Written Answers Nos. 202 - 227
202. Deputy John Curran asked the Minister for Finance if he will report on the work and public consultation in 2018 with the Department of Public Expenditure and Reform, the Department of Housing, Planning and Local Government and the Revenue Commissioners regarding local property tax; when the review will be completed and published; and if he will make a statement on the matter. [33188/18]
Amharc ar fhreagraIn January of this year, I announced a review of the Local Property Tax (LPT) which is looking in particular at the impact on LPT liabilities of property price developments. In that regard the review underway will be informed by the desirability of achieving relative stability, both over the short and longer terms, in LPT payments of those liable for the tax and provide clear direction on the likely payments faced by households in 2020. The review included a consultation process to enable all interested parties and individuals to submit their views on the future of the LPT.
The purpose of the review is to inform me in relation to any actions I may recommend to Government concerning the overall yield from LPT and its contribution to total tax revenue. I look forward to seeing the outcome of the review around the end of August of this year.
203. Deputy Michael McGrath asked the Minister for Finance if he has been provided with a copy of a document (details supplied); if the proposals contained therein are under consideration in the context of budget 2019; and if he will make a statement on the matter. [33205/18]
Amharc ar fhreagraI have not received a copy, nor is my Department aware, of the document to which the Deputy refers.
However, if the Deputy wishes to provide me with further information on the matter, I will have it followed up.
204. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering the personal pay-as-you-earn and earned income credits by 1.43% per €1,000 on individual income between €100,000 and €170,000 per year, resulting in no entitlement to these tax credits when income is in excess of €170,000; and if he will make a statement on the matter. [33207/18]
Amharc ar fhreagra205. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the single personal, that is, no taper for married portion of credit entitlements €1,650 pay as you earn and earned income credits, by 1.43% per €1,000 on individual income between €100,000 and €170,000 per year, resulting in no entitlement to these tax credits when income is in excess of €170,000; and if he will make a statement on the matter. [33208/18]
Amharc ar fhreagra206. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is in excess of €140,000; and if he will make a statement on the matter. [33209/18]
Amharc ar fhreagra207. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2% per €1,000 on individual income between €100,000 and €150,000 per year, resulting in no entitlement to these tax credits when income is in excess of €150,000; and if he will make a statement on the matter. [33210/18]
Amharc ar fhreagra208. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the PAYE and earned income credit by 5% per €1,000 on individual income between €100,000 and €120,000 per year, resulting in no entitlement to these tax credits when income is in excess of €120,000; and if he will make a statement on the matter. [33211/18]
Amharc ar fhreagra212. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the PAYE credit and earned income credit from income in excess of €80,000, a reduced credit, by 5% per €1,000, for gross income between €80,000 and €100,000 and a 0% credit on gross income in excess of €100,000. [33215/18]
Amharc ar fhreagraI propose to take Questions Nos. 204 to 208, inclusive, and 212 together.
I am advised by Revenue that the yields from tapering the specified credits at the various thresholds as set out by the Deputy are given in the following tables.
|
Taper out of credits at incomes between €100,000 and €170,000 at a rate of 1.43% per €1,000: |
First Year €m |
Full Year €m |
|
PAYE |
146 |
164 |
|
Personal |
241 |
292 |
|
Earned Income Credit |
4.5 |
8.0 |
|
Total |
392 |
464 |
|
Taper out of credits at incomes between €100,000 and €170,000 (for single and widowed) at a rate of 1.43% per €1,000: |
First Year €m |
Full Year €m |
|
PAYE |
146 |
164 |
|
Personal (Single + Widowed only) |
18 |
22 |
|
Earned Income Credit |
4.5 |
8.0 |
|
Total |
169 |
194 |
|
Taper out of credits at incomes between €100,000 and €140,000 at a rate of 2.5% per €1,000: |
First Year €m |
Full Year €m |
|
PAYE |
190 |
214 |
|
Personal |
303 |
366 |
|
Earned Income Credit |
6.4 |
11.5 |
|
Total |
499 |
592 |
|
Taper out of credits at incomes between €100,000 and €150,000 at a rate of 2% per €1,000: |
First Year €m |
Full Year €m |
|
PAYE |
173 |
194 |
|
Personal |
279 |
338 |
|
Earned Income Credit |
6.1 |
10.8 |
|
Total |
458 |
543 |
|
Taper out of credits at incomes between €100,000 and €120,000 at a rate of 5% per €1,000: |
First Year €m |
Full Year €m |
|
PAYE |
236 |
265 |
|
Earned Income Credit |
7.4 |
13.1 |
|
Total |
243 |
278 |
|
Taper out of credits at incomes between €80,000 and €100,000 at a rate of 5% per €1,000: |
First Year €m |
Full Year €m |
|
PAYE |
403 |
453 |
|
Earned Income Credit |
10 |
18 |
|
Total |
413 |
471 |
I am informed by Revenue that the data provide the cost of tapering on a taxpayer unit basis (married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one tax unit). It is not possible to provide this costing on an individual taxpayer basis.
