Tuesday, 14 Feb 2017

Written Answers Nos. 142 - 167

European Fund for Strategic Investments

Ceisteanna (142)

Barry Cowen

Ceist:

142. Deputy Barry Cowen asked the Minister for Finance the scope that exists to use the European Fund for Strategic Investments, EFSI, to increase Exchequer investment in public infrastructure by making better use of the flexibility that is built into the Stability and Growth Pact, in view of the stated position of the European Commission that it will take a favourable position on capital contributions to the fund in the context of its assessment of public finances under the pact. [6808/17]

Freagraí scríofa

Minister for Finance

I presume that the Deputy's reference to flexibility under the Stability and Growth Pact is to the "investment clause", which allows for a temporary deviation from the required structural budgetary adjustment for capital investment, co-funded by the EU, that increases the potential growth of the economy.

Use of the clause is subject to strict criteria, the most important of which relates to the concept of "bad economic times".  This is defined as having negative GDP growth or that output is sufficiently below its potential to result in a negative output gap of over 1.5% of GDP. Therefore, Ireland is not eligible as GDP growth was strongly positive in 2015 and is forecast, in Budget 2017, to remain positive over the outlook horizon at 4.2% in 2016, 3.5% in 2017 and 3.4% in 2018.  In addition, according to the Commission's Winter 2017 forecasts the output gap is forecast to be positive this year and next.

I want to assure the Deputy that the Government is fully aware of the importance and need for capital investment.  In the 2016 Summer Economic Statement, the Government set out plans to invest an additional €5.14 billion over the period to 2021.  This increase is reflected in the gross voted capital projections.  The outturn for 2016 of €4.24 billion will increase to nearly €7.3 billion per annum by 2021.  My colleague, the Minister for Public Expenditure and Reform, is undertaking a capital review this year to ensure that capital spending is fully aligned with national economic and social priorities.  This increase in gross voted capital relies to a large extent on the capital smoothing feature used in the expenditure benchmark, a flexibility built into it to, inter alia, encourage increases in capital formation.  So the Government is making use of the flexibility in the Pact.

At EU level, Ireland supports the European Commission's €315 billion Investment Plan for Europe, which includes the European Fund for Strategic Investment (EFSI). EFSI commenced operations in July 2015 from which time it has been possible for any project promoter, either public or private, to engage with the European Investment Bank regarding the possibility of receiving loans or guarantees under EFSI for particular projects.

Since inception, Ireland has seen the main potential beneficiaries of EFSI as being in the private sector including entities such as PPP companies. In this regard, I am pleased that the Department of Health's Primary Health Care Centres PPP has successfully drawn down EFSI funds.  In addition, the Strategic Banking Corporation of Ireland (SBCI) has successfully engaged with European Financial Instruments such as the COSME and the InnovFin Guarantee Programme, both of which are made available under the EFSI SME Window. These support the financing needs of SMEs and aims to ensure that there is an adequate supply of affordable and appropriate credit to meet their needs.

President Juncker launched a Commission proposal to extend EFSI both in terms of time and financial capacity on 14 September last and Ireland is fully engaged in the discussions towards securing an agreement that will continue to support investment across the EU including in Ireland.

European Fund for Strategic Investments

Ceisteanna (143)

Barry Cowen

Ceist:

143. Deputy Barry Cowen asked the Minister for Finance if the Exchequer or the NTMA has contributed towards, or will be contributing towards, the financing of specific projects or alternatively, participating via investment platforms under the European Fund for Strategic Investments; and if not, the reasons therefor. [6809/17]

Freagraí scríofa

Minister for Finance

Since the enactment of the European Fund for Strategic Investments (EFSI) Regulation in July 2015, it has been possible for any project promoter, either public or private, to engage with the EIB regarding the possibility of receiving support for their project in terms of loans or guarantees under EFSI.

In general, Government Departments have existing relationships with the EIB so it has been a matter for each Department concerned to advance projects in coordination with the Government's Capital Plan as overseen by my colleague, the Minister for Public Expenditure and Reform.  As the Deputy will be aware, approval of Exchequer capital projects, PPP projects and borrowing-led investment by semi-states are the policy responsibility of the Minister for Public Expenditure and Reform and, in this context, he engages with each line Department on an ongoing basis to consider and assess projects and the full range of available funding options. 

EFSI is an important additional funding possibility alongside others such as the EIB's normal lending, the State's borrowings through the NTMA and other mechanisms such as PPPs and off-balance sheet vehicles. However it should be remembered that each EFSI loan entered into by the State pre-commits funding for the repayment of such loans, and has to be considered in the context of the expenditure benchmark under the EU's fiscal rules. The answer, therefore, is not simply about spending more; it is about matching the most appropriate source of funding with investment needs, and ensuring that taxpayers' money is spent wisely.

