Written Answers Nos. 151-167
151. Deputy Jackie Cahill asked the Minister for Finance his views on whether the functions carried out by the Irish Credit Bureau which is owned and run by the financial institutions in the State would better serve the economy and better protect persons if it were outside the control of the financial institutions; and if he will make a statement on the matter. [48938/17]
Amharc ar fhreagra152. Deputy Jackie Cahill asked the Minister for Finance if the Central Bank supports the objectives of the Irish Credit Bureau (details supplied); the manner of that support; and if he will make a statement on the matter. [48939/17]
Amharc ar fhreagraI propose to take Questions Nos. 151 and 152 together.
As the Deputy may be aware, the Irish Credit Bureau does not fall under the statutory remit of the Minister for Finance. Furthermore, the Irish Credit Bureau does not fall under the regulatory remit of the Central Bank of Ireland. The stated objectives of private companies are a matter for the companies themselves.
However, the Deputy may wish to note that the Government gave a commitment as part of the EU/IMF Programme of Financial Support for Ireland to develop a legal framework that would facilitate the collection and centralisation of financial information on loans. The Credit Reporting Act 2013 was framed from the recommendations of the Report of the Inter-Agency Working Group on Credit Histories, which recommended the establishment of a central credit register to resolve weaknesses identified in various reports published subsequent to the banking crisis. The Credit Reporting Act 2013 provides for the establishment of a Central Credit Register, a new centralised system for collecting, on a mandatory basis, specified personal and credit information on loans and other credit agreements and which will be operated by the Central Bank of Ireland. The Register will collect and hold information on loans valued at €500 or higher. Lenders will be required to check the Register when considering credit applications for €2,000 or more.
The Central Credit Register is being implemented on a phased basis with phase 1 focusing on the submission of information on consumer loans. Phase 1 commenced on 30 June 2017 and lenders must have completed the submission of Phase 1 data by 31 December 2017, backdated to 30 June 2017.
Phase 2 focuses on submission of information from licensed moneylenders, local authorities and business loans and is scheduled to commence on 31 March 2018. Subject to data quality assurance, it is anticipated that credit reports will be available for lenders and borrowers in 2018.
Once operational the Central Credit Register will:
- Provide lenders with information on a borrower's existing credit position to aid their assessment of a borrowers’ creditworthiness
- Equip borrowers with information on their financial profile
- Give the Central Bank better insight into financial markets and support several functions such as prudential supervision, statistics, and financial stability.
Under the Act, borrowers have the following rights:
- Request their credit report for information on the central credit register in respect of them
- Insert an explanatory statement on their credit report
- Apply to have information amended
- Report and be informed of suspected impersonation
Lenders may only request a borrower's credit report when a borrower has:
- Made an application for a new loan
- Applied to have an existing loan restructured
- Arrears on an existing loan or breached the limit on a credit card or overdraft.
153. Deputy John McGuinness asked the Minister for Finance if the pension being paid to a person (details supplied) is the correct amount; if the tax deductions are correct; and if an examination of the matter will be expedited. [48990/17]
Amharc ar fhreagraI am advised by Revenue that the matter of whether the amount of pension being paid to the person concerned is correct is a matter in the first instance for the pension provider.
The tax credits allocated to the person concerned are, based on the information available to Revenue, correct.
If the person concerned wants to verify the correct tax has been deducted for any year, he can request a review of his overall tax position at the year end. The fastest and most efficient method to request a review is for the person concerned to register for Revenue's online service myAccount and to request the review online, on receipt of his P60, for the year in question.
154. Deputy Darragh O'Brien asked the Minister for Finance if he has raised the issue at EU level of an EU reform fund being established to help countries and regions most exposed to Brexit; and if he will make a statement on the matter. [49018/17]
Amharc ar fhreagraThe Government’s Brexit priorities are clear. They are to protect the peace process, ensuring no hard border, maintenance of the Common Travel Area, securing an effective transitional arrangement leading to the closest possible trading relationship with UK, and working for the future of our Union.
As set out in the Government’s position paper of 2 May 2017, to mitigate the economic implications associated with Brexit, the Government is taking a five pronged approach.
- To continue to prudently manage our economy and the public finances;
- To negotiate effectively, as part of the EU 27, which includes aiming for the closest possible future relationship between the EU and the UK;
- To continue supporting business and the economy through Government measures, programmes and strategies;
- To explore existing and possible future EU measures that could potentially assist Ireland in mitigating the effects of the UK’s withdrawal, while also making a strong case at EU level that Ireland may require further support on the basis that Brexit represents a serious disturbance to the Irish economy;
- and to maximise fully any economic opportunities arising from the UK’s decision to leave the EU.
