Written Answers Nos. 56-67
56. Deputy Martin Heydon asked the Minister for Finance if he will review the tax relief scheme for long-term leases of agricultural land as it relates to inter-family leases in order to consider if the allowance can be extended to inter family leases that were in place prior to the introduction of the tax relief scheme such as in a case (details supplied); and if he will make a statement on the matter. [47533/17]
Amharc ar fhreagraI am advised by Revenue that section 664 of the Taxes Consolidation Act 1997 provides relief from income tax for certain income from long-term leasing of agricultural land. The relief is available, subject to a maximum limit, where farm land is leased to a qualifying lessee for a period of 5 years or more. In order to qualify as a qualifying lessee for the purpose of the relief, the lessee must not be connected with the lessor, or with any of the lessors if there is more than one. The rules for establishing whether or not persons are connected are laid down by section 10 of the Taxes Consolidation Act 1997. Effectively, this means that a lessor is not entitled to relief where the land is let to family members or family members of their spouse or civil partner.
The policy behind this restriction is one of anti-avoidance, due to concerns that some may misuse the exemption. In addition, it was felt that allowing the tax exemption in cases where the land was leased to “connected persons” may delay succession or lead to the fragmentation of holdings. In an effort to avoid the misuse of the exemption and unintended consequences, it was decided to limit the eligibility of the tax exemption. The connected party restriction has applied since the introduction of the relief over 30 years ago.
While I understand there are cases caught by this restriction which are not seeking to abuse the scheme, the incentive was structured to take on board the usual anti-avoidance measures seen in much of the tax system. Without this provision the relief would be potentially open to abuse, e.g. the passing back to the lessee of rent on which tax relief had been claimed. This would not arise on arm’s length transactions.
It should be noted that there are already reliefs from stamp duty and capital acquisitions tax available in the case of permanent transfers of land between family members, such as by gift or sale. In Finance Act 2015 succession farm partnerships were introduced to assist succession planning and the transfer of farms between family members.
57. Deputy Niamh Smyth asked the Minister for Finance the timeframe and nature of changes to section 481; and if he will make a statement on the matter. [47547/17]
Amharc ar fhreagraSection 481 of the Taxes Consolidation Act 1997 provides relief in the form of a corporation tax credit related to the cost of production of certain films. The credit is granted at a rate of 32% of the lowest of:
(i) eligible expenditure;
(ii) 80% of the total cost of production of the film;
(iii) €70,000,000.
* The minimum amount that must be spent on the production is €250,000 and the minimum eligible expenditure amount to qualify is €125,000.
As a tax expenditure of the Taxes Consolidation Act 1997, Section 481 is subject to the requirements of the Department of Finance tax expenditure guidelines.
As a requirement under the guidelines, reliefs such as section 481 are required to be reviewed periodically. A full ex post analysis and review of section 481 will be undertaken in line with the tax expenditure guidelines prior to any announcement on the extension of the relief.
This review will be done in advance of any extension of the relief beyond 2020.
58. Deputy Michael McGrath asked the Minister for Finance the number of mortgage accounts identified in each bank as part of the tracker mortgage examination that involve both current or former employees of that bank; the number that have been restored to the correct rate and that have received redress and compensation, in tabular form; if this is included in the examination; and if he will make a statement on the matter. [47550/17]
Amharc ar fhreagraThe Central Bank has advised that, due to statutory confidentiality requirements, the Bank may not publicly disclose much of its supervisory engagement with individual firms. In particular, the Central Bank can, generally speaking, only disclose such information in summary or aggregate form so that individual firms cannot be identified. The Central Bank has to be careful that any public disclosures made by it do not breach its statutory confidentiality requirements, or prejudice any ongoing or possible future supervisory or enforcement actions.
However, the Central Bank has advised that the Tracker Mortgage Examination 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). Bank staff accounts are included the same as any customer account.
As per the Central Bank’s status update of 17 October, circa 13,000 affected customers have been identified to date through the Examination. Prior to the examination, the Central Bank ensured a further 7,100 cases involving tracker mortgage issues were rectified and remedied.
In accordance with the Examination Framework, the Central Bank expects that, for all impacted customers, lenders’ redress and compensation offers will restore them to the position they would have been in had the detriment not occurred and that they are appropriately compensated for the detriment suffered. The Central Bank expects the majority of the 13,000 customers identified to date under the Examination will receive redress and compensation by year-end. Central Bank decisions regarding the groups of customers identified as part of the Examination and disputed by some lenders to date will be issued to lenders by mid-December.