Since EFSI's inception, Ireland has seen the main potential beneficiaries of EFSI as being in the private sector including entities such as PPP companies. In this regard, I am pleased that the Department of Health's Primary Health Care Centres PPP has successfully drawn down EFSI funds. 

Also recently announced, the European Investment Bank (EIB) and Ireland Strategic Investment Fund (ISIF) agreed to support a €112 million investment in privately owned forests across Ireland. This new engagement with Dasos, a specialist forestry investment fund, represents the first forestry project in the E.U., to be supported by EFSI. The ISIF will provide €55 million and the EIB, through EFSI, will provide €28.5 million for the scheme. Additional support is expected from other investors as the initiative progresses.  The scheme will seek to address issues faced by small scale forests across the country by working to improve forest management and strengthen the supply of wood for commercial use. The investment will support crucial upgrades to Ireland's forestry infrastructure through the consolidation of its management.

Given my Department and the NTMA have limited capital expenditure, the EFSI SME window is of most relevance to my Department.  Through this window, the Strategic Banking Corporation of Ireland (SBCI) has successfully engaged with European Financial Instruments such as the COSME and the InnovFin Guarantee Programmes.  In 2016, the SBCI successfully applied for a €100 million guarantee facility under the COSME programme. The SBCI will use this facility to support the delivery of the Agri Cash Flow Support Loan Fund for Farmers as announced in Budget 2017, on behalf of Department of Agriculture Food and the Marine. The SBCI has also submitted an application for the InnovFin Guarantee Programme and is currently engaging with potential partner banks with regard to creating a pilot program for a guaranteed loan product.

There is a publicly available list of projects related to Ireland which have been approved for EFSI support by the EIB which is available on the EIB website at: http://www.eib.europa.eu/efsi/efsi-projects/index.htm?c=IE&se. However, I would ask the Deputy to be aware that this list may not reflect Irish private sector project promoters participating in a project that could receive funding from EFSI loans/guarantees but which is led or based in another EU Member State.

Insurance Costs

Ceisteanna (144)

Jan O'Sullivan

Ceist:

144. Deputy Jan O'Sullivan asked the Minister for Finance the steps he has taken to regulate the providers of car insurance here to combat the excessive premium increases being quoted over the past 12 months; and if he will make a statement on the matter. [6810/17]

Freagraí scríofa

Minister for Finance

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  Neither I nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.

However, I do accept that it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the cost of insurance.  Consequently, I established the Cost of Insurance Working Group and appointed Minister of State Eoghan Murphy as Chair.  The Report on the Cost of Motor Insurance was finalised in December 2016, approved by Cabinet on 10 January 2017, and subsequently published.  It contains 33 recommendations and 71 actions which are detailed in an action plan contained in the Report with agreed timelines for implementation, covering six main themes:

- Protecting the consumer

- Improving data availability

- Improving the personal injuries claims environment

- Reducing the costs in the claims process

- Reducing insurance fraud and uninsured driving, and

- Promoting road safety and reducing collisions

The recommendations include actions to:

- address the lack of transparency in the claims environment, through the establishment of a national claims information database which will be located in the Central Bank;

- provide enhanced guidance in how to determine compensation for personal injuries claims, through the establishment of a Personal Injuries Commission;

- address the increasing level of uninsured driving, through the establishment of a fully functioning database which will allow the Gardaí to check insurance compliance through the use of technology such as Automatic Number Plate Recognition; and

- address the issue of suspected fraud, through the establishment of a database that will be funded by industry but held by an independent body and that will take into account data protection concerns.

A number of the actions are already underway and I am confident that the report's 71 actions will be implemented by the end of 2018, with 45 due for completion this year.

While there is no silver bullet to reduce the cost of insurance, cooperation and commitment between all parties can deliver fairer premiums for consumers without unnecessary delay.  This will lead to greater stability in the pricing of motor insurance and will help prevent the volatility that we have seen in the market in the past.  It should also better facilitate potential new entrants to the market.

The Working Group will continue to meet in 2017 as the project enters its implementation phase.

Cyber Security Policy

Ceisteanna (145)

Noel Rock

Ceist:

145. Deputy Noel Rock asked the Minister for Finance the actions his Department is taking to defend against cyber attacks after the National Treasury Management Agency, NTMA, website was temporarily down for several hours after a suspected hacking attack; and if he will make a statement on the matter. [6881/17]

Freagraí scríofa

Minister for Finance

In response to the Deputy, I wish to advise that ICT services to the Department of Finance are provided by the Office of the Government Chief Information Officer (OGCIO) under the Department of Public Expenditure and Reform.  On behalf of my Department, the OGCIO implements a multi-layered approach to cyber security and to protecting ICT systems, infrastructures, and services.  The threat landscape is constantly evolving and significant effort is expended to continually enhance and strengthen ICT security to mitigate against emerging threats, risks, vulnerabilities and cybersecurity issues. In addition to deploying intrusion protection systems, software vulnerabilities are managed by maintaining up-to-date versions.  OGCIO also continues to work closely with the National Cyber Security Centre (NCSC). The NCSC is a division of the Department of Communications, Climate Action & Environment and encompasses the State's national/governmental Computer Security Incident Response Team (CSIRT-IE).

