Tuesday, 17 Jan 2017

Written Answers Nos. 320-339

VAT Rate Application

Ceisteanna (320, 328)

Joan Burton

Ceist:

320. Deputy Joan Burton asked the Minister for Finance when the 23% VAT on the national car test was introduced; his plans to review it; and if he will make a statement on the matter. [1843/17]

Martin Heydon

Ceist:

328. Deputy Martin Heydon asked the Minister for Finance the reason NCT car tests are charged VAT at 23% when the test is required by law; and if he will make a statement on the matter. [1878/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 320 and 328 together.

The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the EU VAT Directive, Irish legislation has applied the standard rate of VAT, currently 23%, to the supply of the national car test service since its introduction in Ireland. The legal requirement to test vehicles does not alter the liability to VAT on the service.

Under the EU VAT Directive there is no discretion to apply a different rate to the service in question and therefore the question of a review does not arise.

Bank Liquidations

Ceisteanna (321)

Michael McGrath

Ceist:

321. Deputy Michael McGrath asked the Minister for Finance if negotiations are ongoing between persons (details supplied) and the special liquidators of a bank in relation to the control of certain properties, potential litigation against the persons by the special liquidator and litigation by the persons against the former bank; if he is being kept informed of such negotiations; the mandate which has been conveyed to those negotiating on the State's behalf; the amount of legal and recovery costs already incurred by the special liquidator on this matter; and if he will make a statement on the matter. [1844/17]

Freagraí scríofa

Minister for Finance

I am advised by the Special Liquidators that there are no ongoing settlement discussions with the party referred to in the question or any of their representatives at this time.

Generally speaking, my officials and I would be kept informed by the Special Liquidators at a high level of any such discussions between them and the party referred to in the question but the detail of such discussions between both parties would be a matter for the Special Liquidators in the context of their overriding legal obligations and neither I nor my officials would have any input into them.

In relation to the costs incurred by the Special Liquidators on this matter, I am advised by them that they are not in a position to provide the requested information due to commercial confidentiality and ongoing litigation involving the party referred to in the question.

Proposed Legislation

Ceisteanna (322)

Michael McGrath

Ceist:

322. Deputy Michael McGrath asked the Minister for Finance the steps he intends to undertake in order to fulfil his commitment to introduce a tax on sugar-sweetened drinks in April 2018; the expected full year yield from such a tax; and if he will make a statement on the matter. [1858/17]

Freagraí scríofa

Minister for Finance

The Programme for a Partnership Government commits to the introduction of a tax on sugar-sweetened drinks (SSDs). The tax will contribute towards important public health goals, as well as providing a new source of revenue for public spending. The Department of Health has also supported the introduction of a tax on SSDs in order to reduce added-sugar in diets, particularly the diets of children and young people. The proposed tax on SSDs is seen as just one measure in the Department of Health's comprehensive plan to tackle obesity in Ireland.

Sugar-sweetened drinks taxes have been introduced in a number of European countries in recent years. The UK is due to introduce a soft-drinks industry levy from April 2018. On Budget day I said that given the highly integrated production and supply chains which exist in the soft drinks industry between Ireland and the United Kingdom, it would be prudent to align the Irish sugar-sweetened drinks tax with the UK's tax proposal, in terms of time-frame and structure.

I also launched a public consultation process on Budget day to get the views of all stakeholders in order to ensure that, when introduced, the tax is as effective as possible, as fair as possible, and minimises the administrative burden on business. That public consultation period expired on 3 January 2017 and prompted 30 submissions from the health sector, the soft drinks industry and citizens. Officials from my Department and the Revenue Commissioners are currently collating and analysing the responses which will then be taken into consideration when developing the tax, including at which point in the supply chain these products will become liable for tax.

They estimated yield from the tax on SSDs will depend on the eventual design. The General Excises Tax Strategy Group (TSG) paper 2016 examines options around an SSD tax and potential estimated yields. Both the General Excises TSG paper and the Public Consultation paper are available on my Department's website.

Officials from my Department are engaged in ongoing communication with the soft drinks industry to ensure the tax, when introduced, is effective and implemented in an administratively straightforward manner. It is expected that the underpinning legislation will be introduced in this year's Finance Act.

