to these uniforms now.
In addition, Member States may apply a reduced VAT rate to those goods and services which are listed under Annex III of the EU VAT Directive. As clothes and shoes are not listed under this Annex the reduced rate cannot be applied to the supply of school uniforms. Therefore the only rate of VAT that can apply to the supply of school uniforms for children over 10 years of age is the standard VAT rate of 23%.
111. Deputy Peter Mathews asked the Minister for Finance if he will consider tax breaks and reliefs for landlords renting properties to third level students as an incentive and an attempt to alleviate the current renting crises for students; and if he will make a statement on the matter. [27503/15]
Amharc ar fhreagraI have no plans to introduce an incentive along the lines suggested by the Deputy. The Deputy will appreciate that tax reliefs and exemptions have costs which have to be paid for and their introduction must be considered only where there is a clear economic and social policy need to be addressed.
As the Deputy will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. He will also appreciate that I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.
112. Deputy Mattie McGrath asked the Minister for Finance if he will investigate and clarify a matter (details supplied) regarding Muintir na Tíre; and if he will make a statement on the matter. [26986/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that having regard to the provisions of Section 851A of the Taxes Consolidation Act 1997, whereby they are obliged to treat taxpayer information confidentially, they are precluded from providing the information requested by the Deputy.
Where an employee has specific concerns about the return to Revenue, by their employer, of PAYE/PRSI deductions from his or her salary, then he or she should contact their local Revenue District.
113. Deputy Dan Neville asked the Minister for Finance the position regarding a payment of local property tax in respect of persons (details supplied) in County Limerick; and if he will make a statement on the matter. [27039/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the property owner in question opted to pay his 2015 Local Property Tax (LPT) by 'deduction at source' from his occupational pension.
The person concerned is also paying the Household Charge (HHC) through deduction at source. The cumulative deduction to cover both the LPT and HHC charges amounts to €7 per week. Revenue has been in direct contact with the person concerned and confirmed the person's satisfaction with the arrangements to pay the amounts due through deduction at source.
114. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 86 of 18 June 2015, the regulatory protections in place to ensure that cost-cutting measures introduced by a bank (details supplied) do not lead to significant technological difficulties, as occurred at other banks in recent years. [27043/15]
Amharc ar fhreagraIt is the responsibility of the Central Bank of Ireland (CBI) to ensure that regulatory protections are in place to cover the risk identified in the Deputy's question. I have been informed by the CBI that under the Consumer Protection Code 2012 (CPC 2012) a regulated entity must ensure that in all its dealings with customers and within the context of its authorisation ensure that any outsourced activity complies with the requirements of this Code (General Principle 2.10 CPC 2012).
Under the Code, an "outsourced activity" is where a regulated entity employs another person (other than a natural person who is an employee of the regulated entity under a contract of service) to carry out an activity on its behalf.
The effect of this provision is that any company operating under an outsourcing arrangement from a regulated firm, must act in accordance with the rules of the Consumer Protection Code. This requirement also applies to the CCMA.
Where regulated entities are providing payment services and/or issuing electronic money the European Communities (Payment Services) Regulations 2009, S.I. 383 of 2009 (the Regulations) may apply. The Regulations provide for the authorisation and execution of payment services. Specifically, Section 30 of the Regulations relate to the outsourcing of functions.
115. Deputy Michael McGrath asked the Minister for Finance when payments will be made to first-time buyers who are eligible to apply for a refund of deposit interest retention tax paid in the previous 48 months; and if he will make a statement on the matter. [27101/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that Section 266A of the Taxes Consolidation Act 1997 provides for a refund of Deposit Interest Retention Tax (DIRT) on certain savings held by qualifying first-time buyers who purchase or self-build a property between 14 October 2014 and 31 December 2017.
A qualifying first-time buyer is a person who, at the time of the purchase, has not previously purchased or built any other dwelling, either individually or jointly with any other person.
The section provides for a repayment of DIRT paid in respect of interest earned by the first-time buyer in the 48 months prior to the purchase of a dwelling for use as his/her place of residence. The repayment is limited to DIRT relating to deposits of up to 20% of the purchase price of the home.