The Government has already taken important steps to prepare our economy, including significant measures announced as part of Budget 2018, the Action Plan for Jobs 2017, and our Trade and Investment Strategy. Building on the suite of measures contained in Budget 2017, Budget 2018 announced a series of Brexit measures to further prepare Ireland’s economy for the significant challenges ahead. These measures include: a doubling of additional Brexit-related staff in state agencies; supports for capital investment in the food industry; €25m in loan schemes for the agri-food sector; and a new €300m low-cost Brexit loan scheme for business which will be supported by the European Investment Bank (EIB), the European Commission and the Strategic Banking Corporation of Ireland (SBCI).
The issue of investment funding, in the context of the Brexit challenges facing the Irish economy, is the subject of ongoing discussions with the European Investment Bank (EIB). Also, there is ongoing engagement with the Commission on State Aid rules issues - the recent publication by the Department of Business, Enterprise and Innovation, Building Stronger Business, refers.
The Government will continue to engage with EU partners and EU institutions to ensure that Ireland’s concerns and priorities continue to be understood, with recognition of our unique circumstances and specific issues.
155. Deputy Brian Stanley asked the Minister for Finance the measures that have been taken over the past 18 months to reduce the exorbitant cost of insurance on private and commercial vehicles; the further steps planned; and if he will make a statement on the matter. [49027/17]
Amharc ar fhreagraThe Deputy should note at the outset 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 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 the risks they are willing to accept.
However, it is acknowledged that pricing in the motor insurance sector for private and commercial vehicles has been subject to a lot of volatility in recent years, from a point where some premiums appeared to be priced at an unsustainably low level to the more recent experience of large increases.
Indeed, the problem of rising motor insurance premiums was the main impetus for the establishment of the Cost of Insurance Working Group in July 2016. Its Report on the Cost of Motor Insurance was published in January 2017. The Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, which are set out in an Action Plan.
These recommendations were formulated to address the issue of increasing motor insurance costs, whilst taking account of the need to ensure a financially stable insurance sector. This stability aspect is important, as we do not want to find ourselves in a situation again where particular firms drive prices down to a level that is unsustainable and which ultimately results in insolvency.
Work is ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and there is a commitment within the Report that the Working Group will prepare quarterly updates on its progress. The third such update was published on the Department's website on 23 October 2017 and shows the progress to date on the overall implementation of the recommendations.
32 actions were due for completion in the first three quarters of the year in total and 29 of those actions have been completed to date. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. The fourth quarterly update should be published early in the New Year and will focus on the 14 actions which are due for completion in the final quarter of 2017.
I believe that the ongoing implementation of the Report on the Cost of Motor Insurance, in addition to the implementation of the Working Group's forthcoming report on employer and public liability insurance, will make a difference to the pricing of insurance premiums over the next 12 or so months. I also believe that the Setanta judgment, by finding that MIBI is not liable to meet third party claims, removes a major uncertainty from industry, which I would expect to be reflected in pricing in the short to medium term.
Finally, it should be noted that the most recent CSO data (for October) indicates that private motor insurance premiums have reduced by 15.2% from the peak in July 2016. While the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore there are many people who may still be seeing increases. However, I am hopeful that this greater stability in pricing will be maintained and that premiums should continue to fall from the very high level of last year.
156. Deputy Jonathan O'Brien asked the Minister for Finance the domain names registered to or owned by his Department or through a third party company. [49062/17]
Amharc ar fhreagraIn response to the Deputy's question, the domain names registered to or owned by my Department or through a third party are listed as follows:
- http://finance.gov.ie
- http://databank.finance.gov.ie
http://taxpolicy.gov.ie
- http://banking.finance.gov.ie
- http://sepa.gov.ie
- http://budget.gov.ie
- https://www.switchyourbank.ie
- http://bankaround.ie
Please note that the domains listed relate to active websites. This list does not include domains registered to or owned by the Bodies under the Aegis of my Department.
I would like to advise the Deputy that ICT services and IT Infrastructure services for the Department of Finance are provided by the Office of the Government Chief Information Officer (OGCIO) under the Department of Public Expenditure and Reform. On behalf of my Department, the OGCIO implements a multi-layered approach to managing and protecting departmental ICT systems, applications, infrastructures and services.
157. Deputy Niall Collins asked the Minister for Finance the annualised interest rate applied on late payment and filing of P30 returns; the equivalent rate of interest applied in the UK and in other EU and OECD countries, in tabular form. [49094/17]
Amharc ar fhreagra158. Deputy Niall Collins asked the Minister for Finance the annualised interest rate applied on late payment and filing of VAT returns; the equivalent rate of interest applied in the UK and in other EU and OECD countries, in tabular form. [49095/17]
Amharc ar fhreagraI propose to take Questions Nos. 157 and 158 together.