These estimates have been generated by reference to 2018 incomes as calculated on the basis of actual data for the year 2015, the latest year for which returns are available, adjusted as necessary for income, self-employment and employment trends in the interim. The estimates are provisional and may be revised. It should be noted that the above estimates do not take account of any behavioural or other impacts that might arise upon implementation of the measures costed.
209. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the PAYE and earned income credit by 5% per €1,000 on individual income between €100,000 and €120,000 per year, resulting in no entitlement to these tax credits when income is in excess of €120,000, coupled with an additional USC rate (details supplied); and if he will make a statement on the matter. [33212/18]
Amharc ar fhreagra210. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is in excess of €140,000, coupled with an additional USC rate (details supplied); and if he will make a statement on the matter. [33213/18]
Amharc ar fhreagra211. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2% per €1,000 on individual income between €100,000 and €150,000 per year, resulting in no entitlement to these tax credits when income is in excess of €150,000, coupled with an additional USC rate (details supplied); and if he will make a statement on the matter. [33214/18]
Amharc ar fhreagraI propose to take Questions Nos. 209 to 211, inclusive, together.
I am advised by Revenue that the yields associated with the introduction of both a tapering of credits together with an additional rate of USC at various levels and rates as proposed by the Deputy are provided in the following tables. The additional rate of USC is applied as a surcharge on income over the specified levels, in addition to the standard USC rate of 8%.
|
Tapering of PAYE and Earned Income credits plus additional USC rate, at income levels in excess of €120,000, of: |
First Year €m |
Full Year €m |
|
2% |
403 |
496 |
|
3% |
482 |
605 |
|
4% |
562 |
714 |
|
5% |
642 |
823 |
|
6% |
722 |
932 |
|
7% |
802 |
1,041 |
|
Tapering of PAYE, Personal and Earned Income credits plus additional USC rate, at income levels in excess of €140,000, of: |
First Year €m |
Full Year €m |
|
2% |
638 |
785 |
|
3% |
708 |
881 |
|
4% |
777 |
978 |
|
5% |
847 |
1,074 |
|
6% |
917 |
1,170 |
|
7% |
986 |
1,267 |
|
Tapering of PAYE, Personal and Earned Income credits plus additional USC rate, at income levels in excess of €150,000, of: |
First Year €m |
Full Year €m |
|
2% |
589 |
726 |
|
3% |
655 |
817 |
|
4% |
720 |
908 |
|
5% |
786 |
1,000 |
|
6% |
852 |
1,091 |
|
7% |
917 |
1,183 |
I am informed by Revenue that the data above provides the cost of tapering on a taxpayer unit basis (married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one tax unit). It is not possible to provide this costing on an individual taxpayer basis.
These estimates are generated on estimated incomes in 2018, using latest actual data for the year 2015, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised.
It should be noted that the above estimates do not take account of any behavioural or other impacts that might arise upon implementation of the measures costed.
213. Deputy Michael McGrath asked the Minister for Finance his views on the view of ECB President, Mr. Mario Draghi, that commercial real estate here is vulnerable to a fall in value; if the Central Bank is giving consideration to imposing lending caps to apply to non-bank lenders to the commercial real estate sector; and if he will make a statement on the matter. [33254/18]
Amharc ar fhreagraMy Department and the Central Bank continue to closely monitor developments in the commercial real estate sector. According to data collected by MSCI/IPD, there has been a moderation in capital value growth in the market, with capital values growing by 2.1% on an annual basis to Q1 2018.
This moderation is due to the strong levels of construction activity over recent years, particularly in Dublin, with continued investment in the pipeline. According to CBRE, at the end of Q2 2018 there were 31 office schemes under construction in Dublin city centre, extending to more than 370,000m2. Although such levels of investment are strong, there is thus far no reason to suggest that this investment is speculative or poses a clear risk to financial stability. For example, according to CBRE 54 per cent of office space due to be completed in 2018 is pre-let and indications are that a substantial proportion of the pipeline is similarly pre-let.