Revenue have developed an online system to facilitate applications for these DIRT repayments. This system has been operational since March 2015 and refunds for qualifying claims are currently being processed. To make a claim, the property must be registered for Local Property Tax. A claim form can be completed and a refund requested online once the first-time buyer logs into the Local Property Tax system on www.revenue.ie. Once all the necessary information and supporting documentation is supplied a refund can be issued to the first-time buyer's bank account. To date, 43 DIRT refunds have been issued to qualifying first-time buyers.
116. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Questions Nos. 224 to 227 of 17 February 2015, the current state of the enforcement investigation by the Central Bank of Ireland; the number of relevant customers who will be entitled to refunds; the total loss involved; when appropriate redress for those customers will be made; and if he will make a statement on the matter. [27102/15]
Amharc ar fhreagraAs it is subject to an ongoing Central Bank enforcement investigation Permanent TSB ("PTSB") is not in a position at the present time to provide any further detail than that provided on 17 February 2015. PTSB has made clear to my officials that it will do everything in its power to expedite this matter and ensure that all affected customers are identified and receive appropriate redress.
117. Deputy Derek Nolan asked the Minister for Finance the steps Ireland has undertaken, and will undertake, to combat transfer pricing as a measure of tax avoidance; his evaluation on the effectiveness of any such measures; his views that the Revenue Commissioners have sufficient powers in this regard; and if he will make a statement on the matter. [27110/15]
Amharc ar fhreagraThe term 'transfer pricing' describes the process by which members of a group of companies set the prices at which they pass goods, services, finance and assets between each other. There has been a substantial worldwide increase in trade in recent decades, much of which now takes place within multinational groups. Transfer pricing is a normal and necessary feature of transactions within large groups of companies.
Ireland introduced transfer pricing legislation in the Finance Act 2010. The legislation provides the statutory basis to challenge an understatement of profits for tax purposes as a result of abusive transfer pricing 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. Ireland's transfer pricing legislation is to be interpreted in accordance with the internationally recognised OECD Transfer Pricing Guidelines.
I am informed by the Revenue Commissioners that they have adopted a phased approach to the implementation of this legislation. The initial phase focused on requesting companies to undertake comprehensive Transfer Pricing Compliance Reviews. In 2015, Revenue has commenced risk-based audits specifically examining companies' transfer pricing arrangements. While the implementation of this legislation is still in a relatively early stage and Revenue will monitor whether any changes to the legislation may be necessary to address issues that may be identified, there is no concern that Revenue has insufficient powers.
At an international level, Revenue is closely involved in the G20/OECD BEPS Action Plan project. In particular, the outcomes of actions 8, 9, 10 are likely to result in significant changes to the OECD Transfer Pricing Guidelines. Actions 8, 9 and 10 seek to better align profits with the activities that create value with the objective of ensuring that profits are taxed in the jurisdiction in which they arise. Revenue also actively participates in the EU Joint Transfer Pricing Forum ("JTPF"), which assists the European Commission on transfer pricing tax matters. One of the issues currently being considered by the JTPF is the implementation of Country by Country Reporting (CbCR) at a European level. Ireland supports the implementation of CbCR and Revenue recognises that it will be a useful tool for transfer pricing risk assessment.
On foot of a commitment contained in the Road Map for Ireland's Tax Competitiveness which was published as part of Budget 2015, Revenue has also been allocated additional resources for its Competent Authority team dealing with transfer pricing issues. The Revenue officers concerned engage with treaty-partner country tax administrations where a company resident in that treaty-partner country considers that excessive transfer pricing adjustments are being sought in relation to transactions involving an associated company resident in Ireland. The Competent Authority team is also responsible for the negotiation of bilateral Advance Pricing Agreements ("APAs") which are a form of cooperative compliance by companies that serve to reduce the risk of abusive transfer pricing.
118. Deputy Derek Nolan asked the Minister for Finance if he will instance the work undertaken by his Department to help develop tax and revenue systems in developing countries; and if he will make a statement on the matter. [27111/15]
Amharc ar fhreagra119. Deputy Derek Nolan asked the Minister for Finance if he is satisfied that tax treaties between Ireland and developing countries are such as to prohibit unfair tax avoidance by companies acting in those countries; if it is proposed to review such treaties; and if he will make a statement on the matter. [27112/15]
Amharc ar fhreagraI propose to take Questions Nos. 118 and 119 together.