I am advised by Revenue that statutory interest charges are designed to compensate the Exchequer for loss of revenue through late payment of tax, to encourage timely payments in future and to ensure equity for those taxpayers who pay on time.
The current annualised rate of statutory interest charged in respect of late P30 (PAYE/PRSI/USC/LPT) and VAT payments is 10%. This equates to a daily rate of 0.0274%. The 10% rate came into effect on 1 July 2009 as provided for by the Finance Act 2009. Prior to 1 July 2009 the rate was 12% per annum, which equated to a daily rate of 0.0322%.
For the Deputy’s additional information, the current rate of statutory interest charged in respect of late payment of Income Tax, Corporation Tax, Capital Gains Tax, Capital Acquisition Tax, Local Property Tax and Stamp Duty liabilities is 8% per annum (0.0219% per day).
It is not possible to provide an EU or OECD tabular breakdown in the manner requested by the Deputy because the systems operating across the various jurisdictions are not directly comparable. For example, some jurisdictions apply surcharges and penalties in addition to interest charges while others apply different rates for different taxes and for different periods of default.
In regard to the United Kingdom, the statutory interest rate in respect of late payments of tax is 3% Additional surcharges are also applied on a scaled basis depending on the level and frequency of default.
159. Deputy Mattie McGrath asked the Minister for Finance the average costs associated with processing and answering written and oral parliamentary questions; and if he will make a statement on the matter. [49124/17]
Amharc ar fhreagraServicing the democratic process through answering Parliamentary Questions (PQs) is a core responsibility of all Department of Finance staff.
The time spent responding to a question, and the number of staff involved in preparing the response, varies significantly depending on the complexity and importance of the topic, whether the response is to be written or oral, and whether information required for the response is readily available.
Accordingly, my officials have not estimated an average cost for the process of responding to PQs.
160. Deputy Clare Daly asked the Minister for Finance his plans to deal with those revealed to be involved in the Paradise Papers, particularly with regard to construction companies which continue to trade; and if he will make a statement on the matter. [49150/17]
Amharc ar fhreagraI am informed by Revenue that it is aware of, and actively examining, the information and allegations currently being published by various media outlets that originate from the “Paradise” papers. If further information and allegations become available from the same source over the coming days, Revenue will likewise examine any such further information or allegations that emerge.
Until all relevant information and allegations have emerged it is not possible for Revenue to formulate and decide its overall response to the information and allegations contained in the Paradise papers.
Revenue is determined that any tax evasion identified in relation to Irish taxpayers will be thoroughly investigated. Where tax evasion is uncovered Revenue will seek to have the maximum sanctions applied up to and including criminal prosecutions.
If instances of aggressive tax avoidance emerge, all such instances will be rigorously investigated and challenged by Revenue. Where anti-avoidance legislation can be applied to recover tax avoided through the use of unacceptable tax avoidance practices and schemes, Revenue will seek to apply such legislation with a view to recovering any Irish tax avoided together with all associated interest and tax avoidance surcharges.
Revenue’s work in the area of identifying offshore tax evasion has been, and continues to be, a priority. The international environment has changed significantly in the years since Revenue started to investigate offshore bank accounts and other offshore assets. Tax authorities worldwide now cooperate on a much wider and more intensive basis in investigating those who hide their profits or gains offshore than they did in the past. 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 access to information in respect of offshore assets and income of their residents. Revenue will make full use of information received from other jurisdictions under these new initiatives on offshore assets to identify and pursue those who have attempted to use offshore accounts, structures or assets to evade or avoid their tax obligations.
In the context of these new information sharing initiatives now becoming available, the Government introduced specific measures in the Finance Act 2016 to ensure that, as and from May 2017, tax defaulters whose default relates to offshore matters are 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 criminal 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 “Paradise” papers, and will, as appropriate share information with these other tax administrations under existing legal frameworks.
In the context of the construction sector, I am advised by Revenue that it has run a national programme to monitor risks and compliance levels in this sector since 2015 and this will continue to be a priority in 2018. Revenue’s interventions in the construction sector, as in all other sectors, are risk focussed and driven by the taxpayer’s compliance behaviour, data Revenue has on its records and a variety of data from third parties, including the new international initiatives referred to above, and publicly available sources. In 2016, for example, compliance interventions in the construction sector yielded an additional €54.73 million in tax, interest and penalties.
