Tax Credits

Ceisteanna (78)

Niall Collins

Ceist:

78. Deputy Niall Collins asked the Minister for Finance the position regarding the establishment by the Revenue Commissioners of a research and development discussion group to consider the administrative burdens faced by those engaging with research and development tax initiatives in tandem with a new practice for SMEs regarding the qualifying science test; the estimated costs associated with setting up and maintaining this discussion group; and the number of part-time and full-time staff working in the Revenue Commissioners in a dedicated unit with respect to research and development tax related matters. [5247/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that there is a Research & Development (R&D) discussion group which reports to the Direct and Capital Taxes Sub-Committee of the Tax Administration Liaison Committee (TALC).  The main purpose of the discussion group is to provide a forum for Revenue and representative organisations to raise and address issues affecting the operation of the R&D tax credit and the Knowledge Development Box (KDB).  The group provides a platform for issues to be raised with Revenue, but also for Revenue to raise issues and concerns with representative bodies.

As with all TALC interactions, the relevant Revenue officers take part in the discussion group as part of their normal functions.  All members of the group are there in a representative capacity.  There is no cost associated with the setting up or maintaining the group. 

Revenue does not have a dedicated unit exclusively looking after Research and Development matters.  The R&D tax credit, like all other elements of corporation tax, is administered within the existing Revenue structures. This includes customer service to assist taxpayers to voluntarily comply with their tax obligations together with compliance and verification programmes to assess and manage risk. Where a risk is identified then a compliance intervention and any subsequent non-compliance will be dealt with in accordance with the Code of Practice for Revenue Audit and other Compliance Interventions.  A small number of staff in the Revenue Legislative Service deals with the R&D tax credit and the KDB as part of a larger legislative workload.

This approach and the overall administration of the R&D tax credit by Revenue were extensively reviewed by the Comptroller and Auditor General and is set out under Chapter 14 of the 2015 Annual Report. 

I am advised by Revenue that it has issued extensive guidance on the R&D Tax Credit most recently in 2015. Additional guidance specifically to reduce the administrative burden for relatively small claims for SME’s and micro-companies was issued in February 2017.

Apprenticeship Data

Ceisteanna (79)

Niall Collins

Ceist:

79. Deputy Niall Collins asked the Minister for Finance the number of persons enrolled in apprenticeships in his Department and State agencies under his remit by gender in tabular form; and if he will list each such apprenticeship. [5257/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I wish to inform the Deputy that my Department does not operate an apprenticeship programme. None of the Agencies under the remit of my Department has any persons currently enrolled in apprenticeships.

Corporation Tax Regime

Ceisteanna (80, 81)

Michael McGrath

Ceist:

80. Deputy Michael McGrath asked the Minister for Finance the amount of corporation tax revenue received in 2017 from the aircraft leasing and finance industry; the number of aircraft leasing and finance companies in existence here; and if he will make a statement on the matter. [5265/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

81. Deputy Michael McGrath asked the Minister for Finance the amount of corporation tax revenue received in 2017 from digital and Internet companies; and if he will make a statement on the matter. [5266/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 80 and 81 together.

I am informed by Revenue that initial analysis of 2017 data indicate that the net Corporation Tax receipts from the aircraft leasing and finance industry were in the region of €40 million.  In relation to the number of aircraft leasing and finance companies, tax returns for 2015 (the latest full year available) indicate there are around 2,600 such companies operating in Ireland.

Regarding Question 5266-18, it is assumed that the Deputy is referring to the Corporation Tax associated with the digital or internet trade element of corporate profits. In the rapidly evolving digital economy, many companies increasingly trade in this environment. Corporation Tax returns do not separate out the digital and internet activities of companies from other activities within the same entity. I am informed by the Revenue Commissioners that for this reason it is not possible presently to give a comprehensive estimate of the amount of Corporation Tax receipts from digital and internet companies.  However, Revenue is reviewing whether further detail can be ascertained in relation to these activities.  The Deputy may wish to note that a breakdown of receipts by broad industry sector is available on the Revenue website at

https://www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-sector.aspx.