Work relating to tax and revenue systems in developing countries falls to the Revenue Commissioners. Where the opportunity has arisen, for example in Rwanda a number of years ago, Revenue has shared its expertise in assisting tax administrations to modernise, particularly in relation to the automation of processes making use of information technology.
I am informed that Irish Aid, in collaboration with the Revenue Commissioners, is at an advanced stage of preparation of support to be provided to the Malawian Revenue Authority under the Tax Inspectors Without Borders (TIWB) Initiative. This initiative, run by the OECD Tax and Development Programme, aims at building capacity through targeted, hands-on tax audit assistance programmes where foreign tax auditors work with local tax auditors in developing countries on actual tax audit cases, directly transferring audit knowledge, techniques and skills through a 'learning-by-doing' approach.
Since 2013, a particular focus of Ireland's tax treaty negotiation work, which is principally undertaken by Revenue, has been to engage with African countries that wish to extend their treaty network. A tax treaty was negotiated with Botswana in 2013 and with Ethiopia in 2014; treaty negotiations with Ghana, which began in 2014 are nearing conclusion. In addition, Ireland's treaty with Zambia, signed in 1971, was renegotiated in 2014 and the replacement treaty was signed in March of this year.
I am satisfied that Ireland's approach to negotiations is respectful of the need for treaties to be mutually beneficial for both countries concerned in avoiding double taxation and preventing fiscal evasion. The effective operation of a treaty requires each country to be satisfied that the treaty meets its objectives. Tax treaties involve the sharing of taxing rights. Ireland considers that agreeing to specific source taxation, for example in relation to dividend, interest or royalty payments, in line with the treaty policy of those developing countries that follow the UN approach to such issues, ensures a practical and effective sharing of taxing rights.
Tax treaties are reviewed primarily on the basis of the age of the existing treaty. Where a country has sought to re-negotiate an old treaty, Revenue has agreed to the request regardless of the stage of development of the country concerned. Renegotiated treaties with two developing countries were signed in 2015. A replacement treaty with Zambia was signed in March 2015 and a replacement treaty with Pakistan was signed in April 2015. The original treaties date from 1971 and 1973 respectively. The renegotiations of these treaties, and indeed all renegotiations, are informed by the same principles of mutual benefit, and satisfaction with the treaty, based on effective sharing of taxing rights, that govern the approach to new treaties.
On a broader, multilateral, front, Ireland's support for Country by Country Reporting by multinational companies should result in the provision of this information to tax authorities in developing countries from 2017, which will be very useful in risk assessment in relation to multinationals' activity in those countries.
120. Deputy Derek Nolan asked the Minister for Finance the level of engagement on the exchange of tax information between the Revenue Commissioners and foreign tax authorities; the improvements that have occurred; and if he will make a statement on the matter. [27113/15]
Amharc ar fhreagra121. Deputy Derek Nolan asked the Minister for Finance his views on the introduction of full country-by-country reporting by multinational corporations; if Ireland is advocating in favour of such a provisions at the international level; and if he will make a statement on the matter. [27114/15]
Amharc ar fhreagraI propose to take Questions Nos. 120 and 121 together.
Revenue is fully and actively engaged in the exchange of information between Revenue and the tax authorities of jurisdictions with whom we have a legal basis for the exchange of information. In 2014, Revenue received 515 requests for exchange of information in respect of direct taxes and VAT from other jurisdictions and made 295 requests to other jurisdictions.
Ireland's level of engagement in exchange of information on request is extending in scope by reference to the increasing coverage of our Tax Treaty and Tax Information Exchange Agreement network and also by our ratification in 2014 of the Council of Europe/OECD Multilateral Convention on Mutual Assistance in addition to exchange of information under the EU Directive on Administrative Cooperation.
This cooperation is set to greatly expand through the automatic exchange of financial account information under Ireland's intergovernmental agreement with the United States in relation to the US FATCA legislation and the related OECD and EU developments providing for Common Reporting Systems (CRS) for such information. In relation to CRS reporting, I have committed Ireland to being one of the "early adopter" countries that will commence the automatic exchange of financial account information in September 2017.
Ireland has also been supportive of Country by Country Reporting and my Department has signalled that support in my Department's 2013 International Tax Strategy document. More recently, we have taken an active role in the development of an internationally coordinated approach to CbCR as part of our commitment to the OECD/G20 BEPS project. In supporting the agreed approach that has been set out in detail on foot of the BEPS project work, we are conscious that successful implementation will require the coordinated participation of a wide range of countries.
