Written Answers Nos. 210-233
210. Deputy Eoin Ó Broin asked the Minister for Finance if it is possible under EU VAT rules to apply selectively a reduction on the current rate of VAT to certain categories of house purchases, such as those bought by first-time buyers, houses on sale or sold at a price below a specified affordability level; and if VAT can be refundable or rebatable in the categories specified. [46108/17]
Amharc ar fhreagraThe VAT rating of residential property is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the EU VAT Directive, the VAT Consolidation Act 2010 applies the reduced VAT rate of 13.5% to the supply of new residential property. In general, VAT is chargeable to the purchaser on the sale of all new residential property but the purchase of second-hand residential property is exempt from VAT.
The VAT Directive does not permit the application of different VAT rates to different categories of house purchases such as first time buyers or houses on sale or sold below a specified affordability level. In addition, the VAT Directive does not permit a rebate or refund of VAT charged to a private person who incurs VAT on the purchase of residential property. However, the Deputy will be aware that the Help-to-Buy scheme provides an income tax relief for first-time buyers of 5% of the purchase price of a new house or apartment, or of the valuation of a self-build, up to a maximum of €400,000.
211. Deputy Stephen S. Donnelly asked the Minister for Finance the details of all planning and research work under way on the impact of the result of Brexit negotiations in his Department or related State agencies; if this analysis is intended for publication; the expected completion and publication date respectively of this research, in tabular form; and if he will make a statement on the matter. [46120/17]
Amharc ar fhreagraAs Minister for Foreign Affairs and Trade with special responsibility for Brexit, Minister Coveney has responsibility for coordinating the whole-of-Government response to Brexit. In this capacity, he is working closely with colleagues across Government to address the many challenges resulting from Brexit. This co-operation also involves the relevant State Agencies.
Work at Cabinet level is being prepared through cross-Departmental coordination structures. These represent a frequent and active channel through which all relevant Departments are providing their research, analysis and overall policy input to the Government’s wider response to Brexit, including its priorities for the ongoing Article 50 negotiations between the EU and the UK.
As the outcome of the negotiations is not yet known, an important focus of the planning and preparation being undertaken through these structures is on deepening the Government’s analysis and understanding of the exact consequences of a range of different possible scenarios. This represents an intensification of efforts to build on the Government‘s contingency planning.
The Department of Finance has been preparing for the impact of Brexit since well before the referendum on 23 June 2016, with this work now intensified. The regular updates of the Department's Macro-Economic forecasts take account of the impact of Brexit. In addition, the Department has been to the fore in producing and funding a number of Brexit-related studies, both before and since the UK's referendum decision, including:
- 'Scoping the Possible Economic Implications of Brexit on Ireland' – Scoping study of scenarios for the future relationship between the UK and the EU. Published under the Department of Finance-ESRI research programme in November 2015;
- ‘An Exposure Analysis of Sectors of the Irish Economy’. An in-depth analysis of the possible sectoral and regional impacts of Brexit arising from Ireland's trade relationship with the UK, published by Department of Finance in October 2016 (Updated March 2017);
- 'Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland' - Published under the Department of Finance-ESRI research programme in November 2016;
- ‘Trade Exposures of Sectors of the Irish Economy in a European Context’ – An analysis of trade exposure to the UK in comparison to other EU Member States, published by Department of Finance in September 2017.
The Department will continue to monitor the economic impact of Brexit, to carry out and publish relevant analysis and to frame policy advice in the context of Brexit.
Like all Government agencies, the Revenue Commissioners are also actively engaged in examining a range of scenarios in order to support Ireland's objectives. This also includes supporting relevant research, including:
- ‘Ireland's International Trade and Transport Connections’ - An ESRI study co-sponsored by the Department of Finance and the Revenue Commissioners which looks at the transport patterns of Irish international trade, examining in particular how trade flows in weight differ from those measured by value, and the implications that this has for transport mode and cost. Published in October 2017;
- “Ireland and the UK – Tax and Customs Links” - The paper examines the links between Ireland and the UK that may impact on tax and customs matters. Two primary topics are examined – flows between the two jurisdictions that may carry customs implications and the links of Irish based businesses to the UK and their tax contributions to the Irish Exchequer. The paper was published by Revenue Commissions in October 2017.
212. Deputy Gerry Adams asked the Minister for Finance if his attention has been drawn to difficulties reported by persons in Dundalk accessing local Revenue Commissioners offices since the introduction of the appointment service from 17 July 2017; his plans to evaluate the way in which this service is working; and if there are plans to include a walk-in service to these offices at a future date. [46160/17]
Amharc ar fhreagraThe Deputy will be aware that the position as regards the Revenue Dundalk office has been addressed in a number of recent Parliamentary Questions.