Banking Sector

Ceisteanna (82)

Michael McGrath

Ceist:

82. Deputy Michael McGrath asked the Minister for Finance the progress State-supported banks have made on Payment Services Directive II, PSD2; the potential implications for not implementing the directive; the potential implications for non-compliance in time; and if he will make a statement on the matter. [5267/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

In relation to the Payment Services Directive II (PSD2), I have received the following comments.

AIB

"AIB has implemented all aspects of PSD II which came into effect on 13 January 2018 and is on track to implement the remaining articles once the final Regulatory Technical Standards (RTS) has been published and its implementation date agreed."

PTSB

"Permanent TSB implemented PSD2 on the 13th January 2018 and updated and communicated to customers the changes in Terms and Conditions accordingly."

Statutory Instrument No. 6 of 2018 – European Union (Payment Services) Regulations 2018 – deals with PSD2. Section 134 sets out the penalties for offences under Statutory Instrument No. 6 which are listed under sections 126-131. Statutory Instrument No. 6 can be found at the following link:

http://www.finance.gov.ie/wp-content/uploads/2018/01/18012-S.I.-No.-6-of-2018-European-Union-Payment-Services-Regulations-2018.pdf 

Banking Sector

Ceisteanna (83)

Michael McGrath

Ceist:

83. Deputy Michael McGrath asked the Minister for Finance the progress State-supported banks have made on the Markets in Financial Instruments Directive II, MiFID II; the potential implications for not implementing the directive; the potential implications for non-compliance in time; and if he will make a statement on the matter. [5268/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As the Deputy will be aware, the Markets in Financial Instruments Directive II came into effect at the beginning of this year.

AIB have provided me with the following comment:

"MiFID II obligations which were due for 3 January have been assessed and the relevant updates have been applied to the AIB business model. Elements that are phasing in post this date are in development and are currently on track for delivery."

PTSB have provided me with the following comment:

"Permanent TSB has addressed the requirements of the Markets in Financial Instruments relating to its business."

The European Union (Markets in Financial Instruments) Regulations 2017 – Part 2, Chapter 4 of Statutory Instrument 375 of 2017 – lists applicable sanctions. The Statutory Instrument can be found at the following link:

http://www.irishstatutebook.ie/eli/2017/si/375/made/en/pdf.

Mortgage Data

Ceisteanna (84)

Michael McGrath

Ceist:

84. Deputy Michael McGrath asked the Minister for Finance the value of warehoused debt for the 27,376 PDH split mortgages; the value of warehoused debt for the 2,048 BTL split mortgages; the amount of the warehoused debt owned by each of the State-supported banks; the plan or strategy in place to deal with outstanding warehoused debt; and if he will make a statement on the matter. [5269/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Central Bank has provided me with the following information in relation to the warehousing of a portion of debt associated with split mortgages.

"The Central Bank publishes Mortgage Arrears Data detailing quarterly developments in the number and value of mortgages in arrears, restructured mortgages, repossessed properties, for principal residences and buy-to-let properties. The reporting population includes credit institutions, non-credit institutions and non-resident mortgage providers.

The corresponding values of the sum of permanent and temporary split mortgages, as restructure types is €2.7 billion for PDH, and €273 million for BTL.

The Central Bank of Ireland is providing input into the ECB’s review of warehoused debt but this process has yet to be completed. The output from this process will be communicated to the relevant institutions through the regular supervisory channels."

In response to the Deputy's question, AIB have advised me of the following:

"The value of warehouse debt for split mortgages is not disclosed in the Bank’s Annual Financial Accounts.

AIB supports co-operating customers and provides sustainable solutions based on customers affordability. The warehouse/secondary facility facilitates the provision of a restructured solution which is aligned to the customers affordability. Repayment is dependent on the customers performance on the restructured loan and is reviewed on a case by case basis."

In response to the Deputy's question, PTSB have advised me of the following:

"Permanent TSB has approximately 6,500 active split mortgage loans.  There are 6,137 Home Loans with warehouse balances of €593m and 388 Buy-to-Let Loans with warehouse balances of €44m.