Ireland has seen a strong level of international investment in its commercial real estate sector since 2013. Much of this investment has been in the form of non-bank lending. Given the requirement for domestic banks to reduce their exposure to the sector in the aftermath of the crisis, the absence of such investment would have meant very little activity. Foreign investment sped up the recovery in the market and helped the economy recover more generally.
While a higher level of foreign investment and non-bank funding can contribute to a greater dispersal of risks, it can also lead to increased vulnerability to changing international financing conditions. Recent research by the IMF suggested there was a high level of synchronicity between Irish and international commercial real estate markets. Interestingly, the period in which the research was carried out covered both the pre- and post- crisis period, suggesting there was a relatively high degree of synchronicity irrespective of the source of investment.
The Central Bank is engaged in the continuous monitoring of developments in the commercial real estate market – with a particular emphasis on increasing understanding of the investor base, funding sources, exposures and business models of banks and other financial institutions, as well as the interconnectedness of the market here with other markets across Europe. Work is on-going to address data gaps both domestically and at a European level, which will bolster authorities’ analysis and monitoring of the market.
Ultimately, the non-bank, cross-border elements of recent commercial property investment complicates the adoption of macroprudential measures in one jurisdiction, to effectively target the source of any related systemic risk. The investigation of whether new macroprudential instruments are required and need to be implemented is part of the ongoing discussion of these matters at the European and national level. Amongst the factors being considered is the regulatory perimeter of domestic and EU authorities and whether effective measures can be addressed to market participants outside those perimeters.
In recognition of this, as well as an acknowledgement of the importance of the commercial real estate sector to the economy, the Department of Finance and the Central Bank will continue to closely monitor activity in the sector.
214. Deputy Pearse Doherty asked the Minister for Finance his views on whether increases in the price of oil constitute a threat to growth in the economy; and if he will make a statement on the matter. [33270/18]
Amharc ar fhreagraIn general, as an energy importer Ireland has benefitted from the steep fall in oil prices since 2014. While oil prices have picked up over the past twelve months, they remain well below their recent peak.
As of June this year, the price of Brent crude oil had increased by around 60 per cent, to c. $76, since June 2017. While oil prices were expected to increase this year, and this is reflected in my Department’s most recent economic forecasts published as part of the 2018 Stability Programme Update, current levels are higher than anticipated.
Despite the recent increases, oil prices in June were still around 32 per cent lower in dollar terms, compared to where they were in June 2014. Nevertheless, increases in oil prices could pose a risk to the economy’s growth prospects inter alia through adversely affecting consumer spending power and corporate profitability. However, it should be noted that consumer price inflation in Ireland remains subdued, as it has been for the past five years, despite the recent strong positive contribution from energy products.
Notwithstanding the increase in oil prices this year, a number of indicators suggest that the strong momentum in the economy has continued into 2018. For instance, data for the first quarter show that GDP increased by 9.1 per cent on an annual basis. While the economy faces a number of risks at present, the prudent economic and fiscal policies implemented over recent years have placed Ireland in a stronger position to weather any shock which may materialise including an oil shock. This is why the Government will continue to implement prudent budgetary policies.
215. Deputy Niall Collins asked the Minister for Finance if advice and assistance can be provided to a person (details supplied); and if he will make a statement on the matter. [33276/18]
Amharc ar fhreagraThere are certain legislative and regulatory provisions governing the provision of residential mortgage credit in Ireland to consumer borrowers. One of the key measures is the Central Bank of Ireland macro-prudential measures which apply proportionate loan-to-value (LTV) and loan-to-income (LTI) limits to mortgage lending by regulated financial service providers. For principal dwelling home mortgages, the LTI limit is set at 3.5 times gross income and the LTV limit is 90 per cent of the value of the property for first time buyers and 80 per cent for second and subsequent buyers. (Lenders have a certain limited flexibility to exceed these thresholds at their discretion). For buy-to-let mortgages, the LTV limit is 70 per cent of the value of the property (and there is also a discretion available to lenders to provide up to 10 per cent of new lending above this limit). Further information on the macro prudential rules on residential mortgage lending can be found at on the Central Bank website at https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures.
Also the Mortgage Credit Directive (which is transposed into Irish law by the European Union (Consumer Mortgage Credit Agreements) Regulations 2016) provides for some common EU measures in relation to the provision of residential mortgage credit to consumers, including some measures in respect of foreign currency mortgages. (For the purpose of the Directive and transposing Regulations, a foreign currency loan is a mortgage where the credit is denominated in a currency other than that in which the consumer receives the income from which the credit is to be repaid, or is in a currency other than that of the EEA Member State in which the consumer is resident). The Regulations apply to any relevant credit agreement entered into from 21 March 2016 and, in respect of a foreign currency loans, it requires that mortgage lenders must at least ensure that they either (i) provide to the consumer borrower a right (if conditions specified by the creditor are met) to convert the loan into an alternative currency or (ii) there are other arrangements in place (such as risk warnings or limits on the amount the consumer has to pay under the agreement) to limit the exchange rate risk to which the consumer is exposed under the foreign currency credit agreement.