I am advised by Revenue that there are no plans to re-introduce a “walk-in” service at the Dundalk office. Revenue has recently expanded its outreach programme to include a monthly information session in the Citizens Information Office, Long Walk, Dundalk. This service is, since 3 November, available on the first Friday of every month.
As with all services provided by Revenue, the appointments and outreach services are monitored and reviewed on an ongoing basis. Revenue is not aware of any difficulties encountered by taxpayers in accessing its services since the appointments facility was introduced but if the Deputy provides details of any particular difficulties that he may be aware of, Revenue will contact the customers concerned and resolve their issues without delay.
215. Deputy Joan Collins asked the Minister for Finance the annual tax revenue collected, and the tax refunds relating to electronic relevant contracts tax, within the construction sector between the years 2014 and 2016, in tabular form. [46218/17]
Amharc ar fhreagraI am advised by Revenue that the amounts received, offset and refunded in relation to RCT are set out in the table. I am further advised by Revenue that RCT payments relate to a number of different industries and it is not possible to separately identify RCT payments which relate only to the construction sector. However, construction accounts for the bulk of these activities.
|
Tax Year |
Tax collected under the RCT System |
Amount of tax collected under the RCT system that was offset against tax liabilities |
Amount of tax collected under the RCT system that was refunded |
Amount of tax collected under the RCT system that has not yet been offset or refunded |
|
2014 |
€200.8m |
€121.2m |
€48.6m |
€31.0m |
|
2015 |
€200.6m |
€126.6m |
€61.5m |
€12.5m |
|
2016 |
€255.5m |
€161m |
€54.6m |
€39.9m |
216. Deputy Michael McGrath asked the Minister for Finance his views on whether the break in the link between the exit tax and DIRT on savings products could result in a reduced intake between the two taxes overall; and if he will make a statement on the matter. [46222/17]
Amharc ar fhreagra217. Deputy Michael McGrath asked the Minister for Finance his plans to promote optimal tax collection as it relates to the exit tax and DIRT (details supplied); and if he will make a statement on the matter. [46223/17]
Amharc ar fhreagra218. Deputy Michael McGrath asked the Minister for Finance if the potential for a reduction in the exit tax in line with DIRT to result in higher net Exchequer returns over the long term as a result of more customers opting for investments over deposits with very low interest rates has been considered; and if he will make a statement on the matter. [46224/17]
Amharc ar fhreagraI propose to take Questions Nos. 216 to 218, inclusive, together.
When the then Minister for Finance announced in last year’s Finance Bill that he was reducing the rate of DIRT by 2% each year until it reaches 33% in 2020, he identified the cost of that measure as €9m for a full year, or €36m by 2020 (Revenue have subsequently revised the annual cost of a 2% reduction in the rate of DIRT down to €6.4 million). He explained that the cost of moving the other taxes which tended to move in line with the rate of DIRT had been tentatively estimated by Revenue as €14m per annum or €56m by 2020. Such costing estimates are based on the assumption of no behavioural change as it is not possible to estimate changes in behaviour.
The then Minister also agreed during the Report Stage of Finance Bill 2016 that the 2017 Tax Strategy Group (TSG) would examine this issue. This was done, and the report to the TSG containing this examination can be found at:
http://www.finance.gov.ie/wp-content/uploads/2017/07/TSG-17-11-Capital-and-Savings-Taxes-Final-PL.pdf.
Finally, I should also say that it is not possible to accurately estimate the changes in investment behaviour or any estimation of yield from individuals opting for investment products over deposit accounts if there was a change in the rate of exit tax as decisions to invest in specific financial products are driven by a range of factors and not only taxation.
219. Deputy Willie Penrose asked the Minister for Finance if his attention has been drawn to the impact of the application of section 87B of the Taxes Consolidation Act 1997, as amended by section 18 of the Finance Act 2013, regarding debt release of land dealing and development (details supplied); if the legislation can now be amended to deal with this anomalous situation; and if he will make a statement on the matter. [46351/17]
Amharc ar fhreagraI am informed by Revenue that section 87B of the Taxes Consolidation Act 1997 (TCA) provides that gains arising from the release of loans, used to purchase land or property held as trading stock by individuals, are to be treated as the receipt of trading income and taxed accordingly. The amount of the debt released is to be treated as a receipt of the trade in the tax year in which the release is effected.
