Written Answers Nos 51-60
51. Deputy Billy Kelleher asked the Minister for Finance his views on the proposal under the multiannual financial framework, MFF, programmes of a 3% call rate to be applied to a new common consolidated corporate tax base; and the steps taken to protect Irish interests from such a scenario. [21974/18]
Amharc ar fhreagraAs the Deputy may be aware, the European Commission’s proposal for the Multiannual Financial Framework (MFF) 2021-2027 was published on 2 May 2018. I welcome the publication of the proposals which marks the start of an important debate on the future of the EU Budget.
The proposals are detailed and will require careful examination over the coming period, particularly as further details emerge. All relevant Government Departments will examine the full package carefully and to understand the overall implications for Ireland. Ireland will also engage constructively with European partners on these proposals.
By its nature, the Common Consolidated Corporate Tax Base (CCCTB) is a complex and detailed proposal and Member States need to fully analyse and consider its potential impact on national tax systems. Member States are discussing and debating the various aspects of the proposal in the relevant tax working parties. These discussions are at a relatively early stage and much more technical consideration is needed.
Consequently, it is premature to predetermine the outcome of Member States’ discussions, and as such it would not be prudent to rely on resources not yet agreed by Member States for financing the EU budget.
52. Deputy Billy Kelleher asked the Minister for Finance the steps being taken to reduce costs to businesses (details supplied). [21977/18]
Amharc ar fhreagraI note that the specific case which the Deputy mentions refers is a business owner seeking motor insurance at a competitive rate. The Deputy will appreciate that it would not be appropriate for me to comment on or review any particular case, but I will focus my reply on the Deputy's question on the steps taken within my remit to address the issue of insurance costs. As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in particular cases.
In making their individual decisions on whether to offer cover and what terms to apply, insurers will use a combination of rating factors, which include the age and type of the vehicle, as well as the age of the driver, the relevant claims record and driving experience, the number of drivers, the profession of the driver and how the car is used, etc. My understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurance companies will price in accordance with their own past claims experience, meaning that in relation to particular categories, different insurance companies will have different views.
Notwithstanding this, the Cost of Insurance Working Group has published two reports, into the Cost of Motor Insurance (2017) and Employer Liability and Public Liability Insurance (2018) to address the cost of insurance for consumers and businesses alike. The Motor Report made 33 recommendations across six key themes: protecting the consumer; improving data availability; improving the personal injuries claims environment; reducing the costs in the claims process; reducing insurance fraud and uninsured driving, and promoting road safety and reducing collisions. The Employer and Public Liability Report builds on those recommendations and its 15 recommendations focus on increasing transparency, reviewing the level of damages in personal injury actions and improving the personal injuries litigation framework. Both of these reports are available on my Departments website: www.finance.gov.ie/what-we-do/insurance/the-cost-of-insurance-working-group/.
Work is ongoing on the implementation of the recommendations made in each of these Reports and the Working Group has committed to publishing quarterly updates on its progress. The fifth such update was published on 11 May and shows that of the 50 separate deadlines set to date within the Action Plan, 40 have been met, while substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”.
It is envisaged that the cumulative effects of the completion of the two Reports’ recommendations will include increased stability in the pricing of insurance for businesses and improved availability of insurance products. In relation to the cost of motor insurance, it should be noted that the most recent CSO data (for April 2018) indicates that private motor insurance premiums have decreased by 19% since peaking 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 with the result that premiums should continue to fall from the very high levels of mid-2016.
53. Deputy Clare Daly asked the Minister for Finance if a dog breeding establishment (details supplied) is registered and in compliance with the Revenue Commissioners. [21743/18]
Amharc ar fhreagraSection 9 of the Dog Breeding Establishments Act 2010 provides that each local authority must maintain a register of dog breeding establishments located in its area of responsibility. The Act also places an obligation on any person seeking to operate a dog breeding establishment to have the premises included on the register. However, Revenue does not have any role to play under the Dog Breeding Establishments Act and is not involved in inspecting relevant establishments to ensure compliance with that legislation.
As regards taxation, the profits of any dog breeding business are liable to tax irrespective of whether it is included on a register of dog breeding establishments or not. Revenue has confirmed that it examined a number of such establishments as part of its 2017 compliance programme, most of which were found to be tax compliant with enquiries still ongoing in a small number of cases.