Tax Data

Ceisteanna (323)

Michael McGrath

Ceist:

323. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the Revenue Commissioners compliance project in respect of the self-employed; the scope of the project and the number of tax cases that will be examined; the results of the pilot project; and if he will make a statement on the matter. [1859/17]

Freagraí scríofa

Minister for Finance

It is assumed that the Deputy refers to work that the Revenue Commissioners have been engaged in during the course of 2016 to use 3rd party information and data analytics to identify income-tax payers who have understated their income to Revenue.

I am advised that this work is one of a number of projects designed to deliver on a specific objective of the Commissioners' published Statement of Strategy 2017-2019, which is to use data analytics to identify sectoral and behavioural risks and detect non-compliance. To this end, Revenue has established an in-house analytics team of eight permanent staff, supported by a technical services team of an additional four permanent staff. The role of this unit is to use statistical and machine-learning methods to support Revenue's risk assessment and operational decision-making. The focus of the team's work is on detecting potentially suspect anomalies in Revenue data, and on learning from the outcomes of past Revenue interventions in order to target non-compliance more accurately in future.   

The particular project referred to falls into the former category: it aims to identify non-compliant income-tax payers by highlighting those whose declared income is unusually low compared to their peers. To identify such taxpayers, the project draws on a wide range of data sources, including third-party information returns made by financial institutions, insurance providers, government bodies, and other tax administrations.  A predictive model built by Revenue's data analysts then compares each income-tax payer's declared income against the average declared income of other taxpayers with a similar expenditure profile and demographic characteristics. Taxpayers whose declared income is substantially lower than that of their peer group are flagged for further review (and possible intervention) by Revenue staff.  I am advised that similar programmes are used by a number of other tax administrations to better target non-compliance.

In a small ongoing pilot study, Revenue is examining an initial sample of 72 taxpayers identified through the means described above. When available, the results of this pilot will be used to evaluate the effectiveness of the approach and to refine the case-selection methodology used.  Depending on the effectiveness of the resulting methodology, this approach may be used more widely in future to select cases for Revenue audit or other compliance intervention.  The pilot study may also highlight additional sources of third-party and other data that are required to optimise the effectiveness of the predictive model.

Loan Books Purchasers

Ceisteanna (324)

Michael McGrath

Ceist:

324. Deputy Michael McGrath asked the Minister for Finance the nature of the case being taken in the High Court by a bank (details supplied) against another bank in relation to the sale by the other bank of a property loan book in 2015; the implications of this case for the other bank; and if he will make a statement on the matter. [1860/17]

Freagraí scríofa

Minister for Finance

I have been informed that in 2015 the bank in question concluded a sale of a non-core loan book.  The loan book consisted of loans which were secured typically by commercial properties including some Buy-to-Let properties.  The legal action taken by the purchaser of this loan book relates to a warranty in the legal agreements for the sale and relates to a small number of assets included in the sale.  I understand that both parties are engaged in ongoing discussions on this issue with the aim of finding a mutually agreeable outcome. 

It is not expected that this matter will have any material consequence for the bank in question.

Financial Irregularities

Ceisteanna (325, 326)

Michael McGrath

Ceist:

325. Deputy Michael McGrath asked the Minister for Finance the amount of an authority's funds which are frozen here due to UN sanctions; the location the funds are held; the date from which they are frozen; the way the funds are managed; and if he will make a statement on the matter. [1861/17]

Michael McGrath

Ceist:

326. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed breakdown, by financial institution, of any funds frozen here; the source of the funds, the reason the funds have been frozen and the date from which; and if he will make a statement on the matter. [1862/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 325 and 326 together.

The EU implements restrictive measures autonomously at EU level or as a result of resolutions of the Security Council of the United Nations through the publication of EU Regulations. EU Regulations are binding on all Member States once published in the EU Official Journal and appropriate penalties for breach of the regulations are set by Member States.

The Central Bank is one of three competent authorities for the administration of EU restrictive measures in Ireland. The other Irish competent authorities are the Department of Jobs, Enterprise and Innovation and the Department of Foreign Affairs and Trade.

The EU Regulations commonly include an obligation for funds and other assets to be frozen without delay and not made available, directly or indirectly, to listed sanctioned individuals or entities. The competent authority for the administration and enforcement of financial sanctions which are concerned with curtailing the movement of payments and capital is the Central Bank.

The Central Bank has advised me that it is not in a position to provide the detail or information from regulated financial service providers in the format requested, due to the confidentiality requirements of Section 33AK of the Central Bank Act 1942 as amended. The Central Bank however has provided information in the table which relate to notifications received by the Central Bank from financial institutions in Ireland in respect of funds frozen, blocked or refused up until the end of 2016.