Insurance Costs

Ceisteanna (146)

Mary Butler

Ceist:

146. Deputy Mary Butler asked the Minister for Finance when the recommendations of a working group (details supplied) will be complete; the agreed timelimes; if they will be delivered within those timelines; and if he will make a statement on the matter. [6950/17]

Freagraí scríofa

Minister for Finance

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. 

However, I do accept that it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the cost of insurance.  Consequently, I established the Cost of Insurance Working Group and appointed Minister of State Eoghan Murphy as Chair.  The Report on the Cost of Motor Insurance was finalised in December 2016, approved by Cabinet on 10 January 2017, and subsequently published. It contains 33 recommendations and 71 actions which are detailed in an action plan contained in the Report with agreed timelines for implementation.  Work on carrying out these recommendations is underway and I am confident that the report's 71 action points will be implemented by the end of 2018, with 45 due for completion this year.  The Working Group continues to meet regularly and will report on a quarterly basis detailing its progress.

With regard to the taxi sector in particular, I am aware that it made representations to my Department and the Cost of Insurance Working Group and these were taken into consideration during the review.  The position of the taxi sector, which serves a social as well as an economic purpose, particularly in rural areas where public transport is less readily available, was acknowledged by the inclusion in the Report of a recommendation for the Advisory Committee on Small Public Vehicles (commonly referred to as the Taxi Advisory Committee (TAC)) to enter regular discussions with Insurance Ireland in order to explore solutions for drivers in the sector.  In this respect, the Department of Transport, Tourism and Sport has informed my department that it has been working with the TAC towards implementing the relevant action points within the required timelines, i.e., for the TAC to meet with Insurance Ireland in Q1 2017 (Action Point No. 20), and for the TAC to report to the Minister for Transport, Tourism and Sport in Q2 2017 (Action Point No. 21).

Finally, the issues raised by the taxi sector were in the main similar to those affecting consumers generally.  While there is no silver bullet to reduce the cost of insurance, cooperation and commitment between all parties can deliver fairer premiums for consumers, including taxi drivers, without unnecessary delay.  This will lead to greater stability in the pricing of motor insurance and will help prevent the volatility that we have seen in the market in the past.  It should also better facilitate potential new entrants to the market.  Taken together, these would address many of the issues raised by the taxi sector.

Property Tax Administration

Ceisteanna (147)

Noel Rock

Ceist:

147. Deputy Noel Rock asked the Minister for Finance if he will consider allowing VAT paid on maintenance fees on apartments to be offset against the local property tax in budget 2018; and if he will make a statement on the matter. [6966/17]

Freagraí scríofa

Minister for Finance

The Government decided that the LPT should be centred on the principles of equity, transparency and simplicity and that a universal liability should apply to all owners of residential property with a limited number of exemptions and reliefs.  Limiting the reliefs available allows the rate to be kept to a minimum for those liable persons who do not qualify for relief.

Properties in managed estates, to which management fees apply, would have been purchased by their owners in the knowledge that they would be taking on commitments to partake in, and to fund, the management of the estate, and that it was the intention that many such estates would not be taken in charge by local authorities, nor would it be appropriate for local authorities to do so.

Management fees in these estates can include services such as refuse collection, maintenance of common areas as well as a sinking fund for certain repairs to the buildings, depending on circumstances. These are costs which homeowners in other households have to fund themselves for their own properties.

Revenue from the LPT accrues to local authorities and supports the provision of local services.  Local authorities provide a broad range of services in the public realm, which benefit the wider community.  The proper functioning of these services are important for the wellbeing of every community and household.  These include: fire and emergency services; road maintenance and cleaning; street lighting; spatial and development planning and other similar services; regulatory and inspection functions and business support services, as well as libraries, parks, and other recreation and cultural public amenities.  The benefits of these services accrue to all members of society.

A requirement to pay management fees is not relevant in determining whether a property is subject to the LPT.  Accordingly, whilst those who are liable for management fees to property management companies may be exempt from LPT for another reason, or may be entitled to avail of a deferral arrangement under the provisions contained in the legislation, there is no specific exemption for the payment of management fees, nor is there provision to offset the VAT paid on management fees against LPT.  There are no plans to change this basis of liability to LPT.

Help-To-Buy Scheme Data

Ceisteanna (148, 159)

Mattie McGrath

Ceist:

148. Deputy Mattie McGrath asked the Minister for Finance the status of the operation of the help-to-buy scheme in County Tipperary; and if he will make a statement on the matter. [6975/17]

Niamh Smyth

Ceist:

159. Deputy Niamh Smyth asked the Minister for Finance the number of persons that have applied under the first-time buyer scheme as announced in budget 2017; the counties they applied from, in tabular form; and if he will make a statement on the matter. [7328/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 148 and 159 together.