Permanent TSB’s approach to this warehouse debt is in accordance with CCMA and its agreement with these customers to engage with them on a regular review cycle such that as the customer’s circumstances improve, the debt is transferred from the warehouse to the live mortgage in order that the loan is repaid at end of the mortgage term."

Tax Appeals Commission

Ceisteanna (85, 86, 87, 88)

Michael McGrath

Ceist:

85. Deputy Michael McGrath asked the Minister for Finance the number of tax appeals before the Tax Appeals Commission; the value of tax these disputes amount to; the appeals by ranges (details supplied) respectively, in tabular form; and if he will make a statement on the matter. [5270/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

86. Deputy Michael McGrath asked the Minister for Finance the age and value of tax appeals before the Tax Appeals Commission by ranges (details supplied) respectively, in tabular form; and if he will make a statement on the matter. [5271/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

87. Deputy Michael McGrath asked the Minister for Finance the number of new appeals brought before the Tax Appeals Commission in each month since January 2016; the number of cases concluded in each month since January 2016; and if he will make a statement on the matter. [5272/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

88. Deputy Michael McGrath asked the Minister for Finance the number of appeals before the Tax Appeals Commission that have been concluded since January 2016 that have been settled; the value of the settled; the number that have been withdrawn; the value these amounted to; the number of cases that have been heard; the value these appeals amounted to; and if he will make a statement on the matter. [5273/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 85 to 88, inclusive, together.

The TAC was established and new procedures for making, processing, adjudicating and determining appeals came into effect on 21st March 2016. Before this date taxpayers sent their appeals directly to Revenue who then transferred cases to the Appeal Commissioners when they were ready for a hearing. Since that date, taxpayers send their appeals directly to the TAC which then notifies Revenue of the appeals.  The TAC has full control over the processing and hearing of appeals.

I am advised by the TAC that the number of appeals before it can change frequently, depending on a number of factors, including the number of additional appeals received each day; the numbers closed each day; how many appeals are part-settled and how many that will settle based on the outcome of a “leader-case”. The Commission can also be informed, by an appellant(s) or the Revenue Commissioners, that an appeal has settled or been withdrawn which might indicate a reduction in the number of appeals on hand; however, until this is confirmed by both parties, the TAC cannot deem the matter closed.

I am further advised by the TAC that it is not possible, for the most part, to provide the age of tax appeals before it, as many of them were transmitted to the Commission, in large tranches during 2016 by the Office of the Revenue Commissioners. In relation to those ‘legacy’ appeals, some were submitted by the appellant in 2016, to Revenue, but many had been with Revenue for some time before that. Therefore, it is only possible to advise of when the TAC received appeals in 2016, 2017 and 2018.

Following its establishment in 2016, I am informed that approximately 3,322 appeals transferred to the TAC, at various stages during 2016, from both the Office of the Revenue Commissioners and the Office of the Appeal Commissioners. The TAC has further advised me that, as of 30 January, it currently has approximately 3,648 appeals under its remit.

The TAC has informed me that this figure comprises of the following active appeals:

Appeals received 2016: 499

Appeals received 2017: 1,475

Appeals received 2018: 251

Legacy Appeals: 968

Pre Establishment: 305

Cases Stated: 150

  The tables below have been provided by the TAC which reflect all new appeals received and those closed in 2016, other than legacy appeals and pre-establishment appeals relating to years prior to 2016. I have also been informed that a further 400 appeals which were received in 2016 have been closed since then, leaving a remaining total of 499 appeals.

As per table 2 below, the TAC received 1,743 new appeals in 2017. The table reflects all new Appeals received and those closed in 2017. Of these, I am advised that a further 16 have been closed in 2018, leaving a total of 1,475 appeals dating from 2017.