The purpose of the section is to ensure that individual land dealers/developers do not obtain the benefit of losses for tax purposes where no economic loss was incurred. Section 87B treats the amount of the loan written down as a trading receipt effectively clawing back any tax deduction that they may have received from a write down in the taxpayers books e.g. if land was acquired for €10m and the market value fell to €1m, the value of the closing stock of the land in the accounts of the developer would be €1m. The developer would have incurred a loss of €9m. However, where the acquisition was funded by borrowings and a debt of €9m was released by the lender, no economic loss was suffered by the developer. If the release of the debt was not treated as a trading receipt, a loss of €9m would be available for offset against other income even though no economic loss was actually incurred.
The legislation provides that, in a case involving a discharge from bankruptcy, or a discharge from debt under the Personal Insolvency Act 2012, the release of the debt is treated as having been effected on the date of discharge. Revenue has also confirmed that, in the case of bankruptcy, it will accept the date of final distribution as being the date of release where this falls after the date of discharge. As regards the date of release, it should be noted that the first occasion on which the amount of debt to be released can be fully quantified is the date of discharge or the date of the final distribution to creditors, if later than the date of discharge. It is only when amounts have been fully distributed to the creditors, that it is possible to know how much debt has been released and accordingly how much income is deemed to be received under section 87B TCA.
It should also be noted that in many instances no additional income tax liability should arise as a result of the application of section 87B TCA. A corresponding write-down in the cost of the trading stock should be available as a tax deduction where there is a debt release and therefore any taxable receipt arising as a result of the write down should be matched by the corresponding write down of the trading stock. If the taxpayer has previously written down his/her trading stock and has losses carried forward under section 382 TCA, this trading loss should be available to offset against the s87B income tax charge. It is only in those circumstances where taxpayers have already written down trading stock, taken the tax deduction and used the losses to shield other income from tax that any net charge to income tax can arise.
220. Deputy Michael Healy-Rae asked the Minister for Finance his views on whether legislation should be introduced to stop repossession proceedings on tracker-related mortgages until all affected customers are redressed (details supplied); and if he will make a statement on the matter. [46357/17]
Amharc ar fhreagraAs the Deputy is aware, the Central Bank is independent in the performance of its duties in the supervision of regulated financial service providers and it is working to ensure the Tracker Mortgage Examination is completed as soon as possible. The Government fully supports the Central Bank in the performance of its duties and has asked the Central Bank to provide a progress report on the examination in December based on the timelines the Bank has set for each lender.
In addition, as Minister for Finance I have mandated the Central Bank under section 6A of the Central Bank Act 1942 to prepare a report on the following:
- the current culture and behaviour and the associated risks in the retail banks, and
- the actions that may be taken to ensure that banks prioritise customer interests in the future.
On receipt of this report, the Government will determine whether any additional legislative and regulatory changes are needed that would enhance accountability in the banks to ensure customer interests are prioritised.
It should also be noted that in line with the Central Bank’s mandate to ensure that the best interests of consumers are protected, the immediate focus of the Tracker Mortgage Examination is to ensure that lenders prioritise the identification of impacted customers, stop the harm, and then provide appropriate redress and compensation in line with the ‘Principles for Redress’ developed by the Central Bank.
The lender is to take appropriate steps to ensure that any harm potentially being caused to impacted customers is stopped at the earliest possible time after a potential relevant issue is identified, as follows:
1. The lender is to cease charging the incorrect rates of interest to potentially impacted cohorts of customer accounts and to apply correct rates of interest to those accounts after each cohort is identified and to inform the Central Bank in advance of doing so.
2. The Central Bank expects that lenders will not take steps in the legal process (including issuing demand letters) and will implement controls and/or measures to ensure that potentially impacted customers do not lose possession of their properties during the period from when the potential relevant issue is identified until the lender satisfies itself that potentially impacted accounts are not in fact impacted by the issue or redress and compensation occurs. Such controls and measures may include, but are not limited to, pausing legal activity and repossessions of properties and informing customers that wish to undertake assisted voluntary surrenders of their properties, of the possibility that they may be included in a redress scheme in the future.
3. Where the lender is satisfied that a potentially impacted account is not impacted by the potential relevant issue or any other relevant issue, it may cease to apply the said controls and measures to the account. The lender is to put appropriate systems in place regarding decisions to cease to apply such controls and measures. As part of this process, senior management is to approve any decision to cease to apply the controls and measures to an account in advance of the controls and measures being dis-applied.