The Help To Buy (HTB) scheme is available nationally and individuals are required to complete a two-stage online process; an application and then a claim.  I am advised by Revenue that the number of Help To Buy applications received up to 10 February 2017 was:

No. of Applications	Successful applications	*Pending
2586	620	1,966

*Pending means that the applicant either has to file an outstanding return, or address a compliance issue, or the application is to be reviewed by Revenue, or the applicant needs to finalise his or her application. 

The purpose of the application stage of the Help To Buy process is such that would-be first-time buyers can determine whether, and to what extent, they qualify for the incentive.  As the data from the application stage are only an indicator as to possible take-up of the incentive, for example, an applicant may not proceed to claim stage or may not get mortgage approval, the application statistics are not collated by County.

At the claim stage, however, Help To Buy claimants are required to provide information on the location of the qualifying residence and therefore Revenue is in a position to provide certain details on the location of Help To Buy claims made.  However, to protect the confidentiality of taxpayer information, I can only provide a breakdown based on properties situated in Dublin and in provincial locations. Up to 10 February 2017, Revenue has processed 205 claims and the relevant breakdown is as follows:

Location	Number
Connacht/ Ulster	15
Dublin	83
Leinster (outside Dublin)	63
Munster	44
Total	205

VAT Exemptions

Ceisteanna (149)

Timmy Dooley

Ceist:

149. Deputy Timmy Dooley asked the Minister for Finance if he will give consideration to allowing a not-for-profit organisation (details supplied) to be made VAT exempt; and if he will make a statement on the matter. [6988/17]

Freagraí scríofa

Minister for Finance

Schedule 1 of the Value-Added Tax Consolidation Act 2010 lists the activities that are exempt from VAT which includes the provision of services by a funeral undertaker but does not extend to the supply of graves. The supply of a grave in a graveyard that is more than 5 years old is also exempt from VAT, but the supply of a grave in a newly developed graveyard is liable to the reduced rate of VAT (13.5%). However, the operator of a newly developed graveyard is entitled to VAT deductibility on their development costs as well as ongoing maintenance costs during the period where VAT is applied to the supply of graves.

Revenue Commissioners

Ceisteanna (150, 151, 158)

Pearse Doherty

Ceist:

150. Deputy Pearse Doherty asked the Minister for Finance the current operational status of a local Revenue Commissioners' office (details supplied) in County Tipperary; if there any plans to close the front office services at this location; if so, when; and if he will make a statement on the matter. [7012/17]

Pearse Doherty

Ceist:

151. Deputy Pearse Doherty asked the Minister for Finance the current operational status of each local Revenue Commissioners' office (details supplied); and if he will make a statement on the matter. [7013/17]

Jackie Cahill

Ceist:

158. Deputy Jackie Cahill asked the Minister for Finance the reason for the decision by the Revenue Commissioners to close its offices at Stradavoher, Thurles, County Tipperary, to the public from June 2017; if this is departmental policy (details supplied); if he will instruct the Revenue Commissioners to reverse this decision; and if he will make a statement on the matter. [7247/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 150, 151 and 158 together.

As the Deputies will be aware, it is long established that Revenue are independent in the exercise of their functions and this is now set out in Section 101 of the Minister and Secretaries (Amendment) Act 2011.  I have no power to instruct them on matters relating to those functions including how and where they allocate their resources or where they place their offices.

I am informed by Revenue that they are not closing the Thurles office or its front office services.  Revenue offers a range of service channels to support taxpayers to comply voluntarily with their tax and duty obligations. Revenue continues to enhance their service offering  and, in particular, the channels through which their customers can obtain information and/or engage with them. For example as regards key tax and duty information, Revenue is currently re-designing its website to better meet the need of taxpayers for clear and easy to understand information.

Many taxpayers prefer to do business online and at a time of their convenience.  To meet that need, Revenue has in place modern, high-quality, accessible and user friendly online services for taxpayers to manage their tax affairs at a time that best suits each taxpayer.  Revenue continues to enhance those services and recent on-line developments include the facility for PAYE customers to file their tax returns online; the 'myaccount' service, eTax Clearance and the 'MyEnquiries' secure online enquiry facility.  Additional developments are in the pipeline.

Revenue has also significantly improved its telephone services including the introduction of a new Business Taxes service and consistent opening hours across the telephone services given greater certainty for taxpayers.

Enhanced online services and improved telephone service has resulted in a reduced demand for the traditional 'walk-in' services to public offices.  The number of personal callers fell by 64% since 2008, from 1.15m callers to approximately 400,000 in 2015. I am advised by Revenue that taxpayers are choosing different channels to 'walk-in' services and are getting the information and assistance they require in a way that better meets their needs.