 Table 1 - New Appeals Per Month 2016

 

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Appeals Received

30

40

40

83

74

90

113

71

81

78

94

105

899

Appeals Closed

5

8

3

9

14

15

24

14

14

22

40

41

209

Table 2 - New Appeals Per Month 2017

 

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Appeals Received

561

77

173

90

105

81

111

88

105

93

108

151

1,743

Appeals Closed

5

13

18

16

66

24

30

14

9

24

9

24

252

Table 3 - New Appeals Per Month 2018

 

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Appeals Received

251

 

 

 

 

 

 

 

 

 

 

 

251

Appeals Closed

1

 

 

 

 

 

 

 

 

 

 

 

1

 I understand that the TAC has been working to establish a more comprehensive database of the material relevant to ongoing appeals with a view to being in a better position, in mid-2018, to report in a more useful manner. I look forward to the completion of the data compilation enhancements by the TAC which I expect will result in it being in a position to report in a timely and more comprehensive manner. The TAC will be submitting its annual report to me before 31st March 2018 which I expect will contain comprehensive statistical information in relation to appeals, hearings, adjudications and determinations and which will be laid before the Houses of the Oireachtas. My Department will continue to liaise with the Commission in relation to its resource requirements.

While Revenue also maintains statistics on appeals, for various reasons these will not necessarily correspond with those provided by the TAC. For example, there may be time lags in the notification of new appeals by the TAC to Revenue and also time lags in the closure of appeals by the TAC following settlement of an appeal by agreement between Revenue and the appellant. As the TAC is now the competent body for the management of appeals, I consider that it is appropriate that it be the primary source for appeals statistics. However, there is one important piece of information that the TAC does not currently receive for those appeals made directly to it. This is the value figure for the amount of tax that is outstanding or in dispute. I have been advised by Revenue that it would have no difficulty in providing the TAC with this information. This information could then be associated with the open appeals being managed by the TAC.

I have obtained the following information from Revenue in relation to the amount of tax in dispute with both corresponding value bands and age band.

Band (€)

Total in dispute (€)

Below   10,000 

3,358,955

10,000   to 50,000 

24,325,926

50,000 to 1,000,000

227,899,345

1,000,000   to 5,000,000 

298,752,433

Above   5,000,000  

1,054,644,264

 

 

Totals 

1,608,980,923 

Age (years)

Amount in dispute (€)

Less than 2

684,537,344

2 to 5 

567,293,382

6 to 10 

326,424,107

Older than 10 

30,726,090

 

 

Totals 

1,608,980,923

Tax Appeals Commission

Ceisteanna (89)

Michael McGrath

Ceist:

89. Deputy Michael McGrath asked the Minister for Finance the average timeframe it takes for a tax appeal in the Tax Appeals Commission from the submission of the appeal to its conclusion; the average timeframe it takes between a hearing being heard and the determination been made; and if he will make a statement on the matter. [5274/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Following its establishment the Tax Appeals Commission (TAC) received thousands of appeals from both the Revenue Commissioners and the Office of the Appeal Commissioners. Further to this the TAC became the first port of call for all new appeals, of which they received 899 in 2016. I am advised that due to the volume of appeals received and nature of the appeals, the information sought by the Deputy cannot be readily provided.

I understand that the TAC is increasingly conducting less formal hearings with a view to assisting all parties reach a settlement or agreement more expeditiously. These are also being used in order to facilitate the timely progression of appeals and where possible to agree the main points prior to the formal hearing.

With regard to the second part of the deputy's question, I am advised by the TAC, that since the appointment of the current Appeal Commissioners in late 2015, adjudication has commenced or been completed, either with or without a hearing,  in respect of 158 appeals. Determinations have issued in respect of 82 of those appeals. On average it took 213 days between the hearing and the determination. I am further advised that of the 76 remaining cases for which a determination is outstanding, they have been waiting on average 319 days so far to date. The Deputy may be interested to note that one of the outstanding determinations relates to an appeal case that will directly impact on approximately 350 individual appeals.

As the Deputy will appreciate these figures are averages and do not reflect the complexity of the appeals or the reasons for any possible delay. I am advised that hearings can be adjourned for a number of reasons to include the submission of further evidence, for further hearing at a later date, to await the outcome of Court proceedings etc., and of course for consideration by the Commissioner of the appeal prior to the determining of same.