Regime	Currency and amount Frozen/Blocked/Refused
Al Qaida	$1,219,932
Al Qaida	PKR 53,612
Al Qaida	€1
Iran	$214,716
Iran	GBP 687,427
Iran	AUD 810
Iran	AED 6,377
Iran	€ 940
Libya	XOF 780,000
Libya	$ 1,664,292,092
Libya	EUR 1,274,909
Syria	$ 620,951
Syria	ZAR 1,626.54
Other regimes such as Liberia/Burma/Myanmar Somalia/North Korea	$ 8,246 EUR 3,809.00 PKR 297 KRW 50,000.00

NAMA Portfolio

Ceisteanna (327)

John Curran

Ceist:

327. Deputy John Curran asked the Minister for Finance if he, in conjunction with NAMA, will review the properties offered by NAMA to local authorities for social housing; the reasons given by local authorities for rejecting many of these properties; the number of these properties still available which could now be offered again to local authorities; and if he will make a statement on the matter. [1871/17]

Freagraí scríofa

Minister for Finance

NAMA continuously reviews the assets of every NAMA debtor to establish if properties securing their loans could be utilised for residential development or social housing. In fact, NAMA has an established policy of identifying to Local Authorities, properties which may be suitable for their purposes. NAMA has facilitated the sale or lease by its debtors and receivers of properties, at market value, to public bodies for a wide-range of purposes, including social housing; schools; healthcare facilities; and urban economic, environmental and cultural regeneration. This engagement has resulted in almost 2,400 units being acquired by Local Authorities from NAMA debtors through commercial sales or leases, with a further 370 units in the pipeline.

To streamline delivery under this initiative, NAMA established National Asset Residential Property Services Limited, "NARPS", to purchase suitable properties from NAMA debtors for onward leasing to local authorities or approved housing bodies on the basis of long-term, commercial arrangements. NARPS is both consistent with NAMA's commercial remit and also reduces the upfront capital required by local authorities to secure social housing units.

NAMA can only offer and facilitate the take up of units for social housing. NAMA cannot force the take-up of these properties. This is a reserved matter for Local Authorities which NAMA engages with on this initiative through the Housing Agency and Approved Housing Bodies. NAMA advise that, in the majority of cases, NAMA was not given detailed reasons as to why the properties were not required by the local authorities. However, regular liaison between the Housing Agency and NAMA during the process indicated that the main reasons for rejecting available properties was that there was no demand for social housing in some of the geographic locations where the NAMA debtors properties were located, or that the housing body and local authority felt that it would result in an over-concentration of social housing in a particular area. During an appearance before the Oireachtas Committee on Housing and Homelessness, on 12th May 2016, chaired by the Deputy, the NAMA Chairman explained that NAMA's understanding was that units were not accepted "primarily because the units were not in the locations where social housing was needed, or they were too big or too small for their requirement".

Ultimately, it is a matter for local authorities and the Housing Agency to determine the suitability of properties for social housing. Neither NAMA, nor the Department of Finance, has a role in reviewing or assessing these decisions or determining the ultimate suitability of units offered for sale or lease. Thus, I would advise the Deputy to discuss such a review with the Department of Housing, Planning, Community, and Local Government, which has responsibility for local authorities and the Housing Agency. However, I would initially refer the Deputy to data which is publically available on the Housing Agency website, via www.housingagency.ie/nama with a detailed breakdown as of December 2016 available at

www.housingagency.ie/Housing/media/Media/Social%20Leasing%20Library/NAMA%20Status%20Reports/Breakdown-by-County-January-2017.pdf.

The Deputy will note that page 7 of that report details the units "No Longer Under Consideration" by local authorities into the following categories:

- No Demand: 1,052 units: Includes units in areas local authorities indicated they had no demand for such social housing, or had no demand for the number or type of units offered. In many cases, a demand for a smaller number of properties in the same development was confirmed with the balance declined on the basis that there was insufficient demand. These units may have been in unfinished developments outside of urban centres without infrastructural or community supports.

- No Sustainable Communities: 1,279 units: Includes units in areas local authorities considered there was already a high concentration of social housing or, by adding additional properties, the concentration would be unacceptable and not consistent with local authorities' commitment to mixed tenure developments.

- Not Suitable: 92 units: Includes units that local authorities deemed were not suitable for social housing, either by virtue of the nature of the development, e.g. holiday home type developments, or the units were in areas of exceptionally high market rents or required high management service charges and therefore were not financially viable to be acquired or leased for social housing purposes.