Subject to complying with all relevant legislative and regulatory requirements in relation to the provision of mortgages, it is a matter for lenders to formulate their own mortgage credit lending policies and to make their own individual mortgage lending decisions. Ultimately, the decision on whether or not to provide credit, or the amount of credit to offer, in any particular case is a commercial decision for the individual lender. As Minister for Finance, I would not have a role in such commercial decision making by commercial mortgage lenders.
216. Deputy Robert Troy asked the Minister for Finance if the cost of the vehicle registration tax rebate for electric vehicle purchases will be included in the base for 2022 despite it being scheduled to end in 2021; and if he will make a statement on the matter. [33313/18]
Amharc ar fhreagraThe VRT relief for electric vehicles is available for vehicles registered before 31st December 2021.
As the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
217. Deputy Robert Troy asked the Minister for Finance if he will consult with the head of the Central Bank to confirm the way in which the mortgage accounts of customers who have renegotiated terms and are repaying the mortgage under these terms can be classed as non-performing; the efforts being made to ensure that customers who continue to meet their commitments are protected from the possibility of their accounts being sold on; and if he will make a statement on the matter. [33352/18]
Amharc ar fhreagraSince the establishment of the Single Supervisory Mechanism (SSM) in November 2014, the focus has shifted from reducing mortgage arrears levels to reducing Non-performing Loans (NPLs). This shift in focus has been accompanied by a new strict definition Europe-wide of what constitutes an NPL by the European Banking Authority (EBA) which means that certain restructures are deemed NPL even if customers are meeting the revised payment schedule.
Officials in my Department met with staff of the SSM at the highest level on two occasions since late 2016. I also met Ms Nouy, Chair of the Supervisory Board of the ECB. In the course of these discussions my officials outlined the background and history to the restructuring effort in Ireland and questioned the logic of now classifying some types of restructured loans, including certain split mortgages, as NPL indefinitely. While we have been informed that the SSM is looking into the regulatory treatment of split mortgages across a number of European member states I have no evidence at this point that this categorisation is going to change.
I have been advised by the Central Bank of Ireland that in 2014, the European Banking Authority (EBA) introduced harmonized definitions of forbearance and non-performing for supervisory reporting purposes (referred to as the ITS on forbearance and non-performing exposures).
Per the EBA Implementing Technical Standards on supervisory reporting and the ECB Guidance on non-performing loans, non-performing exposures are those that satisfy either or both of the following criteria:
1. material exposures which are more than 90 days past-due;
2. the debtor is assessed as unlikely to pay its credit obligations in full without realisation of collateral, regardless of the existence of any past-due amount or of the number of days past due.
Exposures should be classified as non-performing and/or forborne if they meet the relevant criteria outlined in the EBA ITS. In relation to curing, paragraph 157 outlines the criteria required for a non-performing forborne exposure to move back to performing status. Restructured NPLs can migrate back to performing when the criteria outlined in the EBA ITS has been satisfied, and it is the bank’s responsibility to conduct that assessment. Depending on the specificities of the restructure, it can take at least a year for a restructured NPL to move back to performing status.
As the Deputy will be aware, most loan agreements include a clause that allows the original lender to sell the loan on to another firm. The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 (“the 2015 Act”) was introduced to fill the consumer protection gap where loans are sold by the original lender to an unregulated firm. Under the 2015 Act, if the firm who bought loans from the original lender is an unregulated firm, then the loans must be serviced by a ‘credit servicing firm’ which is regulated by the Central Bank. Credit Servicing Firms are firms that manage or administer credit agreements such as mortgages or other loans on behalf of unregulated entities.
Credit servicing firms must act in accordance with the requirements of Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers, whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale, including under the various statutory Codes of Conduct issued by the Central Bank such as the Consumer Protection Code 2012, Code of Conduct on Mortgage Arrears 2013, and the SME Regulations. Contractual terms are not changed by the sale of the loan.