Taxpayer confidentiality provisions contained in section 851A of the Taxes Consolidation Act 1997 precludes Revenue from providing any information in regard to the specific case mentioned in the Deputy’s Question.
54. Deputy Richard Boyd Barrett asked the Minister for Finance if his attention has been drawn to the fact that musicians have particular difficulty in obtaining motor insurance from motor insurance companies and in many cases are refused even a quote due to their profession; his plans to address the matter; and if he will make a statement on the matter. [21746/18]
Amharc ar fhreagraAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in respect of particular categories of drivers or vehicles.
In making their individual decisions on whether to offer cover and what terms to apply, insurers will use a combination of rating factors, which include the age and type of the vehicle, as well as the age of the driver, the relevant claims record and driving experience, the number of drivers, the profession of the driver and how the car is used, etc. My understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurance companies will price in accordance with their own past claims experience, meaning that in relation to particular categories, different insurance companies will have different views.
However, it is acknowledged that pricing in the motor insurance sector has been subject to a lot of volatility in recent years with a related problem as referred to in the PQ being the availability of cover in the first place. These issues were the main impetus for the establishment of the Cost of Insurance Working Group. 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, set out within an Action Plan.
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 fifth such update was published on 11 May and shows that of the 50 separate deadlines set to date within the Action Plan, 40 have been met. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. Further details can be found in attached link. www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf.
It should be noted that the most recent CSO data (for April 2018) indicates that private motor insurance premiums have decreased by 19% since peaking 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 I appreciate many people may still be seeing increases. However, I am hopeful that the improved stability in pricing will be maintained and that premiums should continue to fall from the very high levels of mid-2016. In addition with the full implementation of the Motor Report, I believe that Ireland will be more attractive to new entrants thus increasing capacity as well as competition which should have a positive impact in niche areas such as musicians.
Finally, as the Deputy may be aware, under the terms of the Declined Cases Agreement (DCA), which is adhered to by all motor insurers in Ireland, if a consumer is unable to secure a quotation on the open market, he or she may be in a position to avail of the Declined Cases Agreement (DCA) process. Under the terms of the DCA, the insurance market will not refuse to provide insurance to an individual seeking insurance if the person has approached at least three insurers and has not been able to obtain cover from them. In this regard, there are further details available on the Insurance Ireland website while Insurance Ireland also operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. The relevant contact details are: feedback@insuranceireland.eu or declined@insuranceireland.eu or 01-6761914.
55. Deputy Peter Burke asked the Minister for Finance his strategy in Europe regarding the proposal being advanced on the taxation of the digital economy; and if he will make a statement on the matter. [21787/18]
Amharc ar fhreagraIn March the Commission published two proposed Directives in relation to the taxation of digital economy.
The first proposal is a ‘temporary’ solution of a 3% levy on turnover from certain digital service activities. The thresholds for application of a global turnover of €750 million and EU turnover of at least €50 million.
The second, "comprehensive solution" requires an overhaul of international taxation, establishing the concept of a "digital permanent establishment", allowing countries taxing rights over the business carried out by that entity in that country, even where the company has no physical presence in the country.
In respect of the Commission's proposals, discussions on the technical details are at a very early stage. Unanimity is required before any proposals can be agreed at EU level.
Ireland remains committed to global tax reform and believes that global solutions are needed to ensure tax is paid by companies where value is created. That is why Ireland has been a committed participant in, and strong supporter of, tax reform efforts led by the OECD through the BEPS process.
Ireland shares the view expressed in the recently published OECD Interim Report on the Digital Economy that further analysis is needed to achieve a globally agreed, evidence based solution, sustainable in the long run and focused on aligning taxing rights with the location of real substantive value creating activity.
Ireland will continue to actively engage with work in the area of the digital economy at both OECD and EU level.
56. Deputy Peter Burke asked the Minister for Finance the number of assistant principal posts or equivalent in County Westmeath under his aegis; the number of employees due to retire in the coming year; and if he will make a statement on the matter. [21797/18]
Amharc ar fhreagraOf the seventeen Bodies under the aegis of my Department, I am informed that in the location listed by the Deputy there are seven people employed at Assistant Principal level of which one will be due to retire in the coming year.