4. Before the lender takes any steps against customers that it has not previously identified as being affected by the potential relevant issue that may result in such customers losing possession of their properties (for example by commencing or advancing legal proceedings to take possession of the properties), or before the lender facilitates such customers in the sale of their properties (for example by way of assisted voluntary sale), the lender is to satisfy itself that such customers are not affected by the potential relevant issue or any other relevant issue.
5. The lender to put appropriate systems in place regarding the process by which it satisfies itself in this regard. As part of the process, senior management need to be satisfied that such customers are not affected by the potential relevant issue or any other relevant issue.
Where there is doubt regarding whether or not the potentially impacted customers are in fact impacted by potentially relevant issues or any other issues, lenders should not take steps in the legal process (including issuing demand letters) until lenders are satisfied that it is fully in order to proceed.
221. Deputy David Cullinane asked the Minister for Finance the contracts his Department or bodies under the aegis of his Department have with a company (details supplied) or its subsidiaries; the value of the contracts; the year in which the contracts were concluded; when the contracts will be up for renewal; and if he will make a statement on the matter. [46373/17]
Amharc ar fhreagraI can inform the Deputy that my Department does not currently have any contracts with a company named 'Capita'.
In relation to the eighteen Bodies under the Aegis of my Department, I am informed that three have contracts with companies named CAPITA.
The National Asset Management Agency has two ongoing contracts with Capita Asset Service (Ireland) Ltd relating to loan administration. The National Treasury Management Agency has entered into six contracts with Capita IB Solutions (Ireland) Ltd relating to software and ancillary services, four of which are ongoing. The Financial Services Ombudsman Bureau has entered into one contract with Capita Business Services relating to internal auditing services.
Please see the table for further information. The Deputy should note that the year in which the contracts were concluded are the dates when the contract was signed.
|
Body under the aegis of Department |
Name of Company |
Value of Contracts |
Year Contracts were concluded |
When ongoing Contracts will be up for renewal |
|
National Asset Management Agency |
Capita Asset Service (Ireland) Limited |
(a) Master Servicer €17.2m* (b) Primary Servicer €66m* |
(a) 2010 (b) 2013 |
(a) 2020 (b) 2018 |
|
National Treasury Management Agency** |
Capita IB Solutions (Ireland) Ltd |
(a) Integra Staff Expenses system - Managed Service €12,800 (b) Integra Staff Expenses system - Software Supply and Installation €64,400 (c) Integra Staff Expenses system - Software Support €5,506 (d) P2P system - Managed Service €12,000 (e) P2P system - Software Support €6,340 (f) P2P system - Software Supply and Installation €104,100 |
(a) 2015 (b) 2014 (c) 2015 (d) 2014 (e) 2014 (f) 2013 |
(a) 2020 with NTMA option to extend for 1 year (b) This contract has been completed (c) 2020 with NTMA option to extend for 1 year (d) 2017 with NTMA option to extend for 2 years (1st year extension in place) (e) 2017 with NTMA option to extend for 2 years (1st year extension in place) (f) This contract has been completed |
|
Financial Services Ombudsman Bureau |
Capita |
Internal Audit Services €76,578.00 |
2014 |
2017 |
*Actual cumulative payments to YE2016; future payments will depend on level of activity and annual fees will decline as NAMA’s portfolio reduces.
** The NTMA assigns staff to the National Asset Management Agency (NAMA) and the Strategic Banking Corporation of Ireland (SBCI), and also provides them with business and support services and systems. NAMA and the SBCI are recharged a portion of the NTMA fees where appropriate.
I have been advised that all of the aforementioned contracts were procured in line with national and European Union procurement guidelines.
222. Deputy Catherine Martin asked the Minister for Finance his plans to amend the conditions of the home renovation scheme to make it available to apartment owners, especially those carrying out repair work to remedy defective construction in their buildings; and if he will make a statement on the matter. [46397/17]
Amharc ar fhreagraThe Home Renovation Incentive (HRI) provides a tax relief by way of an income tax credit on repair, renovation or improvement works on principal private residences and rental properties by tax compliant contractors. HRI came into operation on 25 October 2013, with rental properties being brought within it from 15 October 2014. The scheme is due to end on 31 December 2018.
Subject to compliance with the terms of the incentive, works to repair, renovate, or undertake improvement works to apartments, either owner occupied or rented, would appear to qualify for HRI. However, in the absence of specific details as to the particular circumstances involved, it is not possible to provide a definitive response to the Deputy’s question. I am advised by the Revenue Commissioners that if the Deputy wishes to provide more specific details of a particular property to them in relation to eligibility for HRI, they will arrange to have the matter looked into.