In this regard, Revenue introduced an appointments service in a number of public offices in 2015 and 2016 and will extend this to other offices, including Thurles, in the coming months.  An appointments service provides a further improvement in Revenue's service to taxpayers by eliminating the need for queuing and reduces the time involved for taxpayers. The move to an appointments service is advised, locally, in advance with notices in the particular Revenue office, other public notices, through local media and on Revenue's website www.revenue.ie. This will be the case as regards the Thurles office in due course. 

I am informed by Revenue that they have eighteen public offices around the country.  Staff in these offices are, generally speaking, equipped to deal with the full range of issues raised by taxpayers when they call.  Approximately 75 fulltime equivalent staff are directly involved in the provision of walk-in services in these public offices.  Extra resources are assigned to meet peak period demand during the year. Details of staff numbers allocated to 'walk-in' services in the last five years are not available. However, I am advised by Revenue that it is likely that the numbers have reduced in that time due to the changing preferences of customers for online and telephone service channels.

Financial Services Sector

Ceisteanna (152)

Pearse Doherty

Ceist:

152. Deputy Pearse Doherty asked the Minister for Finance the total number of persons who received a refund and-or compensation from financial institutions following the Central Bank's summary report on payment protection insurance mis-selling, in tabular form, inclusive of the specific number of affected persons with regard to each financial institution; the total value of refunds and compensation paid by each institution; and if he will make a statement on the matter. [7166/17]

Freagraí scríofa

Minister for Finance

The Central Bank has previously informed me that, in accordance with section 33AK of the Central Bank Act 1942, the Central Bank is prohibited from disclosing confidential information concerning the business of a credit institution otherwise than in accordance with the Supervisory Directives (which include the Directive 2013/36/EU).

On the issue more generally, the Central Bank issued a report on 7 March 2014 on the review into the sales of Payment Protection Insurance (PPI) by eleven credit institutions which said that refunds of €67.4m were made to 77,000 policyholders. 

In reply to a PQ in 2015, I provided Central Bank updated figures of a total refund of €69.5 million to around 83,490 policyholders.  The latest figure provided by the Bank of the amount refunded is just over €70 million however, the Bank does not have an up to date figure for the number of policyholders. 

Tax Data

Ceisteanna (153)

Pearse Doherty

Ceist:

153. Deputy Pearse Doherty asked the Minister for Finance the number of appeals before the Tax Appeals Commission on the first day of each of the past 12 months; and if he will make a statement on the matter. [7181/17]

Freagraí scríofa

Minister for Finance

I am advised by the Tax Appeals Commission that the number of appeals before the Commission on the first day of each of the past twelve months is as follows:

	01-Feb	01-Mar	01-Apr	01-May	01-Jun	01-Jul	01-Aug	01-Sep	01-Oct	01-Nov	01-Dec	01-Jan	Totals
	2016	2016	2016	2016	2016	2016	2016	2016	2016	2016	2016	2017
2016 Cases	25	57	94	168	228	303	392	449	516	572	626	690	690
Open cases received from Revenue							381		961		1,385		2,727

In addition to the foregoing, as at 31 December, 2015 the Appeal Commissioners had approximately 425 cases on hand.  A month-by-month breakdown of the disposal of these pre-2016 appeals is not available at present.  However, as of 31 December 2016 the 425 had reduced to 186 cases.  Essentially, it would be appropriate to add this 186 to the totals in the above table. I am further advised that the above figures include significant numbers of appeals relating to a common net legal issue and/or a common set of circumstances.  It is anticipated that many of these appeals will be settled or withdrawn following the hearing and determination of appropriate test cases.

In relation to the open appeal cases received from Revenue in 2016, I understand that the Tax Appeals Commission has been advised by Revenue that a significant number of these appeals will not require hearing and determination following the outcome of certain legal proceedings in the civil courts, and that a further significant number is likely to be resolved by agreement between Revenue and the taxpayers depending on the outcome of further legal proceedings which have yet to be concluded. 

The latest information received from Revenue indicates that there are 2,058 open cases (rather than the 2,727 in the table above) which will require the attention of the Commission.  The latter is in the process of reviewing and analysing the appeal details received from Revenue and is not yet in a position to express a view on the exact number of transferred appeals which are likely to require hearing and determination.

I have sanctioned the provision of significant additional personnel resources, at both temporary Appeal Commissioner level and at support staff level, specifically to deal with the large numbers of open cases that were transferred from Revenue.  I understand that it is the Commission's intention that the role of the additional temporary Appeal Commissioners will be to focus solely and exclusively on addressing these cases.

Section 21 of the Finance (Tax Appeals) Act 2015 requires the Appeals Commissioners to prepare and present an Annual Report to the Minister for Finance on or before 31 March in each year post commencement. I understand that the Annual Report will include comprehensive statistics in relation to the processing of appeals by the Commission.

