Written Answers Nos. 173-189
173. Deputy David Cullinane asked the Minister for Finance if his attention has been drawn to reports that Brazil recently added Ireland to its list of tax havens; the implications for Ireland in terms of financial transactions with Brazil if this is indeed the case; if there are any reputational implications for Ireland in view of any such decision by the Brazilian authorities; and if he will make a statement on the matter. [26751/16]
Amharc ar fhreagraI was surprised and disappointed to learn that the Brazilian Federal Revenue Service have added Ireland to Brazil's tax black list. I understand that the operation of the listing was initial backdated to 1 August but now has been suspended until 1 October. If Ireland remains on the list, I understand that there would be some Brazilian tax implications on payments flowing from Brazil to Ireland.
We have not been provided with detailed reasons from the Brazilian Federal Revenue Service as to why Ireland was added to the list. Our Ambassador in Brazil is engaging with the Brazilian Revenue Service to seek Ireland's permanent removal from this list as soon as possible.
Ireland strongly rejects any allegations that we are a tax haven. Ireland does not meet any of the international standards for being considered a tax haven. Ireland is fully compliant with all international best practices in the areas of tax transparency and exchange of information. Ireland's corporate tax policies are designed to attract real and substantive operations to Ireland. Ireland has not been and will never will be a brass-plate location. We only have and want real substantive FDI, the kind that brings real jobs and investment into Ireland.
Ireland is an active participant in global work to reform the international corporate tax system. We have implemented Country by Country Reporting, agreed the Anti-Tax Avoidance Directive and are working towards the implementation of the remaining OECD BEPS recommendations both domestically and internationally.
174. Deputy Micheál Martin asked the Minister for Finance the total amount of tax collected on the sale of bottled water on an annual basis in the period 2012 to 2016, including excise taxes and VAT on sales; his views on the trends in recent years; and if he will make a statement on the matter. [26765/16]
Amharc ar fhreagra177. Deputy Micheál Martin asked the Minister for Finance the status of the 23% VAT rate on bottled water; and if he will make a statement on the matter. [26799/16]
Amharc ar fhreagraI propose to take Questions Nos. 174 and 177 together.
Bottled water is subject to the standard VAT rate which is currently 23%. The standard rate is the VAT rate applied to bottled water in the majority of EU Member States. Prior to 1992 bottled waters and fruit juices had applied at the zero rate, but were made subject to the standard rate from 1 November 1992 in order to correct a competitive anomaly, as similar competing products such as soft drinks were standard rated. The change in the VAT treatment coincided with the removal of excise duty from bottled water.
Where a product was zero rated prior to 1 January 1991 but subsequently standard rated, it is not possible to reintroduce the zero rate for that product. However, under Annex III of the EU VAT Directive, Member States are permitted to apply a reduced rate of not less than 5% to bottled water. It would therefore be possible to apply our reduced rate of 9% or 13.5% to these drinks. However, a reduction in the rate of VAT on such a product would be costly to the Exchequer and I have no plans to reduce the rate of VAT on bottled water.
I am informed by Revenue that the information provided on tax returns does not require the yield from specific products or activities to be identified. It is therefore not possible to provide separate figures on the amount of tax collected from the sale of bottled water. Excise taxes are not charged on bottled water.
175. Deputy Brendan Griffin asked the Minister for Finance if a company (details supplied) has met all legal and regulatory requirements to operate here; if this has been checked and verified; and if he will make a statement on the matter. [26778/16]
Amharc ar fhreagraFirstly, I would highlight that a list of all firms regulated by the Central Bank is available on their website: http://registers.centralbank.ie/.
I have been informed by the Central Bank that the company in question is regulated by the Central Bank as an Insurance/Reinsurance Intermediary and as a Retail Credit Firm under Section 34E of the Central Bank Act 1997. Retail credit firms must comply with all Central Bank codes and Code of Conduct on Mortgage Arrears requirements. As part of a Retail Credit Firm authorisation, a firm can provide credit servicing on behalf of loan owners.
The provision contained in Section 34E of the Central Bank Act 1997 was introduced as part of the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 which was enacted in July of last year. This Act ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes, such as the Consumer Protection Code, the Code of Conduct on Mortgage Arrears and the Code of Conduct for Business Lending to Small and Medium Enterprises.