223. Deputy Catherine Martin asked the Minister for Finance his plans to introduce relief from local property tax for house and apartment owners dealing with the consequences of defective construction; and if he will make a statement on the matter. [46398/17]
Amharc ar fhreagraLPT operates on a self-assessment basis and it is a matter for the property owner in the first instance to calculate the tax due based on his or her assessment of the market value of the property. When making an assessment, issues such as defective construction would be one of the factors that a property owner should take into account in valuing their property.
The LPT legislation provides for an exemption from LPT for properties with 'significant pyritic damage'. The qualifying criteria in respect of this exemption were modified by the Finance (Local Property Tax) (Amendment) Act 2015. Details of the qualifying criteria are available on the Revenue website at https://www.revenue.ie/en/property/local-property-tax/exemptions/properties-certified-as-having-pyritic-damage.aspx
I have no plans for further reliefs and exemptions from LPT.
224. Deputy Pearse Doherty asked the Minister for Finance the number of court cases being taken against State-owned banks and other banks by persons appealing the compensation or redress they have been offered under the tracker examination process; and if he will make a statement on the matter. [46406/17]
Amharc ar fhreagra227. Deputy Thomas P. Broughan asked the Minister for Finance if mortgages affected by the tracker scandal have been sold on to vulture funds; if so, the number of such mortgages that were and are owned by vulture funds; the redress that will be made available to persons affected; and if he will make a statement on the matter. [46411/17]
Amharc ar fhreagra253. Deputy Michael McGrath asked the Minister for Finance the number of persons that fell into arrears on their mortgages as a result of being wrongly denied a tracker mortgage rate or as a result of being on a less favourable tracker rate, by each of the 15 lenders included in the Central Bank's examination of tacker mortgage-related issues, or the aggregate data if details are not available; and if he will make a statement on the matter. [46998/17]
Amharc ar fhreagraI propose to take Questions Nos. 224, 227 and 253 together.
The Tracker Mortgage Examination is the largest, most complex and significant supervisory review that the Central Bank has undertaken to date in the context of its consumer protection mandate, involving a review of more than two million mortgage accounts by lenders.
As per the most recent Central Bank’s status update of 17 October on the tracker mortgage examination (https://www.centralbank.ie/news/article/statement---tracker-mortgage-examination), circa 13,000 affected customers have been identified to date through the Examination, the majority of whom will receive their redress and compensation before the end of the year. Prior to the Examination, the Central Bank ensured a further 7,100 cases involving tracker mortgage issues were rectified and remedied.
The Central Bank also publishes data on the number of PDH and BTL mortgages, and on the arrears position of those mortgages (see latest data attached https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears/residential-mortgage-arrears-and-repossessions-statistics-june-2017.pdf?sfvrsn=7). This data series also provides information on the mortgages which are held by unregulated loan owners. However, the Central Bank advises that as the Tracker Examination is ongoing it is not in a position to provide granular data on the on the number of impacted tracker mortgage accounts in arrears or which have been transferred to unregulated loan owners.
However, it should be noted that the Tracker Framework requires lenders to review all mortgage accounts, including those that have been redeemed, sold or transferred to another entity by the lender, together with mortgage accounts where the customer has lost possession of the secured property for any reason (including by way of voluntary and involuntary sale). In the case of any loans that have been transferred or sold to another entity the Central Bank has taken the approach that the originator of those loans is responsible for their review and the payment of any redress and compensation required as set out by the Framework. The Framework also requires lenders to implement controls and/or measures to ensure that potentially impacted customers do not lose possession of their properties during the period from when the potential relevant issue is identified until the lender satisfies itself that potentially impacted accounts are not in fact impacted by the issue or redress and compensation occurs. Such controls and measures may include, but are not limited to, pausing legal activity and repossessions of properties and informing customers that wish to undertake assisted voluntary surrenders of their properties, of the possibility that they may be included in a redress scheme in the future.
Regarding the number of Court cases initiated against banks arising from the tracker issue, the Central Bank advises that it does not have data on this legal matter. However, it should also be noted that the Tracker Framework provides that redress and compensation is to be paid to impacted customers up front at the point of offer and compensation cannot be reduced by virtue of a customer lodging an appeal.
225. Deputy Pearse Doherty asked the Minister for Finance the action that will be taken against banks that have appointed receivers to properties that have been part of the tracker examination since the beginning of the examination; and if he will make a statement on the matter. [46407/17]
Amharc ar fhreagraAs the Deputy is aware, the Central Bank is independent in the performance of its duties in the supervision of regulated financial service providers and it is working to ensure the Tracker Mortgage Examination is completed as soon as possible. The Central Bank has advised that in line with its mandate to ensure that the best interests of consumers are protected, the immediate focus of the Tracker Mortgage Examination is to ensure that lenders prioritise the identification of impacted customers, stop the harm, and then provide appropriate redress and compensation in line with the ‘Principles for Redress’ developed by the Central Bank.