The proposed rules on CbCR will require multinational corporations (MNC's), with consolidated annual group revenue of €750 million or more, to file the CbC report annually in the country in which the parent entity of the MNC is resident. The information required is the amount of revenue, profit before tax, tax paid and accrued for each tax jurisdiction in which the MNC does business. It also requires MNC's to report their total employment, capital, retained earnings and tangible assets in each tax jurisdiction. Finally, it requires MNC's to identify each entity within the group doing business in a particular tax jurisdiction and to provide an indication of the business activities each entity engages in.
122. Deputy Derek Nolan asked the Minister for Finance if he will provide, in tabular form, the amount of corporation tax collected in each of the past ten years; the percentage size it represents of the entire tax-take; if he will provide an indication of the concentration of corporate tax payment in larger payers; the percentage paid by non-Irish companies; and if he will make a statement on the matter. [27115/15]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the amount of Corporation Tax collected in each of the past ten years, the percentage it represents of the entire tax take and the estimated share of Corporation Tax liabilities from foreign owned multinational companies is set out in the following table.
|
Year |
Corporation Tax Receipts (€ million) |
Corporation Tax as % of Total Tax Receipts |
% of Corporation Tax Liabilities from Foreign Multinationals |
|
2005 |
5,503.2 |
13.9 |
N/A |
|
2006 |
6,684.6 |
14.7 |
N/A |
|
2007 |
6,393.4 |
13.5 |
N/A |
|
2008 |
5,071.5 |
12.3 |
N/A |
|
2009 |
3,889.5 |
11.7 |
N/A |
|
2010 |
3,943.6 |
12.4 |
51 |
|
2011 |
3,500.4 |
10.2 |
63 |
|
2012 |
4,215.0 |
11.5 |
76 |
|
2013 |
4,270.0 |
11.3 |
69 |
|
2014 |
4,617.0 |
11.2 |
N/A |
I am advised that the estimate for the share of Corporation Tax from foreign multinationals is based on a relatively recent review by Revenue and, for this reason, figures are not available prior to 2010. The estimate for 2014 will be available at a later date. There is a degree of estimation involved and these figures should therefore be considered provisional and subject to change.
In relation to the concentration of payments, aside from those of foreign owned multinationals shown above, the Deputy may be interested to note the comprehensive analysis on this subject published as part of the Budget 2015 documentation - www.budget.gov.ie/Budgets/2015/Documents/Corporation Tax Context Concentration Corporation Tax Payments Revenue.pdf.
123. Deputy Derek Nolan asked the Minister for Finance the tax regime applicable to corporate patent royalty income; his evaluation of its effectiveness; and if he will make a statement on the matter. [27116/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that there is currently no specific tax regime applicable to corporate patent royalty income. Patent royalty income received by a company in the course of carrying on a trade is chargeable to corporation tax at 12.5% (and at 25% if it is received in a non-trading context).
However, in Budget 2015, I introduced a new Road Map for Ireland's Tax Competitiveness which set out a comprehensive package of measures designed to reposition Ireland to reap the benefits of sustainable foreign direct investment in a changing international tax landscape.
One of the measures announced in the Road Map was a new Knowledge Development Box ('KDB'), which will provide a reduced effective rate of charge on patent royalty income to the extent that it has been created by research and development carried out in Ireland.
I view the Knowledge Development Box as a positive measure for Ireland. It is recognised internationally that investment and growth in OECD economies is increasingly driven by knowledge-based investment, which is related to research and development and intellectual property. Putting in place an attractive tax offering for developing and commercially exploiting intellectual property is therefore important to encourage companies to develop their knowledge-based capital in Ireland, and for our continued success in attracting foreign direct investment into Ireland.
A public consultation to gather views on how the KDB should operate was launched on 14th January and closed on the 8th April. The consultation paper invited submissions from interested parties on their views of how the KDB should be designed to ensure that it meets the key objective of being the most competitive in class, within the agreed international parameters for fair tax competition in this area. This consultation went well with active engagement from stakeholders my officials met with a number of parties throughout this time and nearly 40 written submissions were received.