Legislative Measures

Ceisteanna (154)

Pearse Doherty

Ceist:

154. Deputy Pearse Doherty asked the Minister for Finance if his Department or the Revenue Commissioners have identified any issues of concern with regard to the Finance (Tax Appeals) Act 2015; and his plans to amend the legislation. [7182/17]

Freagraí scríofa

Minister for Finance

The objectives of the Finance (Tax Appeals) Act 2015 were to bring reform of the role, functions and structure of the Office of the Appeal Commissioners and of the tax appeals system with a view to ensuring an enhanced and cost effective appeal mechanism for tax cases. The Act, which was commenced on 21st March 2016, inter alia provides for the establishment of the Tax Appeals Commission (TAC) which was established on the same date. The legislation has therefore been in operation for less than one year. I understand that Revenue has not identified any issues of concern with the Finance (Tax Appeals) Act 2015.

I further understand that the TAC proposes to undertake a consultative process related to the operation of its Rules of Procedure involving all stakeholders around the first anniversary of the coming into force of the legislation. This will be a listening exercise which will consider submissions and contributions and publish a report of the exercise on the TAC website. I expect that this exercise will provide an opportunity to raise issues about the operation of the reformed tax appeals system including any issues arising that are of relevance to the legislation. My Department will of course consider the findings of this consultative process in due course.

Financial Services Sector

Ceisteanna (155)

Michael McGrath

Ceist:

155. Deputy Michael McGrath asked the Minister for Finance if his attention has been drawn to the fact that an equity fund (details supplied) is offering significant debt write-offs to mortgage holders; and if he will make a statement on the matter. [7183/17]

Freagraí scríofa

Minister for Finance

I was not formally made aware of the issue to which the Deputy refers, but of course I had seen reports in the media about it.  The Deputy will be aware that the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 introduced a regulatory regime for a new type of entity called a 'credit servicing firm'.  Under the Act, purchasers of loan books must either be regulated by the Central Bank themselves or else the loans must be serviced by a credit servicing firm that is regulated by the Central Bank. The significant point is that that the focus of regulation is directly at the point of contact with the customer. Therefore 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, Code of Conduct on Mortgage Arrears) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which came into operation in July 2016.

I would refer the Deputy to the Central Bank report on mortgage arrears, which was prepared following my request to the Governor.  This report provides a detailed assessment of mortgage arrears in banks and non-bank entities and includes analysis on mortgage restructuring activity and the range of solutions offered.  This report was published on 16th December 2016 and is available on http://www.finance.gov.ie/what-we-do/banking-financial-services/publications/reports-research/report-mortgage-arrears-2016.  The report found that the range of mortgage debt solutions offered by banks and non-banks is broadly similar. 

Finally, I would strongly advise any individual availing of the scheme in question to ensure they seek independent financial/legal advice on the terms and conditions of the offer made and all of its implications for them, prior to the acceptance of such offer.

Question No. 156 answered with Question No. 130.

Question No. 157 answered with Question No. 134.

Question No. 158 answered with Question No. 150.

Question No. 159 answered with Question No. 148.

Tax Code

Ceisteanna (160)

Catherine Connolly

Ceist:

160. Deputy Catherine Connolly asked the Minister for Finance the reason a married couple with one spouse working can earn up to €42,800 taxed at 20% while a single parent begins to pay the higher rate of tax after €37,800 which, given that the married couple with one spouse being a home maker also gets €1,100 extra credit, is discrimination against a single parent who pays an extra €1,000 in taxes; and if he will make a statement on the matter. [7370/17]

Freagraí scríofa

Minister for Finance

A single parent may be eligible for the Single Person Child Carer Credit of €1,650 per annum. This credit also provides an entitlement to an additional €4,000 extended standard rate band. A single individual with no children is entitled to a standard rate band of €33,800. An individual in receipt of the SPCCC is entitled to a standard rate band of €37,800.

The income tax system started moving towards a system of individualisation in 1999, and individualisation is now integral to the overall system. When first announced, the stated purposes of individualisation were to ease the burden on single persons, including single parents, to take workers on the average industrial wage out of the higher rate of tax and more generally to facilitate a reduction in the numbers paying tax at the higher rate. Prior to this, a second spouse faced the marginal rate of tax on the first euro (or Punt as it was then) earned in his or her own name.  Individualisation was progressed to some extent in later years but never completed. The Home Carer credit was introduced in the context of the move towards individualisation of the tax system, in recognition of the choices made by families where one spouse stays at home to care for children or the elderly.

The issue of tax individualisation was considered by the Commission on Taxation in 2009 and that body recommended no change should be made to the current system. It concluded that the current system represents a balance between, on the one hand, acknowledging the choices families make in caring for children and, on the other, taking account of the need to encourage labour market participation.