The Central Bank is now the competent authority for the authorisation and supervision of credit servicing firms. Credit servicing firms must comply with all relevant requirements of financial services legislation, including the various codes mentioned already and Fitness and Probity Standards (including minimum competency requirements).
It is an offence to engage in any activity that requires Central Bank authorisation without being registered with the Central Bank.
176. Deputy Brendan Griffin asked the Minister for Finance if an annual profit limit exists for Irish banks or foreign banks operating here; and if he will make a statement on the matter. [26779/16]
Amharc ar fhreagraI can confirm that there are no limitations regarding annual profits for Irish banks or for foreign banks operating in Ireland.
178. Deputy Marc MacSharry asked the Minister for Finance if NAMA consulted or liaised with his Department or him on reports (details supplied); the nature of any contact on these draft reports; if he will publish details of any and all interactions relating to these reports; and if he will make a statement on the matter. [26812/16]
Amharc ar fhreagraMy officials meet with NAMA executives on a monthly basis to discuss NAMA's current and expected performance, as well as any other topical issues, while respecting NAMA's independence. Through these engagements, my Department was aware that NAMA had received drafts of, and provided feedback on, the Comptroller and Auditor General's (C&AG) Special Report "National Asset Management Agency's sale of Project Eagle". My officials would have been generally aware of NAMA's reservations regarding the report as they developed during the process between the C&AG and NAMA.
Officials from the Office of the C&AG also met officials from my Department at an early to stage of the review process in November 2015.
Following a number of months of engagement between the C&AG and NAMA, and as the Deputy will be aware from the C&AG's report, Department of Finance officials were consulted, provided feedback, and engaged with the C&AG on the final two drafts of the report from late May 2016.
179. Deputy Michael McGrath asked the Minister for Finance the correspondence his Department has had with its Brazilian counterparts in view of the Brazilian authorities decision to designate Ireland as a tax haven; and if he will make a statement on the matter. [26852/16]
Amharc ar fhreagraI was surprised and disappointed to learn that the Brazilian Federal Revenue Service have added Ireland to Brazil's tax black list. I understand that the operation of the listing was initially backdated to 1 August but has now been suspended until 1 October. No notice of this decision was given to the Irish Government by the Brazilian Federal Revenue Service and we have not received a detailed explanation as to why Ireland has been included on the list.
There has been no direct correspondence between my Department and the Brazilian Federal Revenue Service on this matter. The Irish Ambassador to Brazil is leading our engagement with the Brazilian Federal Revenue Service to seek Ireland's permanent removal from this list as soon as possible. My officials are in close contact with the Ambassador and supporting these efforts.
Ireland strongly rejects any allegations that we are a tax haven. Ireland does not meet any of the international standards for being considered a tax haven. Ireland is fully compliant with all international best practices in the areas of tax transparency and exchange of information. Ireland's corporate tax policies are designed to attract real and substantive operations to Ireland. Ireland has not been and will never will be a brass-plate location. We only have and want real substantive FDI, the kind that brings real jobs and investment into Ireland.
Ireland is an active participant in global work to reform the international corporate tax system. We have implemented Country by Country Reporting, agreed the Anti-Tax Avoidance Directive and are working towards the implementation of the remaining OECD BEPS recommendations both domestically and internationally.
180. Deputy Robert Troy asked the Minister for Finance the total travel expenses and reimbursement costs incurred by his Department per annum from 2011 to 2016 in tabular form; and if he will make a statement on the matter. [26860/16]
Amharc ar fhreagraThe information requested by the Deputy is set out in the following table:
|
Year |
2011 |
2012 |
2013 |
2014 |
2015 |
2016(to date) |
|
Amount (€) |
311,526.50 |
492,579.60 |
1,014,115.25 |
619,752.40 |
557,775.90 |
365,319.22 |
181. Deputy Frank O'Rourke asked the Minister for Finance if his Department has a specific data protection officer in place; if that position is exclusive or if the position holder has other duties; and if he will make a statement on the matter. [26877/16]
Amharc ar fhreagraThe Department of Finance has a specific Data Protection Officer. The role of the Department of Finance Compliance Officer incorporates the position of Data Protection Officer. While the Data Protection Officer has other duties and responsibilities they do not interfere with his role as Data Protection Officer.