At the same time, Irish officials have continued to engage with the OECD on the internationally agreed parameters that will confirm what acceptable tax competition for this area, and what may be viewed as an acceptable KDB regime. These discussions have been on-going at the OECD Forum on Harmful Tax Practices and a consensus on the topic is expected very shortly.
All of the above will feed into the overall design of the KDB which is being finalised over this summer and will be legislated for in Finance Bill 2015.
124. Deputy Colm Keaveney asked the Minister for Finance if he considers capital controls within a monetary union to be consistent with an optimal currency zone, or even with a monetary union, that may not satisfy the conditions of an optimal currency zone; and if he will make a statement on the matter. [27131/15]
Amharc ar fhreagraThe free movement of capital is one of the key principles of the European Union.
Having said that, the European Commission has noted that capital controls may be introduced for overriding reasons of general public interest. It notes that 'such exceptions to the principle of the free movement of capital must be interpreted very strictly, and be non-discriminatory, as well as suitable and proportionate in light of the objective. This also means that capital controls must be applied for the shortest possible period'.
On 28 June, the Greek authorities announced their intention to declare a bank holiday until July 7 at the earliest and decided to impose temporary restrictions on capital flows. The Commission assessed that this measure is appropriate in view of the present unique and exceptional situation faced by the Greek financial sector.
The European Commission also confirmed that the introduction of capital controls by the Greek authorities is justified under the Treaty on the Functioning of the European Union, in light of the current circumstances in Greece and with the view to maintain financial stability.
125. Deputy Catherine Murphy asked the Minister for Finance the present regulations which define a person's habitual residency for the liability of tax in this State; if his Department has placed an estimate on the number of Irish citizens who conduct much of their business activities in this State, yet are domiciled abroad under the current regulations; if so, if he will share this figure for each of the past 15 years to date in 2015; and if he will make a statement on the matter. [27157/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the tax position of an individual depends on their residence, ordinary residence and domicile and on the source of income.
The rules regarding residence and ordinary residence are detailed in sections 819 and 820 of the Taxes Consolidation Act (TCA) 1997. The concept of domicile is based on case law and is not prescribed in legislation.
An individual who is resident and domiciled in Ireland is taxable on their worldwide income and gains. An individual who is resident but not domiciled in Ireland is only taxable on their Irish source income and any foreign income which they remit into the State. The domicile levy, provided for in part 18C TCA 1997, is charged on an Irish domiciled individual whose world-wide income in a relevant tax year exceeds €1m, whose Irish property is greater in value than €5m and whose liability to Irish income tax in a relevant tax year is less than €200,000.
Residence
Section 819 TCA 1997 provides that an individual is resident for tax purposes if he or she spends
- 183 days or more in the State in a tax year; or
- 280 days or more in the State between the current tax year and the previous tax year, with a minimum of 30 days in each year.
A day for residence purposes is one on which an individual is in the State at any time during a day.
Ordinary residence
Section 820 TCA 1997 deals with ordinary residence. Ordinary residence relates to residence that has a degree of continuity. For instance, an individual could be non resident for a year but would remain ordinarily resident if the absence from the State was of a temporary nature. Ordinary residence arises as a result of an individual being resident in the State for three consecutive years of residence. Ordinary residence ceases after three consecutive years of non-residence.
Domicile
Domicile is a concept of general law. Domicile is acquired on birth and generally linked to the domicile of the father and not the place of birth. An individual can only have one country of domicile. It is difficult to change domicile. If an individual seeks to change domicile, he or she must prove that he or she now resides in a different country with the intention of remaining there permanently.
Revenue gathers statistics, from tax returns, on citizens who are resident but not ordinarily resident, individuals who are resident but not domiciled, and individuals who are non-resident. It is important to note that the circumstances of individuals who are non-resident for tax purposes but who file tax returns can vary widely. They include, for example,
- Irish nationals who have moved abroad for work reasons but who retain their home here (their tax return is generally only in respect of rental income on their Irish home);
- foreign nationals who never resided here but who have investments (including property) here;
- foreign nationals who worked here for a period and who may have acquired Irish tax residence for that period (for example, individuals who worked here on a temporary assignment) may retain an Irish tax liability, after ceasing to be resident, in respect of investments made in Ireland during their period of residence.