161. Deputy Bernard J. Durkan asked the Minister for Finance if a tax relief for student fees paid outside the EU for one year of study exists in the case of a person who has lived and worked in Ireland in the years preceding their study, with particular reference to a student awarded a place in a university (details supplied) due to academic excellence; and if he will make a statement on the matter. [49182/17]
Amharc ar fhreagraSection 473A of the Taxes Consolidation Act 1997 provides for tax relief in respect of qualifying fees paid by an individual in respect of an approved course at an approved college subject to the terms and conditions set out in the section. Tax relief is available where a student attending an approved college carries out an undergraduate course of at least two academic years' duration or a postgraduate course of not less than one and not more than four academic years' duration.
An approved college outside the EU is a university or similar institution of higher education which (i) is maintained or assisted by recurrent grants from public funds of that country, or (ii) is a duly accredited university or institution of higher education in the country in which it is situated.
I am advised by Revenue that the university referred to by the Deputy qualifies as an approved college.
162. Deputy Michael McGrath asked the Minister for Finance if he will respond to a matter raised in correspondence (details supplied) concerning the help-to-buy scheme. [49267/17]
Amharc ar fhreagraThe Help-to-Buy (HTB) incentive is intended to assist first-time purchasers to secure a deposit for a mortgage. In the absence of the measure, many such purchasers would have difficulty securing the required deposit under the Central Bank macro-prudential rules. The incentive is provided for in s. 477C of the Taxes consolidation Act 1997 which states:
'first-time purchaser' means an individual who, at the time of a claim has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling;
This definition reflects that used in the Central Bank macro-prudential rules.
In the case of non-first-time purchasers, I accept that there will be instances where there is little equity or negative equity in a previously purchased property.
However, of its nature, the Help-to-Buy incentive is a limited and targeted measure intended to complement the macro-prudential rules. I would also note that, in their recent review of the scheme, Indecon Economic Consultants found that the measure has been implemented in an efficient manner and targets supports for first-time buyers to help them fund the deposit on a house.
I do not propose that the scheme should be extended to non-first-time purchasers.
163. Deputy Michael McGrath asked the Minister for Finance the number of persons claiming tax relief on third level tuition fees; the cost of the relief for each complete tax year since 2010, in tabular form; and if he will make a statement on the matter. [49313/17]
Amharc ar fhreagraI am advised by Revenue that the Cost of Tax Expenditures table is available on the Revenue Statistics webpage at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
This table sets out data on a wide range of reliefs, credits and allowances, including the number of taxpayer units benefiting from relief in respect of qualifying third level education fees, as well as the estimated total cost to the Exchequer, for the years 2004-2015, the latest year for which data are available.
The table, taken from the data in the Cost of Tax Expenditures table, outlines the number of claims and the cost to the Exchequer for this relief annually from 2010:
|
Year |
No. of Claims |
Cost of Claims (€m) |
|
2015 |
23,900 |
12.9 |
|
2014 |
24,000 |
12.7 |
|
2013 |
23,600 |
12.5 |
|
2012 |
25,300 |
13.4 |
|
2011 |
27,600 |
14.5 |
|
2010 |
31,700 |
19.4 |
164. Deputy John Curran asked the Minister for Finance the number of applications that have been received under the help-to-buy scheme to date in 2017; the number of these applications that have been processed; the amount of funding spent on this to date in 2017; and if he will make a statement on the matter. [49317/17]
Amharc ar fhreagraThe Help to Buy incentive aims to both assist those first-time buyers struggling to save for the deposit required to purchase a home, as well as incentivising additional building and the provision of extra housing stock.
To avail of the incentive involves two stages. Stage 1 is the Application Stage, wherein prospective applicants can query whether they qualify for the incentive. They can also get clarity on the maximum amount of rebate they could potentially benefit from, based on their tax paid in a four-year period. Stage 2 is the Claims Stage, wherein applicants that decide to proceed with purchasing or building a qualifying property must provide documentary evidence of the relevant property transaction or their mortgage draw down.
As of 31 October 2017, Revenue has received 11,367 applications to Stage 1 of the Help to Buy incentive. Of these, 4,487 Stage 2 claims have been created to date. 3,882 of these have been approved, at a total estimated cost to the Exchequer to date in the order of €55.5 million of which €15.8 million is in respect of retrospective claims (for the period 19 July to 31 December 2016).
The Deputy may wish to know that Revenue regularly publishes statistics on the Help to Buy incentive (including the estimated cost of the incentive) at http://www.revenue.ie/en/about/statistics/htb-incentive-stats.html.