57. Deputy Peter Burke asked the Minister for Finance the number of assistant principal posts or equivalent in County Westmeath which are filled to date by employees under his aegis; and if he will make a statement on the matter. [21798/18]
Amharc ar fhreagraOf the seventeen Bodies under the aegis of my Department, I am informed that in the location listed by the Deputy there are seven people employed at Assistant Principal level.
58. Deputy Peter Burke asked the Minister for Finance his plans to recruit additional assistant principal posts or equivalent in County Westmeath in the next five years across all heads of Departments under his aegis; and if he will make a statement on the matter. [21799/18]
Amharc ar fhreagraOf the seventeen Bodies under the aegis of my Department, I am informed that in the location listed by the Deputy there are no current plans to recruit at Assistant Principal level or equivalent in the next five years.
59. Deputy Thomas P. Broughan asked the Minister for Finance if his officials are examining the practice of developers advertising residential units as price on application; the effect it has on house prices; and if he will make a statement on the matter. [21801/18]
Amharc ar fhreagraThe Department of Finance continues to monitor developments in the residential property market, including trends in property prices. Ongoing monitoring allows my Department to assess the property sector’s contribution to the economy, as well as to scrutinise potential risks emerging from the wider construction industry. The Department monitors price levels through stamp duty returns made on completed sales, as reported each month by the Central Statistics Office. As such, my Department does not make price enquiries to individual developers.
In order to improve transparency in the residential market, the Property Services Regulatory Authority publishes the Property Price Register. As a freely available public register of residential property sales, the PPR provides information on sales prices for properties at a local level. It offers more clarity for homes buyers on the prices paid for similar properties in their area and allows them to make more informed decisions.
The PSRA also regulates all Property Services Providers, including those selling residential properties. The PSRA has significant powers of sanction – up to an including the revocation of a licence – if any industry providers are found to be acting improperly in the course of their business.
60. Deputy Jan O'Sullivan asked the Minister for Finance the detail of the law regarding inheritance tax for siblings who are joint owners of a home in which they live together; if there have been recent changes to the tax imposed on a surviving sibling in the circumstances; and if he will make a statement on the matter. [21817/18]
Amharc ar fhreagraI am informed by Revenue that section 86 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for a dwelling house exemption which allows for property to be inherited tax-free where the inheritor is already living in the home subject to certain conditions. Firstly, the inherited dwelling house must have been the deceased person’s principal private residence at the date of his or her death. This requirement is relaxed in situations where the deceased person had to leave the house before the date of death because of ill health; for example, to live in a nursing home. In addition, the beneficiary must not have a beneficial interest in another residential property. Finally, the beneficiary must have lived in the house for 3 years prior to the date of the inheritance and must continue to live in the dwelling house for 6 years after the date of the inheritance.
Amendments to the dwelling house exemption in Finance Act 2016 sought to realign the exemption with its original policy objective i.e. to alleviate the hardship of an inheritance tax liability for a person who inherited a house in which he or she had been living with the deceased and to ensure that the person did not have to sell the house to pay the tax liability. Along with the requirement that the dwelling house be the principal private residence of the disponer, the changes also meant that the relief would only be available for inheritances. With one exception, it is no longer possible to receive a tax-free gift of a dwelling house. The exception is where a person gifts a dwelling house to a ‘dependent relative’. For this purpose, a dependent relative is a direct relative of the donor, or of the donor’s spouse or civil partner, who is permanently and totally incapacitated because of physical or mental infirmity from maintaining himself or herself or who is over the age of 65.
If a beneficiary qualifies as a ‘dependent relative’ then there is no requirement that the dwelling house be the principal private residence of the disponer or that the beneficiary remain in the dwelling house for 6 years after the date of the inheritance. For this purpose, a dependent relative is a direct relative of the disponer, or of the disponer’s spouse or civil partner, who is permanently and totally incapacitated because of physical or mental infirmity from maintaining himself or herself or who is over the age of 65.
The dwelling house exemption applies to siblings living together as it does to any other persons living together who satisfy the qualifying conditions for the exemption. The changes made in Finance Act 2016 as described above affect all such persons.