As at end-September, €120 million has been paid in redress and compensation to approximately 3,300 impacted borrowers. This is in addition to redress and compensation provided by permanent tsb plc (€36.8 million) and Springboard Mortgages Limited (€6.2 million) to customers pursuant to their Mortgage Redress Programme (MRP), which was required by the Central Bank and predated the Examination. Accordingly from July 2015 to end September 2017 the aggregate figure for redress and compensation to customers arising from the MRP and the Examination is €163 million.
59. Deputy Michael McGrath asked the Minister for Finance when offshore operations commenced in each of the State supported banks; when operations ceased in these institutions; and if he will make a statement on the matter. [47597/17]
Amharc ar fhreagraOfficials in the Department of Finance have received the following responses from the banks in relation to the Deputy’s question:
AIB:
AIB’s businesses in Isle of Man and Jersey were established in 1977 and 1981 respectively. AIB became the owner of Anglo Irish Bank Corporation (International) PLC (now known as AIB ISL
(Limited) on 24 February 2011. Arising from the recapitalisation and restructuring of AIB, and the European Commission decision on State Aid, it was decided to wind down AIB ISL
Limited and AIB CI Limited in 2012. They ceased operations on 31 December 2013.
PTSB:
In its response, PTSB has assumed the Deputy’s question refers to deposit taking operations.
|
Off Shore Entity Name |
Operations Commenced |
Operations Ceased |
|
Permanent Bank International Ltd |
Acquired from Irish Nationwide Building Society in 2011. |
31/12/2017 |
|
Irish Permanent (IOM) Ltd |
1993 |
2010 |
60. Deputy Michael McGrath asked the Minister for Finance if offshore operations exist at present in the State supported banks; if so, the number of accounts involved; the amount of deposits held; and if he will make a statement on the matter. [47598/17]
Amharc ar fhreagraOfficials in the Department of Finance have received the following responses from the banks in relation to the Deputy’s question:
AIB:
Arising from the recapitalisation and restructuring of Allied Irish Banks, p.l.c. the banking operations of AIB ISL Limited and AIB CI Limited were wound down by 30 November 2013.
PTSB:
Permanent TSB plc had two operations in the Isle of Man. The two are now either closed or in the process of closing.
Specifically, Irish Permanent (IOM) Limited (IPIOM) surrendered its banking licence and closed for business in 2010. Permanent Bank International Limited (PBI) is in wind down and will surrender its licence as a deposit taker at the end of next month. PBI was acquired as part of the acquisition of a deposit book from Irish Nationwide Building Society after the financial crash.
In IPIOM there are currently 89 accounts representing deposit balances of £370,000 that remain to be repatriated to “out of contact customers”. In PBI there are 223 accounts that remain to be closed, representing deposit balances of £20.2 million (Note: approximately 100 of these accounts are scheduled to close before the end of this month).
61. Deputy Michael McGrath asked the Minister for Finance the number of deposit accounts held offshore by a bank (details supplied) in each year since the commencement of offshore operations; the value of these deposits in each year; and if he will make a statement on the matter. [47599/17]
Amharc ar fhreagraAs the Deputy will understand, the information requested is not held within my Department. The banks in which the State is a shareholder operate on an independent, commercial basis and I as Minister do not have a role in their operations.
AIB have provided me with the following response to the Deputy's query:
"AIB ceased banking operations in Jersey and the Isle of Man by 30 November 2013.
AIB CI and AIB ISL has published their Financial Statements in line with their regulatory and statutory obligations during the relevant periods when its entities were licensed by the applicable Regulators in the jurisdictions that it was carrying out regulated activities therein.
|
Year End |
AIBCI Deposit Book* |
AIBISL Deposit Book** |
|
|
GBP£ |
GBP£ |
|
2012 |
143m |
48m |
|
2011 |
877m |
880m |
|
2010 |
1.692bn |
|
|
2009 |
2.341bn |
|
|
2008 |
2.458bn |
|
|
2007 |
2.137bn |
|
* Please note that AIBCI figures are consolidated figures for both Jersey and Isle of Man branches.
** Note ownership of Anglo Irish Bank Corporation (International) PLC, now known as AIB ISL Limited, transferred to AIB on 24 February 2011 under a transfer order made by the High Court on application by the Minister for Finance, acting under powers granted by the Irish Credit Institutions (Stabilisation) Act 2010.
AIB Group does not have ready access to historic customer number data.