The lender is to take appropriate steps to ensure that any harm potentially being caused to impacted customers is stopped at the earliest possible time after a potential relevant issue is identified, as follows:
- The lender is to cease charging the incorrect rates of interest to potentially impacted cohorts of customer accounts and to apply correct rates of interest to those accounts after each cohort is identified and to inform the Central Bank in advance of doing so.
- The Central Bank expects that lenders will not take steps in the legal process (including issuing demand letters) and will implement controls and/or measures to ensure that potentially impacted customers do not lose possession of their properties during the period from when the potential relevant issue is identified until the lender satisfies itself that potentially impacted accounts are not in fact impacted by the issue or redress and compensation occurs. Such controls and measures may include, but are not limited to, pausing legal activity and repossessions of properties and informing customers that wish to undertake assisted voluntary surrenders of their properties, of the possibility that they may be included in a redress scheme in the future.
- Where the lender is satisfied that a potentially impacted account is not impacted by the potential relevant issue or any other relevant issue, it may cease to apply the said controls and measures to the account. The lender is to put appropriate systems in place regarding decisions to cease to apply such controls and measures. As part of this process, senior management is to approve any decision to cease to apply the controls and measures to an account in advance of the controls and measures being dis-applied.
- Before the lender takes any steps against customers that it has not previously identified as being affected by the potential relevant issue that may result in such customers losing possession of their properties (for example by commencing or advancing legal proceedings to take possession of the properties), or before the lender facilitates such customers in the sale of their properties (for example by way of assisted voluntary sale), the lender is to satisfy itself that such customers are not affected by the potential relevant issue or any other relevant issue. The lender is to put appropriate systems in place regarding the process by which it satisfies itself in this regard. As part of the process, senior management is to be satisfied that such customers are not affected by the potential relevant issue or any other relevant issue.
Where there is doubt regarding whether or not the potentially impacted customers are in fact impacted by potentially relevant issues or any other issues, lenders should not take steps in the legal process (including issuing demand letters) until lenders are satisfied that it is fully in order to proceed.
226. Deputy Pearse Doherty asked the Minister for Finance if a move has been signalled by the EU Commission to use Article 48 of the Lisbon Treaty to move some taxation matters from unanimity to qualified majority voting at EU Council level; his plans to challenge such a move; and if he will make a statement on the matter. [46408/17]
Amharc ar fhreagraWhile I note the recent comments by Commission President Juncker, no formal proposal has been put forward for a change in the way tax policy decisions are taken at EU level.
Article 48(7) of the Lisbon Treaty provides a mechanism for the European Council to empower Council to act by Qualified Majority in certain areas, such as taxation, where unanimity is normally required. However the use of this mechanism requires a unanimous decision at European Council and the consent of the European Parliament. I have been quite clear that Ireland would not support any proposal that undermines the requirement that unanimity is needed for any tax legislation to be agreed at EU level.
In addition, Article 48(7) provides that any individual national Parliament can the block the use of this mechanism by the European Council.
228. Deputy Michael McGrath asked the Minister for Finance the estimated or actual existing principal dwelling home mortgages by fixed rate, tracker rate and variable, managed variable or loan to value variable rate; and if he will make a statement on the matter. [46424/17]
Amharc ar fhreagraThe Central Bank has advised that Table A.18.1 from “Private Household Credit and Deposits” statistical series presents loans advanced to Irish resident private households for the purpose of house purchase by within-the-State offices of credit institutions. These loans are further disaggregated by the type of interest rate fixation and primary use of the property for which the loan was drawn-down. Table A.18.2 presents the outstanding amount of loans advanced to Irish resident private households for the purpose of house purchase by within-the-State offices of credit institutions that have been de-recognised from the balance sheet as loans through securitisation or other transfers but continue to be serviced by the originating credit institution. These loans are further disaggregated by the type of interest rate fixation and primary use of the property for which the loan was drawn-down.
Based on the latest quarterly release: https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/private-household-credit-and-deposits, it can be seen that as at June 2017 for principal dwellings;
- SVR (including up to 1 year fixed) represented €36.510 billion or 42.70 per cent of outstanding values
- Tracker represented €36.71 billion or 42.93 per cent of outstanding values
- Fixed rates of over 1 year maturity represented €12.283 billion or 14.37 per cent of outstanding values.