The following information in relation to the numbers of individuals falling into each category in the years 2010 to 2013 might be helpful to the Deputy. More extensive historical information is not readily available and could not be obtained without conducting a protracted examination of Revenue records.
|
|
2010 |
2011 |
2012 |
2013* |
|
Resident citizen but not ordinarily resident |
1,127 |
685 |
651 |
693 |
|
Resident but not domiciled |
4,015 |
4,093 |
4,310 |
4,757 |
|
Non- resident |
9,759 |
12,555 |
14,999 |
17,409 |
* figures are provisional
126. Deputy Terence Flanagan asked the Minister for Finance if tax relief on maintenance payments will be introduced (details supplied); and if he will make a statement on the matter. [27160/15]
Amharc ar fhreagraI assume that the Deputy's question is in relation to tax relief for maintenance payments in respect of children. There is no provision in the tax code for tax relief in this regard. This is the case regardless of whether the payments are made voluntarily or under a legally binding maintenance arrangement.
Maintenance payments in respect of children are not taxable in the hands of the children or the receiving spouse. The effect of this is that the payments are treated in the same way as if the taxpayer was providing for the child out of his or her after-tax income. This is in line with the tax treatment of all other parents, where the cost of maintaining their children is not tax deductible.
As regards maintenance payments in respect of a spouse, the position is generally that the spouse who makes payments under a legally enforceable maintenance agreement is entitled to claim a tax deduction in respect of the payments. The maintenance payments are then taxable in the hands of the receiving spouse and the couple are treated for tax purposes as if unmarried.
127. Deputy Dan Neville asked the Minister for Finance further to Parliamentary Question No. 264 of 24 March 2015, if he will review the application for assistance under the disabled drivers and disabled passengers (tax concessions scheme) in respect of a person (details supplied) in County Limerick; if an official from his Department will make personal contact with the person to explain the situation; and if he will make a statement on the matter. [27162/15]
Amharc ar fhreagraAs the Deputy is aware, the Revenue Commissioners operate the Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme. Section 101 of the Ministers and Secretaries (Amendment) Act 2011 provides that the Revenue Commissioners shall be independent in the performance of their functions under, or for the purposes of, inter alia, any statute relating to the duties of excise or the management of those duties. Accordingly, it is not appropriate for the Minister for Finance to review individual applications.
I should inform the Deputy that a technical examination of Disabled Drivers and Disabled Passengers (Tax Concession) Scheme Regulations is at an advanced stage. I expect to be in a position to address certain limitations of the scheme, including those outlined by the Deputy, in legislation very shortly. An official from my Department has made contact with the person concerned to explain the situation.
128. Deputy Tom Fleming asked the Minister for Finance if he will restore the 100% relief to interest paid on loans on buy-to-let properties, as in any other business interest paid on loans is fully allowed as a business expense; and if he will make a statement on the matter. [27193/15]
Amharc ar fhreagraThis question relates to the interest restriction applying to residential lettings, whereby the deductibility of interest in computing taxable rental income from residential property (insofar as it would otherwise be allowable) is limited to 75% of such interest. The restriction was introduced in the April 2009 supplementary budget in respect of all residential lettings as part of an urgent revenue-raising package aimed at stabilising the public finances.
I am informed by the Revenue Commissioners that for the year 2013, the latest year for which relevant information is available, and making certain assumptions about the data available to Revenue, it is estimated that the cost from increasing the level at which individuals can claim interest repayments against tax for residential rental properties from 75% to 100% could be in the order of €80 million. This is based on the assumption that tax relief was allowed at the top income tax rate of 41% and the figures provided could be regarded as the maximum Exchequer cost.
As with all proposals to change reliefs relating to property, there are a number of considerations which must be taken into account to correctly target the measure and ensure this success. As the Deputy will know, all tax reliefs and incentives are subject to regular review as part of the annual Budget and Finance Bill planning process. Any decisions taken by the Government in this regard are usually announced on Budget Day.
129. Deputy Clare Daly asked the Minister for Finance further to Parliamentary Question No. 115 of 23 June 2015, if he will make provision for the recovery of the 2.53% stamp duty pension levy to members of the Irish airlines (general employees) superannuation scheme through the taxation system (details supplied). [27194/15]
Amharc ar fhreagraIt is not clear from the details supplied with the question what, in fact, the Deputy has in mind in her proposal for recovery of the pension levy to members of the pension scheme in question through the taxation system. It seems from the details provided that the Deputy is of the view that a reduction applied to a pension in payment from a pension scheme, on foot of a decision by the trustees of the scheme to pass on the impact of the pension fund levy, is ignored in determining the pensioner s taxable pension income.