On the surrender of the banking licences, the Banks established segregated accounts, with Estera Trust (Jersey) Limited & Estera Trust (Isle of Man) Limited, as administrator, being responsible for administering all unclaimed balances. Any such remaining Account Holders ceased to be depositors with the Banks and instead became a creditor of the respective legal entity for an amount equal to the balance of their former Account(s). Allied Irish Banks, p.l.c. has requested and been furnished with the following information by the administrator Estera Trust (Jersey) Limited & Estera Trust (Isle of Man) Limited."
|
Year End |
ABCI Scheme |
ABCI Scheme |
AIBISL Scheme |
AIBISL Scheme |
|
|
GBP£ |
Customer Numbers |
GBP£ |
Customer Numbers |
|
2013 |
20.4 m |
440 |
2.6m |
70 |
|
2014 |
17.4m |
396 |
1.7m |
62 |
|
2015 |
12.8m |
374 |
1.5m |
58 |
|
2016 |
12.1m |
363 |
1.5m |
57 |
62. Deputy Michael McGrath asked the Minister for Finance if a bank (details supplied) acceded to requests from the Revenue Commissioners for data held in the Isle of Man and Jersey; the outcome of the Revenue Commissioners' investigation that commenced in 2004; if tax was recovered as a result of this investigation; if so, the amount recovered; and if he will make a statement on the matter. [47600/17]
Amharc ar fhreagra63. Deputy Michael McGrath asked the Minister for Finance the position regarding current investigations being undertaken by the Revenue Commissioners in respect of offshore accounts; if current investigations involve the State supported banks; if so, the banks involved; and if he will make a statement on the matter. [47601/17]
Amharc ar fhreagra65. Deputy Michael McGrath asked the Minister for Finance if it is against the law to move data from Ireland to another jurisdiction specifically to hide data from the Revenue Commissioners; when this law was introduced; if they are retrospective in nature; if the Revenue Commissioners will commence further investigations as a result of papers (details supplied); and if he will make a statement on the matter. [47603/17]
Amharc ar fhreagra66. Deputy Michael McGrath asked the Minister for Finance his views on Ireland's role in structures that allow corporations to reduce their tax bill in view of the release of papers (details supplied); his views on the impact on Ireland's reputation; his plans to review current structures to prevent such practices; and if he will make a statement on the matter. [47604/17]
Amharc ar fhreagraI propose to take Questions Nos. 62, 63, 65 and 66 together.
As respects question No. 62, I am advised by Revenue that section 851A of the Taxes Consolidation Act (TCA) 1997 imposes a statutory obligation on Revenue to maintain the confidentiality of information provided by a taxpayer, or obtained by Revenue from a taxpayer, for the purposes of the various taxation codes.
As the Deputy’s question relates to specific taxpayers, Revenue is, accordingly, precluded from providing a response in relation to the specific taxpayers referred to by the Deputy.
As respects the outcome of the Revenue investigation referred to by the Deputy, I am advised that, in 2003, Revenue commenced an investigation into the use of offshore bank accounts and other financial products to evade tax. During the initial phase of the investigation, taxpayers were afforded an opportunity to voluntarily disclose previously undeclared liabilities. The subsequent phase was undertaken primarily by way of enquiry letters issued to taxpayers on the basis of information relating to transfers to, and from, the State, involving a number of other jurisdictions, which was obtained from financial institutions on foot of High Court orders. The amount collected by Revenue over the course of this investigation in tax, interest and penalties exceeds €1 billion. Work is ongoing on a number of cases as part of this investigation.
As respects question No. 63, I am informed that the international environment has changed significantly in the years since the offshore assets investigation was initiated, with the emergence of closer cooperation between tax authorities worldwide aimed at those who hide their profits or gains offshore. Initiatives such as FATCA (an Inter-Governmental agreement to share financial account information with the United States), DAC (EU Directives on Administrative Cooperation), and CRS (the OECD’s Common Reporting Standard) are all now helping to ensure that tax administrations have greater visibility in respect of the offshore assets and income of their residents. Revenue inform me that they will make full use of information of this kind to identify and pursue those who have attempted to use offshore accounts, structures or assets to evade their tax obligations.
In the context of these new information sharing initiatives on off-shore income and assets becoming available to Revenue, it is no longer appropriate to provide incentives to tax defaulters to come forward and to disclose previously undisclosed income or assets. Accordingly, my predecessor, Deputy Noonan, introduced specific measures in the Finance Act 2016 to ensure that, as and from May 2017, tax defaulters whose default relates to offshore matters will be unable to avail of the benefits of the voluntary disclosure regime. Anyone who did not come forward by 4 May 2017 to regularise his or her tax affairs now faces the prospect of substantially higher penalties, publication in the Quarterly List of Tax Defaulters and possible prosecution.