For Buy-to-let purposes:
- SVR (including up to 1 year fixed) represented €5.665 billion or 30.59 per cent of outstanding values
- Tracker represented €12.63 billion or 68.20 per cent of outstanding values
- Fixed rates of over 1 year maturity represented €0.224 billion or 1.21 per cent of outstanding values.
For Holiday homes/second homes:
- SVR (including up to 1 year fixed) represented €0.273 billion or 33.41 per cent of outstanding values
- Tracker represented €0.509 billion or 62.30 per cent of outstanding values
- Fixed rates of over 1 year maturity represented €0.035 billion or 4.28 per cent of outstanding values.
229. Deputy Catherine Martin asked the Minister for Finance if an interdepartmental committee is still in operation examining the possibility of taxing civil servants' car parking as a benefit in kind; the length of time it has been in existence; when it last met; the outcomes that have resulted; his plans to introduce such a scheme; and the estimated amount of revenue that could be realised by such a measure. [46445/17]
Amharc ar fhreagraI am informed by Revenue that employer-provided parking is not currently subject to benefit-in-kind taxation. I do not currently have any plans to change this. My officials are unaware of a committee such as the Deputy describes.
230. Deputy Pearse Doherty asked the Minister for Finance the names of the special advisers employed in his Department; the names of special advisers to Ministers of State in his Department; the annual salary of each adviser; if these persons were special advisers immediately prior to taking up their current role or immediately prior to the June 2017 Cabinet reshuffle; if so, the Minister to whom they were appointed; the date each special adviser was appointed, with effect as stated in the Government order; the date of the Government order; if they received a salary for the period before the appointment order was signed in the case of special advisers whose appointment order date has an effect date earlier than the order date; if so, by whom they were paid; if a special adviser during a period later backdated by appointment order had access to confidential material and-or Cabinet papers; if they were subject to the Official Secrets Act 1963 during this period; if any persons currently employed as special advisers have not yet been appointed by order since the Cabinet reshuffle of 2017; and if he will make a statement on the matter. [46468/17]
Amharc ar fhreagraI wish to inform the Deputy that I have two Special Advisers who are on the Department of Public Expenditure and Reform's payroll. Both Special Advisers are compensated on the third point of the Principal Officer PPC Scale at a rate of €88,392. The Department of Finance and the Department of Public Expenditure and Reform will share the cost of these salaries.
Ms Deborah Sweeney was appointed as Special Adviser to the Minister for Public Expenditure and Reform on 6 September 2017 with effect from 15 June 2017, in accordance with SI Ref No. 399 of 2017.
Mr Stephen Lynam was appointed as Special Adviser to the Minister for Public Expenditure and Reform on 6 September 2017 with effect from 15 June 2017, also in accordance with SI Ref. No 399 of 2017.
The Government Order S180/20/10/0314K approving their re-appointment is dated 6 September 2017 and covered the period from 15 June 2017. Both Special Advisors are subject to the Official Secrets Act, 1963.
Both Ms Sweeney and Mr Lynam were Special Advisers to the Minister for Public Expenditure and Reform immediately prior to their re-appointment. The appointments were made in line with “Instructions to Personnel Officers - Ministerial Appointments for the 32nd Dáil” which include “Guidelines on staffing of Ministerial offices” issued by the Department of Public Expenditure and Reform.
The Department of Finance is currently preparing the Order to appoint Ms Sweeney and Mr Lynam as Special Advisers to me as Minister for Finance.
Minister of State D'Arcy does not currently have a Special Adviser appointed.
231. Deputy Pearse Doherty asked the Minister for Finance the projections or forecasts his Department has made with regard to the impact of winding down of quantitative easing by the ECB; and if he will make a statement on the matter. [46488/17]
Amharc ar fhreagraThe European Central Bank (ECB) announced on October 26th the extension of its QE programme from December 2017 until September 2018 at the earliest, while at the same time announcing a reduction in the rate of monthly purchases from January 2018 to €30 billion, from €60 billion at present. The reinvestment of principal payments on maturing securities purchased under the programme will continue for "an extended period of time" after the end of net asset purchases, meaning the ECB will remain in the secondary sovereign bond market beyond September 2018.
Economic evidence generally points to QE as having had positive effects on the European economy, contributing to lowering sovereign debt yields and providing a small boost to bank lending, investment, real GDP, headline inflation, and medium-term inflationary expectations. The Irish economy has benefitted in particular via a reduction in sovereign borrowing costs, additional liquidity in the banking sector, and an improvement in economic activity in key export markets. The extension of the programme to September 2018 is expected to continue to contribute to these effects, supporting overall economic growth and inflationary expectations.