The Data Protection Officer is independent in his role and reports to the Department's Executive Board concerning data protection issues. The role entails promoting the implementation of data protection rules, including the drafting of relevant internal policy and procedure documents, and the provision of assistance and guidance to staff regarding the protection of personal data.
182. Deputy Pearse Doherty asked the Minister for Finance if, regarding his proposed amendment to section 110 of the Taxes Consolidation Acts, he will restrict the use of profit participating loans where they are used to finance business of section 110 companies related to Irish property transactions; if his attention has been drawn to the fact that this amendment will allow for a situation whereby all portfolios affected can be marked to market at 5 September 2016 and accordingly any unrealised gains of the section 110 company arising on specified property business up to 6 September 2016 will be unaffected by the amendment, leading to a massive loss in capital gains tax to the Exchequer given that the majority of uplift in value of the properties and loan books affected have already taken place; and if he will make a statement on the matter. [26889/16]
Amharc ar fhreagra183. Deputy Pearse Doherty asked the Minister for Finance if, regarding his proposed amendment to section 110 of the Taxes Consolidation Acts, his attention has been drawn to reports that Irish accountancy firms have been notifying clients affected by this amendment that their corporate finance departments can prepare reports uplifting the valuation of affected portfolios sufficiently to ensure that no other capital gains will accrue post 5 September 2016; the appropriate action that will be taken to ensure that such a scenario will not be facilitated; and if he will make a statement on the matter. [26890/16]
Amharc ar fhreagra184. Deputy Pearse Doherty asked the Minister for Finance if, regarding his proposed amendment to section 110 of the Taxes Consolidation Acts, as published, the amendment still allows interest deductibility at an arm's length rate on all loans related to Irish property transactions; his views on the fact that this could facilitate scenarios whereby the affected portfolio can be restructured to create internal high-interest loans, for example, 15%, so long as the affected portfolio can have a report produced by an accountancy firm which shows that this is justified and reflects the market realities of this type on transaction or, alternatively, may be facilitated through an orphaned financing structure, resulting in the neutralising of much of the profit on income from the affected portfolio; if this is the case, the measures which will be taken to ensure that such a situation cannot occur; and if he will make a statement on the matter. [26891/16]
Amharc ar fhreagra185. Deputy Pearse Doherty asked the Minister for Finance if, regarding his proposed amendment to section 110 of the Taxes Consolidation Acts, his attention has been drawn to reports that Irish accountancy firms have been notifying clients affected by this amendment that they should wrap their current section 110 structure inside an orphaned super QIAIFs in order to prevent the media and the public from downloading their accounts and seeing which Irish taxes they are or are not paying, considering that all Irish companies, including section 110s, must publish their accounts on the CRO website, whereas QIAIFs do not file public accounts; and if he will make a statement on the matter. [26892/16]
Amharc ar fhreagraI propose to take Questions Nos. 182 to 185, inclusive, together.
The proposed amendment to Section 110 of the Taxes Consolidation Act, published on 6 September, is the subject of ongoing review and discussion. It is intended to address some perceived issues with the operation of section 110. The amendment as published is not finalised and may be subject to further refinements to clarify certain aspects of the provision.
The proposed amendment relates to the corporation tax that a section 110 company must pay, and not to any potential capital gains tax (CGT) liability. This is an important distinction: corporation tax applies to profits arising during an accounting period whereas CGT is triggered by a disposal during a period. A change in the CGT rate applies to any accrued gain crystallised by a disposal of the asset after the change in the rate. However, it is incorrect to apply this logic to corporation tax because of the difference in the events which trigger the tax.
With regard to any attempts by accountancy firms or otherwise to circumvent the intention of the proposed amendment it should be noted that this is a proposed amendment. The rationale for publishing said proposal was to ensure appropriate feedback is received on a technical and complex section of the Taxes Acts. My officials are currently in consultation with a broad range of stakeholders to clarify certain aspects of the provision and to ensure the proposal successfully carries out the intention for which it was created. This is an ongoing process and I would like to reiterate that we welcome input from all stakeholders, including Deputies, on the matter.
