Tax Code

Ceisteanna (169)

Éamon Ó Cuív

Ceist:

169. Deputy Éamon Ó Cuív asked the Minister for Finance the number of persons who paid the domicile levy who were tax exiles; his views on whether this levy ensures that tax exiles pay a fair proportion of tax here; and if he will make a statement on the matter. [34154/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Domicile Levy was introduced in the Finance Act 2010 to ensure that wealthy individuals make a contribution to the State during a time of economic and fiscal difficulty.  It applies to Irish domiciled individuals, wherever they are resident, who: 

have a world-wide income greater than €1 million

own Irish property greater than €5 million; and

pay €200,000 or less in Irish income tax.

Irish tax residence is not a requirement for the Levy to apply.

The amount of the levy is €200,000 and is payable annually where these conditions are met. 

The Domicile Levy is payable on or before 31 October in the year following the valuation date on a self-assessment basis. For example, the due date in respect of 2015 was 31 October 2016. The valuation date is 31 December each year. The legislation providing for the Domicile Levy does not require an individual to confirm a place of residence on the return made to Revenue.

For the tax years 2010 and 2011, it was a requirement that the person liable be both an Irish citizen and Irish domiciled. The requirement to be an Irish citizen was removed for the tax year 2012 and later years.

The purpose of the Levy is to ensure that Irish-domiciled individuals who meet certain criteria make a contribution to the Exchequer, irrespective of where they are resident for tax purposes.

Where the Levy applies to an individual for a tax year, he or she is entitled to credit any Irish income tax paid for that year against the amount of the Levy.

The following table sets out the number of persons who have filed Domicile Levy returns and the amount collected since commencement. The table excludes 2016, which is not due until 31 October 2017.

Levy Year

No of Persons

Amount Collected   (€m)

2010

32

€3.43

2011

33

€3.69

2012

24

€2.44

2013

20

€1.90

2014

13

€2.02

2015

13

€2.30

Insurance Costs

Questions Nos. 171 and 172 answered with Question No. 145.

Ceisteanna (170)

Charlie McConalogue

Ceist:

170. Deputy Charlie McConalogue asked the Minister for Finance if his attention has been drawn to the financial pressure being experienced by livestock markets as a result of rocketing insurance costs; the steps his Department is taking to address the rising costs of insurance for marts; and if he will make a statement on the matter. [34192/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

This matter has been brought to my attention and was the subject of a Topical Issue discussion last week. In preparation for this discussion, my officials contacted Insurance Ireland who advised that livestock marts have significant exposure to injuries to employees and members of the public. This has resulted in claims occurring with a level of frequency which has led to a reduction in market capacity due to the hazardous nature of the risk. In response, insurers have developed active risk management programmes in order to try to reduce the level of accidents and injuries. In addition, I understand that insurers have been working with marts with a view to implementing improvements in management practices and facilities to reduce claims as this is the key area to manage claim costs.

However, Insurance Ireland has advised that they are not aware of any recent major increases in the cost insurance for agricultural mart owners. However, if the Deputy is aware of a specific issue facing an individual mart owner, I recommend that he or the mart owner raise it with Insurance Ireland who I understand are happy to discuss the issue as part of their free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance.  Insurance Ireland can be contacted at feedback@insuranceireland.eu or 01-6761914. 

The Deputy should also note that in my role 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.  Consequently, I am not in a position to review individual cases nor to direct insurance companies as to the pricing level or terms or conditions that they should apply in particular cases. 

Nevertheless, it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the availability and cost of insurance.  In terms of measures being taken to tackle the cost of employer and public liability, the Deputy will be aware that this is being examined as part of the second phase of the Cost of Insurance Working Group. The Working Group is building upon the previous work done in the motor phase in order to determine how it can be applied in the employer and public liability insurance claims areas. The Working Group is also considering the impact of the cost of insurance on the competitiveness of particular business sectors, the impact of health and safety issues on the cost of insurance and other market issues. 

The Working Group has held extensive consultations with a range of stakeholders including the Irish Farmers Association, who provided a submission to the Working Group. This issue was not raised in their submission.

