Dáil Éireann Debate, Tuesday - 12 June 2018
211. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 180 of 29 May 2018, the annual tax cost of the tax relief on professional membership fees before the changes made in 2011; the annual tax cost of the relief on professional membership fees after 2011; the amount of a tax revenue saving that resulted from the 2011 changes; and if he will make a statement on the matter. [24649/18]
Amharc ar fhreagraFor the tax years 2004 to 2010, section 118(5E) of the Taxes Consolidation Act 1997 provided that expenses incurred by an employer on behalf of an employee in connection with the payment (or reimbursement) of annual membership fees of a professional body were exempt from tax where such membership was regarded as "relevant to the business" of the employer. This section was repealed in Finance Act 2011 and ceased to apply from the tax year 2011. At the time this provision was expected to yield €3 million to the Exchequer in 2011 and €5 million in a full year.
Since 2011, professional membership fees are only deductible under section 114 of the Taxes Consolidation Act 1997 where they are incurred wholly, exclusively and necessarily by an individual in the performance of the duties of his or her employment. In the context of professional fees, this generally means where:
- the duties of his or her employment necessitate that the employee is a member of a professional body, or holds a practicing certificate or licence, and
- the employee cannot exercise those duties without that membership or certificate
Where such fees are not reimbursed by the employer then the employee concerned can claim the appropriate tax relief. I am advised by Revenue that the information on tax returns relating to claims for expenses does not separately distinguish professional membership fees from other allowable deductions. It is therefore not possible to provide an estimate of the cost or yield related to any specific expense type and so it is not possible to give an exact figure for the annual cost of the relief in its present form. The Tax Expenditures Report 2017 published by my Department includes an estimated cost at €3.75 million per annum.
However I would stress that the figures above cited are very much estimates. The cost in any given year would obviously depend on a number of variables. These include the total of taxpayers claiming and the cost of the subscriptions or fees involved and Revenue do not hold separate data on these.
The Deputy may also be interested in the numbers and tax cost associated with all types of ‘Allowable Expenses’, details of which are given in Revenue’s ‘Cost of Tax Expenditures’ publication available at:
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