The composition of households can vary and thus the costs and expenses of households can also vary.  Generally speaking a household of a greater number of individuals will generally have greater outgoings than a household of a lower number of individuals. I am satisfied that the income tax system provides positive support to the various household compositions.

The Deputy will be aware that my Department published an Income Tax Reform Plan, in July last year, providing a detailed overview of relevant policy considerations, including the necessity to maintain the breadth of our income tax base, and retain appropriate levels of taxation for high earners.

The purpose of this Income Tax Reform Plan was to inform all members of the Oireachtas of the issues and options which will underpin future income tax reform, and it is my hope that all members of the Oireachtas will engage constructively in debating options for future reform in this area. In this regard the scope for change will be dependent on the level of available fiscal resources.

Tax Exemptions

Ceisteanna (161)

Michael McGrath

Ceist:

161. Deputy Michael McGrath asked the Minister for Finance the current number of applications for charitable status; the length of time it is typically taking for applications to be processed; and if he will make a statement on the matter. [7403/17]

Freagraí scríofa

Minister for Finance

It is unclear as to whether the Deputy's question relates to charitable status or charitable tax exempt status. The former relates to the regulatory control of charities, and the processing of applications for charitable status, is a matter for the Charities Regulatory Authority (CRA), which was established in October 2014 under the aegis of the Department of Justice and Equality.

The Charitable Tax Exemption scheme is administered by Revenue in accordance with Section 207 of the 1997 Taxes Consolidation Act. The scheme provides relief from Income Tax, Corporation Tax, Capital Gains Tax, Capital Acquisitions Tax, Deposit Interest Retention Tax (DIRT), Dividend Withholding Tax and Stamp Duties in certain circumstances, to bodies or trusts that are established solely for charitable purposes.

Revenue's role in administering the Charitable Tax Exemption scheme includes processing and vetting applications from bodies or trusts claiming entitlement to the relief. Revenue receives an average of three hundred new applications for the relief each year and has advised me that the usual processing time is approximately three weeks. 

For the Deputy's information, there are almost 8,000 bodies currently holding Charitable Tax Exemption status. The full list is available at the following link. http://www.revenue.ie/en/about/statistics/registrations-assessments-transactions-charitable-exemption.html

IBRC Operations

Ceisteanna (162)

Michael McGrath

Ceist:

162. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 193 of 7 February 2017, if he will provide details of the use of section 110 companies by the Irish Bank Resolution Corporation, IBRC, including the number of section 110 companies set up by IBRC; the purpose of setting up these companies; when they were set up; if third parties were involved in these companies; the tax implications of using this tax structure; and if he will make a statement on the matter. [7406/17]

Freagraí scríofa

Minister for Finance

I am advised by the Special Liquidators of IBRC that there were no active Section 110 structures in place at the time of their appointment. However, they have identified at least two historic loan securitisation transactions that involved the use of Irish Section 110 structures which were unwound prior to their appointment. The information available to the Special Liquidators indicates that the transactions involved the securitisation of loans (including non-Irish loans) to raise cost efficient funding for the then bank's day to day business. Such securitisation transactions are commonly undertaken by banks around the world to raise funding. The information available to the Special Liquidators would indicate that the transactions identified were typical of the securitisation transactions generally undertaken by banks and were not of the character targeted by the changes to the Section 110 regime introduced by Finance Act 2016.

Help-To-Buy Scheme

Ceisteanna (163, 164)

Eoin Ó Broin

Ceist:

163. Deputy Eoin Ó Broin asked the Minister for Finance if help-to-buy scheme applicants can claim the rebate retrospectively in the event of the contractor not being registered for the scheme with the Revenue Commissioners at the deposit stage of a home purchase. [7430/17]

Eoin Ó Broin

Ceist:

164. Deputy Eoin Ó Broin asked the Minister for Finance in view of the low level of contractor registration for the help-to-buy scheme, his plans to address this problem; and the reasons a contractor may not register for the scheme. [7431/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 163 and 164 together.

Under the Help to Buy (HTB) scheme first-time home purchasers are required to ensure that they purchase from a 'qualifying contractor'.  I am advised that up to 10 February 2017 there were 138 applications for registration as a 'qualifying contractor' and Revenue has approved 55 contractors. The remaining applications are being processed, and any unsuccessful applicants are advised about how to address any issues arising in their application.  Details of the approved contractors are published on the Revenue website. I am advised by Revenue that they have seen a steady increase in the number of applications.  There were 9 applications for registration received in late 2016, 89 in January and 40 in the first two weeks of February.

I understand that there is a significant volume of queries from contractors about the scheme, and about the information needed to register as a 'qualifying contractor'.  Revenue presented at an information session organised by the Construction Industry Federation in January which was very well attended, and are to present at two further information sessions in Cork and Galway soon. The steady volume of applications and the level of interest in the scheme are apparent and I do not believe that there is a problem with the incentive. 