165. Deputy Michael McGrath asked the Minister for Finance the position in circumstances when the payment of inheritance tax becomes due by a person living here who is benefitting from an inheritance in respect of the estate of a person in the UK; if his attention has been drawn to the fact that in some cases the tax falls due before the deceased's estate has been administered; and if he will make a statement on the matter. [49364/17]
Amharc ar fhreagraI am advised by Revenue that inheritance tax may be payable by a person who is resident or ordinarily resident in the State where the person (i.e. the beneficiary) receives an inheritance from the estate of a deceased person living in the UK. Double taxation can potentially arise because Irish inheritance tax is based on the country of residence of the beneficiary while UK inheritance tax is based on the country of domicile of the deceased person. A double taxation treaty between both countries provides for tax relief where a particular asset, such as property, that is included in an inheritance is taxed in both countries. The relief operates by granting a credit against any Irish tax due in the amount of UK tax paid respect of the asset in question.
The date on which inheritance tax falls due is determined by the ‘valuation date’ on which the market value of the assets and property included in an inheritance is established. Where this date is between 1 January and 31 August, inheritance tax must be paid by 31 October in the same year. Where this date is between 1 September and 31 December, inheritance must be paid by 31 October in the following year.
Section 30 of the Capital Acquisitions Tax Consolidation Act 2003 contains the rules for determining the valuation date. The valuation date depends on the particular circumstances of a case and is not a fixed date in relation to all inheritances. It can be the date on which the assets and property included in an inheritance are given to a beneficiary or such earlier date on which the executors of the will become entitled to retain the assets or property for the benefit of a beneficiary. Generally the executors are entitled to retain the property for the benefit of the beneficiary on the date on which probate or administration is granted. Where there is delay in completing the administration of the estate after that date it may happen that inheritance tax falls due for payment before that administration is complete.
The establishment of the valuation date depends on the particular facts and circumstances of an inheritance and the administration of a deceased person’s estate. If a beneficiary who is resident in the State is uncertain about the appropriate valuation date to use in relation to the payment of a potential inheritance tax liability, the beneficiary may wish to contact his or her local tax office. On receipt of full details in relation to the case, a determination of the valuation date can then be provided by Revenue.
166. Deputy Pearse Doherty asked the Minister for Finance the details of his planned anti-avoidance measures to deal with the avoidance of stamp duty on the purchase of commercial property through buying shares in a company or investment fund which holds the commercial property and other measures which may be used to avoid or reduce the 6% stamp duty charge on commercial property; if these anti-avoidance measures will be back dated to budget day; and if he will make a statement on the matter. [49378/17]
Amharc ar fhreagraThe Deputy will appreciate that this is a complex area which I will be seeking to address during the forthcoming stages of Finance Bill 2017.
167. Deputy Pearse Doherty asked the Minister for Finance if costs (details supplied) are deductible for REITs when computing their annual property income in view of the fact that one of the qualifying criteria of a REIT is that it must make a distribution of not less than 85% of its annual property income; and if he will make a statement on the matter. [49379/17]
Amharc ar fhreagraThe Finance Act of 2013 introduced the regime for the operation of Real Estate Investment Trusts (REITs) in Ireland, found in Part 25A of the Taxes Consolidation Act 1997. The regime provides for a collective investment vehicle for persons wishing to invest in property. REITs must be widely held, as it is a requirement that the REIT not be a “close company”, that is, a REIT cannot be under the control of 5 or fewer participators.
The function of the REIT framework is not to provide an overall tax exemption, but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply on property investment via a corporate vehicle.
In general, the trading profits of companies in Ireland are subject to corporation tax at 12.5% while rental profits of companies are subject to corporation tax at 25%. Rental profits arising in a REIT are exempt from Corporation Tax, provided the REIT distributes at least 85% of its annual rental profits. Profits from any other activities within a REIT are subject to corporation tax in the normal way.
I am advised by Revenue that while a REIT must distribute 85% of its annual rental profits, the Companies Acts set out the amount of profits that a REIT has available for distribution.
In accordance with the Companies Acts, and taking a REIT which only has rental profit for simplicity: the profits available for distribution by the REIT would be the rental income of the REIT less all expenses of the REIT (including but not limited to local property tax (LPT), remuneration including bonuses and asset manager fees). It is important to note that a REIT does not get a tax deduction for LPT. In calculating the amount of a dividend a REIT is able to pay, the LPT gets deducted along with other expenses paid. This in turn reduces the amount of dividends a REIT can pay. The expenses come out of the profits, therefore, the profits available for distribution are the profits after deducting all expenses incurred. The investors are then taxed on the profits as distributed.