In my view, the ECB's decision to downsize the scale of its QE purchases, whilst also leaving open the possibility of an extension beyond the new end date, is a measured response that balances favourable short-run economic data flow and a generally positive outlook, against possible market disruption that may occur in the event of an abrupt wind-down. Downsizing is based on a view that the euro area economy no longer needs the same level of monetary stimulus, a view that is supported by recent outturns in the euro area which showed a solid growth rate of 0.6 percent quarter-on-quarter in Q3 2017, or 2.5 percent year-on-year. As such, any negative impacts of winding down are expected to be limited. My Department will continue to monitor developments, including with respect to growth and inflation in the euro area, and advise accordingly.
The extraordinarily accommodative monetary policy adopted by the ECB, and the associated decline in sovereign borrowing costs, clearly cannot last indefinitely. This heightens the need to implement prudent fiscal policies to keep sovereign borrowing costs low. In this regard, I would point out that while our debt-to-GDP ratio will continue falling in the coming years (on the basis of my Department's forecasts), this is solely due to rising GDP; in purely money terms, we will continue to increase public debt next year and in 2019. In these circumstances, it is crucial that prudent budgetary policies are implemented in order to minimise debt interest payments.
232. Deputy Michael McGrath asked the Minister for Finance if there are applications with the Central Bank for a banking licence for retail banking services; if so, the number of applications with the Central Bank; the amount of time it takes to receive a banking licence from the initial application; and if he will make a statement on the matter. [46537/17]
Amharc ar fhreagraThe Central Bank utilises a three-stage banking authorisation assessment process, the first two stages being part of a pre-application assessment, followed by submission of a formal application. It should be noted that it is the European Central Bank which determines whether a banking authorisation should be granted under section 9 of the Central Bank Act, 1971 (general banking authorisations). The Central Bank is the competent authority for Third Country Branches (a credit institution whose head office is located in a state or territory other than an EEA state and which holds an authorisation to carry on banking business in that state or territory from the authority that exercises in that state or territory functions corresponding to those of the Central Bank).
I am informed by the Central Bank that, at present, there are no applications for a banking license for retail banking services.
233. Deputy Kevin O'Keeffe asked the Minister for Finance if he will allocate additional staff to clear the backlog of applications received under the employment and investment incentive, EIIS, scheme in view of the deadline for investors; if he will extend the deadline for same to the end of January 2018; and if his attention has been drawn to the fact that applications received in July 2017 are only now being processed. [46566/17]
Amharc ar fhreagra242. Deputy Kevin O'Keeffe asked the Minister for Finance if additional staff will be allocated to clear the backlog of applications received under the employment and investment incentive scheme in view of the deadline for investors; if he will extend the deadline for same; and if his attention has been drawn to the fact that applications received in July 2017 are only now being processed. [46774/17]
Amharc ar fhreagraI propose to take Questions Nos. 233 and 242 together.
I am aware of the current position regarding the delays in processing Employment and Investment Incentive (EII) applications. Revenue has informed me that due to an increase in both the volume of the correspondence received and complexity of the issues involved in relation to applications for relief under EII, there has been an unavoidable increase in the time taken to respond to that correspondence.
Relief for investments under EII arises at the time that shares are subscribed for, meaning that applications for relief are made to Revenue after the date on which the shares are issued. As such, the backlog of applications does not prevent investors from making investments in respect of which relief can be claimed. Revenue, as an administrative measure, provides outline approval in advance of share issues to give a level of comfort to potential investors. It is not necessary to obtain outline approval in advance of share issues.
I am further advised by Revenue that a claim for relief is made by the individual when filing their annual tax return, which this year was due on 31 October 2017 for paper filers and 16 November 2017 for ROS filers. Where individuals invest directly in a company, the claim for relief must be made in respect of the year of assessment in which the investment is made. That claim may generally be made at any time up to two years after the investment. Under the pay and file system, preliminary tax for the 2017 year of assessment is due along with any final tax liability due in respect of the 2016 year of assessment. I am advised by Revenue that, in accordance with section 959AO(4)(c), when calculating the amount of preliminary tax due based on the prior year’s tax liability relief for EII investments should not be included. Therefore, currently there is no approaching deadline for investors.
The backlog in processing ‘EII Outline’ applications is 3 months, while the backlog on actual EII claims is about 2 months. Procedures have been put in place to reduce these backlogs, and additional resources have been assigned to process the backlog.