My understanding is that any reduction to the pension in payment of an individual, in these circumstances, is applied to the gross pension before tax or USC so that, in effect, it is only the amount of the gross pension after the application of any reduction, on foot of the passing on of the levy, that would be liable for tax. It is not clear, therefore, how the proposed tax exemption proposed by the Deputy would work in those circumstances.
In my response to the Deputy's question of 23 June last on this general issue, I gave a very detailed and reasoned outline of my position in this matter. For the reasons set out in that reply I have no plans to repay the pension fund levy or other levies. I also made the point that taxpayers to whom the impact of the levy may have been passed on by the chargeable persons responsible for the payment of the levy (the pension scheme trustees etc) will benefit from the changes which I began in Budget 2015 and which will continue in future Budgets to reduce the tax burden on those on low and middle incomes.
130. Deputy Clare Daly asked the Minister for Finance his views regarding whether Ireland has gold reserves; if so, the location of same; and if he will make a statement on the matter. [27195/15]
Amharc ar fhreagraThe Central Bank publishes the value of its gold and gold receivables in its annual report. The Central Bank Annual Report 2014 states the value of gold and gold receivables to be €190,979,000 as at 31 December 2014. The Annual Report also notes that gold and gold receivables consist of coin stocks held in the Central Bank of Ireland; gold bars are held on behalf of the Central Bank of Ireland at the Bank of England.
The operation and maintenance of any secure vaults is a matter for the Central Bank of Ireland. For security reasons the Central Bank of Ireland does not provide any details regarding the content or location of vaults.
131. Deputy Tom Fleming asked the Minister for Finance if he will ensure that the 9% Value Added Tax rate is retained on tourism products in the upcoming budget, as this has been vital for the tourism sector; and if he will make a statement on the matter. [27196/15]
Amharc ar fhreagraThe 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. It is not the practice to comment on what measures may or may not be introduced in advance of the Budget.
132. Deputy Eoghan Murphy asked the Minister for Finance if he will consider allowing tax relief on graduate medical students' loans. [27210/15]
Amharc ar fhreagraThe graduate entry programme provides undergraduate medical education of four years duration and has been developed to produce medical graduates with the ability to successfully undertake an internship and thereafter to gain full registration with the Medical Council. The programme is supported by a combination of student fees, State funding and other income.
While in this case the fees could be considered high, in the majority of cases where third level tuition fees are payable they are at much lower levels. In addition, those participating in the programme must already have acquired an undergraduate degree, the fees for which would have been covered by the State in the vast majority of cases.
I would point out that tax relief at the standard rate of 20% is available in respect of qualifying fees paid by an individual for a third level education course, including a postgraduate course.
Qualifying fees mean tuition fees in respect of an approved course at an approved college and includes what is referred to as the "student contribution". No other fees e.g. administration fees, examination fees, capitation fees, qualify for tax relief. Tuition fees that are, or will be, met directly or indirectly by grant, scholarship, employer contribution or other means are deducted in arriving at the net qualifying fees. A claim for relief may be made in respect of a number of students.
In making a claim for relief for the tax year 2015, the maximum amount of fees that can qualify for the relief is €7,000 per student, but an amount set out in the legislation must be disregarded from each claim (whether in respect of one or more students). Where a claim for relief includes fees paid on behalf of at least one full-time student, the disregard is €2,750. Where a claim for relief includes fees solely paid on behalf of a part-time student or part-time students, the amount disregarded is €1,375. Thus, for example, an individual undertaking a graduate entry medical course on a full-time basis, where tuition fees of €15,000 per student apply, would attract relief of €850 made up as follows:
|
Tuition fees |
€15,000 |
|
Capped at |
€7,000 |
|
Less |
€2,750 |
|
€4,250 @ 20% = €850 |
I have no plans to introduce tax relief for loans taken out to pursue the graduate entry medical programme as tax relief is already provided for the tuition fees. In addition, the introduction of such a relief would inevitably lead to calls for all other student loans to be similarly tax relieved.