- Not Available: 1,770 units: Includes units that were no longer available to local authorities due to having either been sold or let to the private sector prior to the local authority confirming demand.

It should be noted that all of the units above, which the local authorities deemed as "no longer under consideration" are no longer available for reconsideration by local authorities as all of these units have now either been sold or let.

I am advised that NAMA continues to liaise with the Housing Agency, when NAMA becomes aware of additional availability of units. Where demand is not confirmed, properties are marketed on the residential sales or rental markets. NAMA advise that there has been no shortage of uptake of these properties in the market. Almost all remaining properties, owned by NAMA debtors, are now either occupied, for sale, or in process of being readied for sale.

I am also advised that NAMA, in its capacity as secured lender, has exposure to just 173 vacant residential properties. These are frictional vacancies, for example relating to units between tenancies, the number of which will fluctuate over time.

As a result, the opportunities for additional units being identified for social housing are now quite limited. The focus of current efforts surrounds the 373 units for which demand has been confirmed by local authorities but have yet to be contracted or delivered, 265 of which are going through pre-appraisal by the local authorities and 108 of which have agreed terms and are awaiting delivery or are under active contract negotiations.

Question No. 328 answered with Question No. 320.

Tax Code

Ceisteanna (329)

Pearse Doherty

Ceist:

329. Deputy Pearse Doherty asked the Minister for Finance the total net amount of dividend withholding tax collected in relation to Irish dividends paid to non resident corporate or individual investors in each of the years 2004 to 2015, in tabular form; and if he will make a statement on the matter. [1926/17]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that the breakdown sought by the Deputy, of Dividend Withholding Tax (DWT) collected in relation to Irish dividends paid to non-residents, is not separately available due to the manner in which the information is recorded.

The following table may be of interest to the Deputy. This table sets out the Annual amount of DWT collected for the years 2004 to 2015.

DWT Net Receipts
Year	€M
2015	600
2014	268
2013	234
2012	252
2011	179
2010	218
2009	156
2008	350
2007	325
2006	285
2005	232
2004	225

Real Estate Investment Trusts

Ceisteanna (330, 331, 332, 333)

Pearse Doherty

Ceist:

330. Deputy Pearse Doherty asked the Minister for Finance the standard and reduced rates available for withholding tax applied to dividends paid by Irish REITs to non-resident corporate and individual shareholders from the USA, Canada, Britain, France, Germany, Austria, China, Spain, Australia and Switzerland, outlining for each the circumstances allowing for the reduced rate of dividend withholding tax, in tabular form; and if he will make a statement on the matter. [1927/17]

Pearse Doherty

Ceist:

331. Deputy Pearse Doherty asked the Minister for Finance the circumstances under which dividends are paid by an Irish REIT to a non-resident investor exempt from dividend withholding tax; and if he will make a statement on the matter. [1928/17]

Pearse Doherty

Ceist:

332. Deputy Pearse Doherty asked the Minister for Finance the circumstances under which non-resident investors in Irish REITs are able to reclaim Irish dividend withholding tax paid in respect of their Irish REIT dividends; the total amount reclaimed in 2013, 2014 and 2015, in tabular form; and if he will make a statement on the matter. [1929/17]

Pearse Doherty

Ceist:

333. Deputy Pearse Doherty asked the Minister for Finance the net total dividend withholding tax collected in respect of Irish REIT dividends paid to non-resident investors in each of the years 2013 to 2015, in tabular form; and if he will make a statement on the matter. [1930/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 330 to 333, inclusive, together.

The Finance Act 2013 inserted Part 25A into the Taxes Consolidation Act 1997 which introduced the tax regime for the operation of Real Estate Investment Trusts (REIT) in Ireland. A REIT is a collective investment vehicle designed to hold properties in a tax neutral manner. I am informed by Revenue that there are currently three REIT established and operating in Ireland.

Part 25A provides, inter alia, that a REIT must distribute to its shareholders at least 85% of property income by way of property income dividends. In the absence of the REIT tax legislation, non-resident REIT shareholders would not have had any liability whatsoever to Irish tax on REIT dividends. In order to ensure that tax from foreign REIT investors is retained in the State, the REIT tax legislation specifically provided that Dividend Withholding Tax (DWT) would apply to REIT dividends at the standard rate of income tax of 20%. As such, a non-resident REIT investor who might otherwise be exempt from DWT enjoys no exemption in respect of dividends paid by a REIT. However, non-resident REIT investors from countries with which Ireland has a tax treaty may be able to reclaim some part of this DWT if the relevant tax treaty allows for this. 