It is envisaged that the final results of the second phase will take the form of an addendum to the existing Report. As with the first phase, the aim is for all relevant bodies and stakeholders to work together in order to deliver fairer premiums for businesses without unnecessary delay.  As it is likely that employer and public liability risks is a factor in the cost of insurance for marts, any recommendations emerging from this review should be of relevance to the mart sector.

Questions Nos. 171 and 172 answered with Question No. 145.

Tax Reliefs Data

Ceisteanna (173, 174)

Michael McGrath

Ceist:

173. Deputy Michael McGrath asked the Minister for Finance the full year cost of reducing the life assurance exit tax from 41% to 39%; and if he will make a statement on the matter. [34205/17]

Amharc ar fhreagra

Michael McGrath

Ceist:

174. Deputy Michael McGrath asked the Minister for Finance the full year cost of reducing DIRT from 39% to 37%; the cost of reducing the life assurance exit tax from 41% to 37%; and if he will make a statement on the matter. [34206/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 173 and 174 together.

I am informed by Revenue that it is estimated the cost of reducing the Life Assurance Exit Tax rate from 41% to 39% and 37% would be in the order of €11 million and €22 million respectively.

As the Deputy is aware, in Budget 2017 I announced that the rate of DIRT will be decreased by two percentage points each year for the next 4 years until it reaches 33 per cent.  This will cost €9 million in 2017 and an estimated full year cost of €36 million which will incur in 2020.

Tax Reliefs Data

Ceisteanna (175)

Michael McGrath

Ceist:

175. Deputy Michael McGrath asked the Minister for Finance the full year cost of increasing the lifetime limit for CGT entrepreneur relief to €1 million, €5 million, €10 million and €15 million, respectively; and if he will make a statement on the matter. [34207/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

It is assumed that the Deputy is referring to the Revised Entrepreneur Relief provided for in s. 597AA of the Taxes Consolidation Act 1997. I am advised by Revenue that the current lifetime limit applicable to this relief is €1 million in chargeable gains. The cost of increasing this limit to each of the amounts suggested by the Deputy is shown in the following table:

Proposed Lifetime Limit

Full Year Cost €m

€5 million

49

€10 million

54

€15 million

56

Tax Yield

Ceisteanna (176)

Michael McGrath

Ceist:

176. Deputy Michael McGrath asked the Minister for Finance the full year tax yield from equalising the tax on diesel with the tax on petrol; and if he will make a statement on the matter. [34208/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am informed by Revenue that the full year tax yield from equalising the tax on diesel with the tax on petrol is estimated at €337 million assuming no change in behaviour.

Tax Data

Ceisteanna (177, 178, 179, 182)

Michael McGrath

Ceist:

177. Deputy Michael McGrath asked the Minister for Finance the full year cost of increasing the single and widowed marginal tax band to €33,900, €34,900, €35,900, €36,900, €37,900 and €38,900, respectively; and if he will make a statement on the matter. [34209/17]

Amharc ar fhreagra

Michael McGrath

Ceist:

178. Deputy Michael McGrath asked the Minister for Finance the full year cost of increasing the married one income marginal tax band to €42,900, €43,900, €44,900, €45,900, €46,900 and €47,900, respectively; and if he will make a statement on the matter. [34210/17]

Amharc ar fhreagra

Michael McGrath

Ceist:

179. Deputy Michael McGrath asked the Minister for Finance the full year cost of increasing the married two income marginal tax band to €67,800, €68,800, €69,800, €70,800, €71,800 and €72,800, respectively; and if he will make a statement on the matter. [34211/17]

Amharc ar fhreagra

Michael McGrath

Ceist:

182. Deputy Michael McGrath asked the Minister for Finance the full year cost or yield from merging the first band of USC below €12,012 with the second band of USC from €12,012 to €18,772 at a rate 0.5%, 1%, 1.5%, 2% and 2.5% respectively leaving all else equal with USC; and if he will make a statement on the matter. [34214/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 177 to 179, inclusive, and 182 together.

I am advised by Revenue that a Post-Budget 2017 Ready Reckoner is available on the Revenue Statistics webpage at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx.

This Ready Reckoner shows a wide range of detailed information, including the estimated cost or yield to the Exchequer of widening the standard tax rate bands and the cost of reducing the USC rates. While the Ready Reckoner does not show all of the specific costings requested by the Deputy, other changes can be estimated on a pro-rata basis with those displayed in the Reckoner.