Revenue is aware of the recent publication by media outlets of information deriving from the “Paradise Papers”. If these papers identify individuals or entities associated with Ireland, Revenue will examine the cases and intervene as appropriate. This could involve an enquiry letter, an audit or, where there are indications of a tax offence, investigation with a view to possible prosecution. Revenue will also work in close cooperation with other tax administrations, in the framework of the OECD’s Joint International Taskforce on Shared Intelligence and Cooperation, in addressing issues raised by the papers, and will, as appropriate share information under existing legal frameworks.
As respects question No. 65, I am informed by Revenue that while there is no specific restriction on the moving of data to another jurisdiction, section 886 of the TCA 1997 requires that taxpayers must keep all records that are required to ensure a full and detailed tax return in respect of income tax, corporation tax and capital gains tax can be made.
Records includes any records, accounts, documents and any other data maintained manually or electronically which a person is obliged under the various Taxes Acts to keep, issue, or produce for inspection. The records must be kept for a period of 6-years, or a greater period if the person has failed to make a return of income, or where a transaction is the subject of an investigation or proceedings.
I am also informed that section 1078 of the TCA 1997 criminalises failures to comply with the provisions of the various Taxes Acts which require the furnishing of returns of income, profits or gains and the keeping and retention of books, records, accounts and other documents for tax purposes. Specifically, the destruction or concealment of records from an authorised officer is a criminal offence under section 1078 (2)(h) and (hh) of the TCA 1997.
It is also an offence under section 1078 to be knowingly concerned in the evasion of tax, or to knowingly deliver any incorrect return, statement, accounts or information in connection with any tax.
As respects question No. 66, the stories reported by the ICIJ make a number of points about changes in the Irish tax system. They rightly point out that Ireland has already acted to address definitively the issues around stateless and double Irish companies.
Multinational corporations’ tax planning has been subjected to intensive international examination in recent years, in particular in the OECD’s BEPS Project. Tax administrations worldwide, including many non-OECD countries who have committed to implementing the anti-avoidance recommendations arising from the BEPS Project, have agreed that addressing the global problem of corporations exploiting gaps and mismatches between different countries' tax rules requires the widest international co-ordination.
Ireland is committed to working with our international partners to ensure that agreed measures addressing these issues are widely adopted. Ireland has already taken a number of steps towards implementing the BEPS Actions. In addition, the Coffey Review sets out a roadmap for implementing the remaining OECD recommendations, beginning with the launch of a consultation process which is now underway, and Ireland will also be implementing the EU Anti-Tax Avoidance Directives, which give coordinated effect to specific BEPS Actions across the EU, to the timelines set out in the Directives.
Unilateral national actions will not address multinational corporations’ tax planning. Attributing international arrangements put in place by multinational corporations to Ireland’s role is damaging and inaccurate. While offering a competitive regime that builds the economy and provides jobs for our people, Ireland continually monitors international tax developments and will take any actions needed to implement enhanced international standards.
Ireland meets the highest standards in transparency and this has been recently verified, for a second time, by the OECD-led Global Forum on Transparency and Exchange of Information for Tax Purposes. In August 2017, following an in-depth Peer Review, the Global Forum again awarded Ireland the highest rating, making Ireland one of only a small minority of the 145-member Global Forum to achieve this rating.
64. Deputy Michael McGrath asked the Minister for Finance if as a shareholder in State supported banks he or his predecessor's attention was drawn to offshore operations within these banks; the actions taken subsequently to stop the operations; and if he will make a statement on the matter. [47602/17]
Amharc ar fhreagraAs I indicated earlier this week I have discussed these disclosures with the Revenue Commissioners who are the most appropriate authority to examine matters raised in the media arising from the so called 'Paradise Papers' and the Chairman has assured me they would be monitoring the revelations as they arose. I would also call on the ICIJ to share any information it has with Revenue.
I would add that the Minister for Finance has no direct function in strategic or operational decisions made by the banks in which the state is a shareholder, and decisions in this regard are the responsibility of the board and management of each institution, under the supervision of their regulator and equivalent authorities in the jurisdictions relevant to their operations.
The Minister must ensure that the banks are run on a commercial and independent basis and in this regard a Relationship Framework has been specified that defines the nature of the relationship between the Minister for Finance and the banks. These Frameworks were originally published on 30 March 2012 and can be found on the Department of Finance website.
67. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform if the damage done to the Donaghmore Souterrain was brought to the attention of An Garda Síochána by his Department or an agency or body under the aegis of his Department (details supplied); and if so, if the report confirming same can be provided. [47425/17]
Amharc ar fhreagraAs indicated in replies to previous Questions on 28 March and 11 April last, the OPW is not in a position to state with certainty how the damage at the Donaghmore site came to be caused or who was responsible. In these circumstances, a formal complaint to An Garda Siochána was not pursued.