The taxation of dividends varies from treaty to treaty, but commonly a source state would retain the right to a withholding tax of up to 15% on dividends paid from that state. Subject to specified exceptions within the treaties, the reduced rate applying to dividends paid to investors resident in the countries mentioned in the Deputy's question, as provided for in the respective double taxation agreements, are as follows: 15% in USA, Canada, United Kingdom, Germany and Switzerland; 10% in China; 0% in Spain and Australia; and in the case of France and Austria no reduction in the 20% rate applies. Where the investor is a corporate and holds, generally, 25% or more of the voting power in the company paying the dividend the withholding tax rate can be further reduced.

As no dividends were paid by Irish REITS until 2015, no DWT was deducted in either 2013 or 2014, and consequently no claims for repayment of DWT were made by non-resident investors in either of those two years. In 2015, DWT amounting to €5,267,914 was collected in respect of dividends paid by Irish REITS, and DWT amounting to €67,955.13 was refunded to non-resident investors in respect of REIT dividends paid in 2015.

Question No. 334 answered with Question No. 75.

Departmental Meetings

Ceisteanna (335)

Pearse Doherty

Ceist:

335. Deputy Pearse Doherty asked the Minister for Finance the details of the meetings he or officials of his Department have had in 2015 and 2016 in relation to private equity funds, investment funds and REITs; the dates on which these meetings took place; the meetings listed which he was personally in attendance at; and if he will make a statement on the matter. [1932/17]

Freagraí scríofa

Minister for Finance

The information requested is being compiled and will be forwarded to the Deputy in line with Standing Orders.

The referred reply under Standing Order 42A was forwarded to the Deputy.

Financial Services Regulation

Ceisteanna (336)

Michael McGrath

Ceist:

336. Deputy Michael McGrath asked the Minister for Finance the regulatory status of personal contract plans and the regulatory status of the car finance companies offering these products; and if he will make a statement on the matter. [1943/17]

Freagraí scríofa

Minister for Finance

A Personal Contract Plan (PCP) is a type of hire purchase agreement.

The Consumer Credit Act 1995 applies to the provision of hire-purchase agreements. Both the Central Bank and the Competition and Consumer Protection Commission (CCPC) have certain functions and legal powers in relation to the regulation of hire-purchase agreements.

Any intermediary who is arranging the credit for the consumer is acting as a credit intermediary, and an intermediary arranging such credit must seek authorisation from the CCPC to act as a credit intermediary. A list of authorised credit intermediaries is available on the CCPC website www.ccpc.ie.

Question No. 337 answered with Question No. 234.

Question No. 338 answered with Question No. 46.

Home Repossessions Rate

Ceisteanna (339)

Bernard Durkan

Ceist:

339. Deputy Bernard J. Durkan asked the Minister for Finance the number of family home repossessions by each of the lending institutions in each of the past six months periods to date in 2017; if the cases in question were the subject of more than one court hearing in the preceding period; if any study has been completed of the paper trail generated by the lenders prior to repossession; if agreements were entered into and honoured by the borrowers in the preceding period; and if he will make a statement on the matter. [1961/17]

Freagraí scríofa

Minister for Finance

In respect of the number of Primary Dwelling Homes (PDH) repossessed by each lending institution, the Central Bank only publishes aggregate information for properties which have been repossessed on a quarterly basis. Therefore it is not possible to provide the requested breakdown.

In respect of the number of hearings per case we have no information on Court hearings and the Deputy may wish to direct this question to the Tánaiste and Minister for Justice and Equality Ms. Frances Fitzgerald TD, for further information. 

The Central Bank has informed me that they have not conducted a specific study of the paper trail connected to repossession applications. However, I would refer the Deputy to the most recent Central Bank Residential Mortgage Arrears & Restructures bulletin to end Q3-2016 and earlier quarterly bulletins on the Central Bank website which provide details of residential properties repossessed for each quarter. The Deputy may also be interested in the recently published Central Bank Mortgage Arrears Report, which examines mortgage restructuring activity within banks and non-banks, the range of solutions offered by non-banks and their impact on borrowers' capacity to remain in their primary residence. This report may be viewed at http://www.finance.gov.ie/what-we-do/banking-financial-services/publications/reports-research/report-mortgage-arrears-2016.