The figures provided in the Ready Reckoner 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.

Tax Data

Question No. 182 answered with Question No. 177.

Ceisteanna (180, 181)

Michael McGrath

Ceist:

180. Deputy Michael McGrath asked the Minister for Finance the first year cost of deferring income tax on share based remuneration for employees; and if he will make a statement on the matter. [34212/17]

Amharc ar fhreagra

Michael McGrath

Ceist:

181. Deputy Michael McGrath asked the Minister for Finance the first year cost of deferring income tax on share based remuneration for employees of small and medium-sized enterprises; and if he will make a statement on the matter. [34213/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 180 and 181 together.

I am advised by Revenue that as share based remuneration, in general, is taxed under the PAYE system, it is not possible to separately identify the yield to the Exchequer from such share awards. There is therefore no basis to estimate the cost of deferring income tax on such remuneration for employees.

The Deputy may be interested in the ‘Cost of Tax Expenditures’ table published by the Revenue Commissioners and available at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.

This table provides the cost of a number of share based remuneration incentive schemes from 2004 to 2014. The table will be updated shortly with the 2015 figures.

Similarly, there is no basis to estimate the cost of deferring income tax due on share based remuneration for employees of small and medium sized enterprises (SMEs), generally.  However, as the Deputy will be aware, following a pubic consultation on the tax treatment of share based remuneration conducted in 2016, it was announced in the last Budget that work had commenced on the development of a new, SME-focussed, share-based incentive scheme, to be introduced in Budget 2018.

Work on this new incentive is ongoing. In this regard my officials are engaging with the European Commission to ensure that the incentive complies with EU State Aid rules, and it will be possible to provide an estimated cost for this targeted incentive when the relevant parameters are finalised.

Employee participation in their company’s ownership and profits has been shown to increase competitiveness and support employment and growth. The incentive to be introduced in Budget 2018, is expected to support Irish SMEs in the attraction and retention of key individuals, thereby helping those SMEs in the ongoing development of their businesses.

Question No. 182 answered with Question No. 177.

Travel Insurance

Ceisteanna (183)

Michael McGrath

Ceist:

183. Deputy Michael McGrath asked the Minister for Finance the number of complaints that have been made in each of the past four years in respect of travel insurance products; and if he will make a statement on the matter. [34250/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Department of Finance does not hold information on complaints taken in relation to travel insurance products. However, the Financial Services Ombudsman ("FSO") collects such data and publishes it each year as part of their annual review. The mission statement of the FSO is to “resolve disputes between consumers and financial service providers in a fair, timely and impartial manner and to contribute to enhancing the financial services environment for all consumers”.

According to the Annual Reports of the Financial Services Ombudsman the number of complaints that have been made to the FSO in each year since 2011 in respect of travel insurance are as follows:

Year

No of complaints received by the FSO

2016

137

2015

170

2014

203

2013

234

2012

325

2011

361

The figures show that the number of complaints received each year has been decreasing steadily since 2011.

In addition, according to the official statistics of the Central Statistics Office, there has been no change in the price of travel insurance since May 2016.

Since 2009, the price of travel insurance has remained stable. In May 2009 the index was at 98.8; it is currently at 100.  During the intervening years it has gone up and down, reaching no higher than 107.5.

The FSO annual reports are available on its website at https://www.financialombudsman.ie/publications/

NAMA Operations

Ceisteanna (184)

Michael McGrath

Ceist:

184. Deputy Michael McGrath asked the Minister for Finance the number of credible bidders identified by NAMA in each of the off-market loan sales with a total value of €795 million conducted on foot of the agency receiving legal or commercial advice to do so; the number of such loans conducted for this reason since 2014; and if he will make a statement on the matter. [34251/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I assume that the Deputy is referring to information originally provided in reply to Parliamentary Question 220 of 21 March 2017. In that reply, information was provided in relation to exceptions approved by NAMA over the period 2014-2016 to its policy of open marketing of loans by NAMA and of assets by its debtors and receivers. Therefore, the figure of €795m in the Deputy’s question refers to both asset and loan disposals.