I would also point out that the scheme is still relatively new, and is due to run until the end of 2019.  While there is strong interest in Help To Buy, it is too early to draw any firm conclusions from the data emerging at this stage.

Regarding retrospective claims, the legislation underpinning the Help To Buy incentive is set out in section 477C Taxes Consolidation Act 1997.  The section distinguishes between refunds made in respect of contracts entered into in the period from 19 July to 31 December 2016 and those in the period from 1 January 2017 to 31 December 2019.  'Retrospective' first-time buyers are those persons who purchased in the period from when the incentive was announced on 19 July 2016 until the end of 2016 and the legislation provides that any such HTB refunds are paid directly to the claimant's bank account.  HTB refunds for first time buyers of new homes in the period from 2017 onwards, are however, payable to the qualifying contractor's bank account.  I am advised by Revenue that 'retrospective' first-time buyers who claim their HTB refund should have that claim verified by their contractor.  In the event that they cannot get their contractor to verify their claim, they should contact Revenue online via the 'MyEnquiries' facility.

With regard to the reasons why a contractor may not register for the scheme, I expect that would arise for non-compliant contractors who do not have valid tax clearance and would not be considered compliant for Relevant Contracts Tax purposes.  The HTB scheme provides that the tax credit is payable at deposit stage and in many cases will be paid before the house is built. I think it is extremely important that the contractor is tax compliant, as non-compliance is a very clear indicator that the contractor may not be financially sound and not in a position to complete the contract.  I strongly encourage any contractor who is non-compliant, and wishes to be registered as a 'qualifying contractor', to contact Revenue with a view to regularising their tax affairs.

Ireland Strategic Investment Fund Investments

Ceisteanna (165)

Michael McGrath

Ceist:

165. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No.193 of 7 February 2017, the details of the use of section 110 companies by the Ireland Strategic Investment Fund, ISIF, including the number of section 110 companies that ISIF was and remains party to; the purpose of setting up these companies; when they were set up; if third parties were involved in these companies; the tax implications of using this tax structure; and if he will make a statement on the matter. [7433/17]

Freagraí scríofa

Minister for Finance

As the Deputy is aware, all investments made by the Ireland Strategic Investment Fund (ISIF) are assets of the State and any profits generated from ISIF investments are used to fund new investments on behalf of the State in accordance with ISIF's legislative mandate.  The use of Section 110 companies by Irish Investors, including entities such as ISIF, is not a concern as profits from these vehicles are ultimately taxable in Ireland.

Of its 56 investments to date, ISIF, as a commercial investor on behalf of the State, is party to four investments which involve Section 110 structures.  These investments were made in the period since 2013.  These investments are consistent with the purpose of ISIF which is to invest in a commercial manner designed to support economic activity and employment in Ireland.   

A fundamental aspect of ISIF's mandate is to act as a catalyst for co-investment in the Irish economy from private sector capital.  In that context, ISIF structures its investments in a commercial manner, and it is essential that it do so if it is to be successful in attracting private sector capital to co-invest alongside it in Ireland.

Having checked with the independent managers of these investments, ISIF does not currently anticipate any additional tax liability arising from the legislative changes to Section 110 for any of the investors in these investments. 

These investments are also consistent with the original purposes of the Section 110 securitisation regime, which has been a long standing deliberate feature of the Irish tax code and is a legal way for investments to be made in a wide variety of asset classes. It has helped job creation and investment in the Irish financial services sector for many years.

Housing Data

Ceisteanna (166, 167)

Michael McGrath

Ceist:

166. Deputy Michael McGrath asked the Minister for Finance in respect of each regulated bank, the number of habitable residential properties they own or control which are currently vacant; the reasons such properties are vacant; the number of habitable residential properties currently controlled by receivers appointed by that bank which are vacant; and if he will make a statement on the matter. [7453/17]

Michael McGrath

Ceist:

167. Deputy Michael McGrath asked the Minister for Finance in respect of each unregulated fund, the number of habitable residential properties they own or control which are currently vacant; the reasons such properties are vacant; the number of habitable residential properties currently controlled by receivers appointed by that fund which are vacant; and if he will make a statement on the matter. [7454/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 166 and 167 together.

I am informed by the Central Bank that it does not have the data requested.  The Central Bank publishes only aggregate data for PDH and BTL accounts regarding the number of properties in possession at the beginning and end of each quarter, the number of properties repossessed on foot of a Court Order, the number of properties voluntarily surrendered or abandoned during the quarter and the number of properties disposed of during the quarter.  This information is contained in the Central Bank's quarterly release on Residential Mortgage Arrears and Repossession Statistics.

In its latest statistical release, published on 12 December 2016, the Central Bank noted that during the third quarter of 2016 rent receivers were appointed to 606 BTL properites, bringing the stock of accounts with rent receivers appointed to 6,051.