Regarding interest deductibility, it is a long standing part of tax law that a person is subject to income or corporation tax not on their gross income, but on their profits, having taken a deduction for the expenses wholly and exclusively incurred in earning those profits. Where the interest expense of a section 110 company is calculated on an arm's length basis, and where it passes the wholly and exclusively test, then it would not be in keeping with the balance of the Irish tax system to restrict the deductibility of that interest.
In relation to section 110 companies being owned by QIAIFs, this would not change the Company Registration Office (CRO) obligations re the filing of returns. If a section 110 company has a shareholder who is an AIF, they are still obliged to file their accounts and these accounts will be publicly available via the CRO website.
186. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount of money which will be paid in interest and in repayment of the principal on the national debt in each of the years 2016 to 2020. [26899/16]
Amharc ar fhreagraThe NTMA has outlined the current forecasts for principal and interest payments in respect of the National Debt over the coming period. The data requested by the Deputy is reflected in the following table.
The "repayment of the principal" figures reflect Government bonds and EU/IMF Programme loan facilities only.
The forecast interest expenditure figures relate to the General Government Debt and are from the time of the Summer Economic Statement in June. Forecasts for General Government debt and interest will be updated in Budget 2017, to be published 11th October.
|
Year |
Principal Repayments1 €bn |
General Government Interest €bn2 |
|
2016 |
8.13 |
6.3 |
|
2017 |
6.4 |
6.2 |
|
2018 |
9.24 |
6.1 |
|
2019 |
16.2 |
6.0 |
|
2020 |
21.8 |
6.0 |
|
Year |
€bn Principal Repayments1 |
General Government Interest €bn2 |
|
2016 |
8.13 |
6.3 |
|
2017 |
6.4 |
6.2 |
|
2018 |
9.24 |
6.1 |
|
2019 |
16.2 |
6.0 |
|
2020 |
21.8 |
6.0 |
Notes:
1. Reflects Government Bond and EU/IMF Programme Maturities as at end-August 2016. Figures include the effect of currency hedging transactions.
2. From time of Summer Economic Statement, June 2016.
3. Includes the end-February 2016 €0.85 billion purchase and cancellation of the 4.6% Treasury Bond 2016 which matured in April 2016. The principal redemption amount on the date of maturity was €7.28 billion. No other bond purchases included.
4. Excludes €3.9 billion of EFSM maturities as these are due to be extended following the maturity extensions granted in mid-2013.
187. Deputy Ruth Coppinger asked the Minister for Finance the amount it would cost the State to abolish the universal social charge for all incomes under €100,000 and maintain it as it is for those over €100,000. [26900/16]
Amharc ar fhreagra188. Deputy Ruth Coppinger asked the Minister for Finance the net effect for the State of the abolition of the universal social charge for all income under €100,000; the maintenance of it as is for those between €100,000 and €150,000; introducing two new bands of USC of 10% for income between €150,001 and €200,000; and a 12% rate for all income over €200,000. [26901/16]
Amharc ar fhreagraI propose to take Questions Nos. 187 and 188 together.
I am advised by Revenue that the estimated first and full year cost to the Exchequer resulting from the abolition of the Universal Social Charge (USC) for all taxpayers with income under €100,000, and the maintenance of all the existing USC rates and bands for taxpayers with income of €100,000 or over, is in the order of €2,200 million and €2,553 million respectively.
As regards the abolition of the USC for all taxpayers with income under €100,000, the maintenance of the existing USC rates and bands for taxpayers on incomes between €100,000 and €150,000 and the introduction of new bands and rates of 10% for income between €150,001 and €200,000 and 12% for all income over €200,000, I am advised by Revenue that the estimated first and full year cost to the Exchequer is €2,025 million and €2,313 million respectively. These costs are net of the additional yield generated by the two new USC rates and bands proposed in the Deputy's question. The estimates assume the continued application of the surcharge of 3% on individuals who have non-PAYE income that exceeds €100,000 in a year.
These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2014, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to projected 2017 incomes. They are provisional and may be revised.
189. Deputy Clare Daly asked the Minister for Finance if a company (details supplied) which will in the near future be leasing office property to his Department at a cost to the State of €9 million per year is availing of a section 110 exemption. [26912/16]
Amharc ar fhreagraI am advised by Revenue that having regard to the provisions of Section 851A of the Taxes Consolidation Act 1997, whereby Revenue is obliged to treat taxpayer information confidentially, they are precluded from providing the information requested.