In particular, reference was made to the first category of exceptions to the open marketing policy, that is, cases where specific written advice (either legal or professional) has been obtained by NAMA recommending that open marketing should not be pursued for commercial or legal reasons. The total number of transactions in this category - which includes both loan and asset disposals -  was 126 and the total value was €795m. Given that open marketing was precluded for legal or commercial reasons, the transactions did not involve multiple bidders.

NAMA Operations

Ceisteanna (185)

Michael McGrath

Ceist:

185. Deputy Michael McGrath asked the Minister for Finance if NAMA has completed the process of compiling off-market loan sales carried out between 2010 and 2013; if so, when the records will be made available; and if he will make a statement on the matter. [34252/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I assume that the Deputy is referring to information originally provided in reply to Parliamentary Question 220 of 21 March 2017.  In that reply, information was provided on exceptions approved by NAMA, over the period 2014-2016, to its policy of open marketing of loans by NAMA and of assets by its debtors and receivers.  I assume that the Deputy is now seeking corresponding information for the period from 2010 to 2013.   

As the Deputy will be aware, NAMA does not own property, and its role in relation to property is as a secured lender.  As a result, where properties and assets over which NAMA holds a charge are being sold, the sales process is managed by the property owner or by a receiver.  NAMA does not manage the sales process, but NAMA guidelines require that a property be openly marketed, with the property owner or receiver appointing a sales agent to market the property and ensure that the sale is conducted in an open and transparent manner.  As secured lender, NAMA's approval of the sale is required before its security can be released to complete the sale.

While NAMA normally requires that its debtors and receivers comply with its open marketing policy, that policy was never intended to be applied rigidly and inflexibly.  NAMA is required to act in a commercial manner and open marketing does not necessarily provide the best financial return in all circumstances. For some transactions, exceptions to the open marketing policy may be required for legal or commercial reasons. In such cases, NAMA’s approval is required.

I am advised that the NAMA Board policy provides for four categories of exceptions to its policy of open marketing.

One exceptions category relates to cases where specific written advice (either legal or professional) has been obtained by NAMA recommending that open marketing should not be pursued for commercial or legal reasons.  Included in this category are transactions involving defective security and transactions involving the sale of assets where there were legal impediments to open market sales.  These included cases involving existing ownership agreements and third parties with legal entitlements or pre-emption rights relating to the assets.  Assets are offered at the appraised market value confirmed by way of independent valuation report received by NAMA. Over the period 2010-2013, I am advised by NAMA that 27 transactions valued at €74m fell into this category.

A second exceptions category relates to cases where a government or State entity has approached NAMA to purchase an asset for legitimate reasons in the public interest.  NAMA's Business Plan, which was published in July 2010, stated that NAMA would engage proactively with Government departments, local authorities, State agencies and other appropriate bodies in relation to their possible need for land/properties.  This includes the sale of sites for the provision of primary and secondary schools, properties and sites sold to local authorities and to various Government departments and State agencies and sites identified by IDA Ireland as suitable for Foreign Direct Investment.  Derogations are applied in instances where the purchaser is an existing tenant or where an existing business is looking to expand into an adjoining NAMA-secured property or site.  Such derogations are dependent on achieving the current market value as determined by an independent valuation. Over the period 2010-2013, I am advised by NAMA that 17 transactions valued at €27m fell into this category.

A third exceptions category arises where NAMA, through NARPS, acquires assets for social housing purposes from NAMA debtors or receivers for onward leasing to Approved Housing Bodies (AHBs).  NAMA, through its special purpose vehicle NARPS, purchased properties from its debtors and receivers for onward long-term leasing to local authorities or AHBs.  In addition, AHBs directly purchased residential properties for social housing purposes. Such derogations are dependent on achieving the current market value as determined by independent market valuations. Over the period 2010-2013, I am advised by NAMA that 14 transactions valued at €35m fell into this category.  

A fourth exceptions category relates to cases where the asset is the subject of a compulsory purchase order (CPO) by a State body or local authority. Over the period 2010-2013, I am advised by NAMA that no transactions fell into this category.

Universal Social Charge Data

Ceisteanna (186, 187)

Michael McGrath

Ceist:

186. Deputy Michael McGrath asked the Minister for Finance the number of persons paying the 8% rate of USC in each year since it was introduced; the yield in each year from the 8% rate; the estimated revenue loss from reducing the rate to 5% and 4% respectively; and if he will make a statement on the matter. [34253/17]

Amharc ar fhreagra

Michael McGrath

Ceist:

187. Deputy Michael McGrath asked the Minister for Finance the number of persons paying the 11% rate of USC in each year since it was introduced; the yield in each year from the 11% rate; the estimated revenue loss from reducing the rate to 5% and 4% respectively; and if he will make a statement on the matter. [34254/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 186 and 187 together.

I am advised by the Revenue Commissioners that the number of taxpayers paying USC at each rate is available on the Revenue website at http://www.revenue.ie/en/corporate/documents/statistics/income-distributors/usc-rates.pdf

The 7% rate of USC was increased to 8% for incomes in excess of €70,044 in Budget 2015. The USC yield on such incomes in 2015 was estimated at €989 million. This estimate includes the amount of USC paid at 8% by those who also pay the 3% USC surcharge that applies to the self-employed on the portion of their income over €100,000.

The 3% USC surcharge has been in effect since the introduction of the USC in 2011 and its yield is as follows:

Year

Yield   (Million €)

2011

53

2012

54

2013

51

2014

49

2015

88

In relation to reducing the 8% USC rate to 5%, I am advised by the Revenue Commissioners that the estimated cost on a first year and full year basis is €343m and €440m respectively. The cost on a first year and full year basis of reducing the 8% USC rate to 4% is €457m and €587m respectively.

Following clarification from the Deputy’s office as to the information sought by the Deputy, I am advised by the Revenue Commissioners that the first and full year cost of abolishing the 3% surcharge on self-employed earners is €69m and €123m respectively. The combined effect of the abolition of the 3% surcharge for self-employed earners and the reduction of the 8% USC rate to 5% on a first year and full year basis is €412m and €563m respectively. The combined cost of reducing the 8% USC rate to 4% and abolishing the 3% surcharge on self-employed earners on a first year and full year basis is €526m and €710m respectively.

These estimates have been generated by reference to 2017 incomes as calculated on the basis of actual data for the year 2014, the latest year for which returns are available, adjusted as necessary for income, self-employment and employment trends in the interim. The estimates are provisional and may be revised.

Tracker Mortgages Examination

Ceisteanna (188, 189)

Michael McGrath

Ceist:

188. Deputy Michael McGrath asked the Minister for Finance if all customers incorrectly denied a tracker rate mortgage, including those that were affected prior to 2013, will be compensated by their respective lenders; and if he will make a statement on the matter. [34256/17]

Amharc ar fhreagra

Michael McGrath

Ceist:

189. Deputy Michael McGrath asked the Minister for Finance the estimated compensation and redress bill banks will have to meet to rectify the issue of persons incorrectly removed from their tracker rate; and if he will make a statement on the matter. [34257/17]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 188 and 189 together.

The Central Bank Tracker Mortgage Examination requires lenders, which offered tracker interest rate mortgages to their customers, to review all mortgage accounts from the date when the lender commenced offering tracker interest mortgages until 31 December 2015 in respect of both Private Dwelling Houses and Buy-to-Let properties:

- that originated on tracker interest rates;

- that had tracker interest rates applied at any stage during the term of the underlying mortgage agreements; and/or

- where the underlying mortgage agreements provided for contractual rights to or options for tracker interest rates at any stage during the term of the agreements.

All tracker mortgage accounts that fall within this scope are covered by the Examination.   Where lenders identify impacted customers, they are required to put in place a redress and compensation scheme in accordance with the Framework and Principles for Redress set down by the Central Bank.

The Central Bank Examination is still on-going and final figures on redress and compensation will not be available until it is completed.  However, the Tracker Examination is a priority for the Central Bank and it has set specific timelines for lenders to complete Phase 2 of the Examination, which identifies impacted customers, the last of which will be completed no later than end September 2017.  Lenders are currently at varying stages of the review and some lenders have already commenced redress and compensation payments. As the Deputy is aware, the most recent Central Bank update report on the Examination was published in March 2017 and it indicated that, as at end February 2017, 9,900 impacted customer accounts were identified by lenders. At that date lenders had contacted the majority of these accounts requiring rate rectification. Of the accounts identified as impacted, approximately €78m has been paid out in redress and compensation to approximately 2,600 accounts.

The Central Bank has also advised that a further update will be provided on the Examination in autumn 2017.