Provision 3.11 of the Central Bank’s Consumer Protection Code 2012 (the Code) requires that, where a regulated lender intends to transfer all or part of its ‘regulated activities’ to another regulated entity, it must provide advance notification to both the Central Bank and affected consumers. Specifically, a lender must provide a consumer with at least 2 months’ notice before transferring all or part of its loan book covered by the Code to another person, including where the transferee is an unregulated entity. Where the transferee is an unregulated entity, the Code requires that the regulated lender also notify the consumer of the name of the regulated entity that will be ‘servicing’ the loan for the unregulated entity. In the event that there is a change in the credit servicing firm, the existing credit servicing firm must also notify the Central Bank and the consumer in advance, in accordance with the timelines set out under Provision 3.11 of the Code. Furthermore, I understand that the Central Bank expects all affected consumers to be informed of the term of their loan agreement which allows the loan to be sold and the identity and address of the new owner.
The Deputy will be aware that a Private Member’s Bill now titled the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2018 was considered by Select committee on 12 July. My officials worked with Deputy McGrath and other stakeholders to develop the Bill as initiated. This Bill will require that loan owners are regulated by the Central Bank. I expect that Report Stage will be taken after the summer recess.
I have also asked the Central Bank to carry out a review of the Code of Conduct on Mortgage Arrears (CCMA) to ensure it remains as effective as possible and for the review to be completed as soon as possible.
218. Deputy Robert Troy asked the Minister for Finance if during a recent appearance before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach a bank (details supplied) confirmed that family homes would not be included in the proposed mortgage portfolio sale; if so, the actions he or the committee has taken to confirm that this will be the case; if the committee has powers to demand an explanation or confirmation from the bank regarding this statement; and if he will make a statement on the matter. [33353/18]
Amharc ar fhreagraI am not aware of Permanent TSB confirming at its recent appearance before the Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach that family homes would not be included in the bank's proposed mortgage portfolio sale - Project Glas. The bank CEO did, however, confirm in his opening statement that loans restructured by way of a split mortgage solution had been removed from the sale and perhaps this is what the Deputy is referring to.
In relation to its powers in general, the Committee is entitled to request an explanation or confirmation from any of the banks on any matter and I would expect such a request to be dealt with to the satisfaction of the Committee.
219. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 170 of 4 July 2018, the name of the large professional services firm hired to carry out the investigation. [33435/18]
Amharc ar fhreagraI am advised by the Special Liquidators that Deloitte were engaged to complete this investigation. This consisted of Deloitte completing an independent review and deep dive forensic analysis to:
- Assess the controls in place to restrict access to voice recording data throughout its lifecycle across IBRC systems.
- Ascertain if there was any evidence that the voice recordings, which entered into the public domain in June 2013 came directly from IBRC during the period of the Special Liquidation.
- Apply a targeted forensic review which was limited to a small number of custodians/PCs determined to have had potentially significant access to the voice recordings.
While the report identified a narrow list of individuals who had access to all of the information which appeared in the public domain, the conclusion of the review was that there was no evidence to suggest that any leakage of voice recordings occurred directly from IBRC systems since the date of the Special Liquidation.
220. Deputy Mick Wallace asked the Minister for Finance his views on the fact that a company (details supplied) has received €25 million in State funding from the National Treasury Management Agency via the Irish Strategic Investment Fund, ISIF, while in 2012 the same company's loan book was sold via a refinancing transaction for an average discount of 92%; if he is satisfied that the State should be financing companies that have previously received such write-downs; his plans to discuss this €25 million financing provided by ISIF to the company; and if he will make a statement on the matter. [33436/18]
Amharc ar fhreagraThe NTMA have advised me that the Ireland Strategic Investment Fund (ISIF) committed €25 million of equity capital into a newly established fund which will invest in residential property in the Irish Private Rented Sector. Avestus Capital Partners have been appointed as the investment advisor to the fund. ISIF’s equity capital will be exclusively used to forward purchase newly developed rental properties and support the construction of new homes in Ireland.
All ISIF investment proposals are subject to thorough due diligence before the ISIF commits its capital, as was the case with this particular investment.
221. Deputy Thomas P. Broughan asked the Minister for Finance the estimated total level of tax expenditure annually to budget 2018; and if he will make a statement on the matter. [33483/18]
Amharc ar fhreagra222. Deputy Thomas P. Broughan asked the Minister for Finance the breakdown annually of the current level of tax expenditures down to budget 2018; and if he will make a statement on the matter. [33484/18]
Amharc ar fhreagraI propose to take Questions Nos. 221 and 222 together.
The figures sought by the Deputy, i.e. “to budget 2018”, which I take as meaning to 10 October 2017 when I produced Budget 2018, are not available.
However, my Department has for the last three years (2015, 2016 and 2017) produced a “Report on Tax Expenditures” in conjunction with the Budget for the following year.
As well as setting out the results of a number of reviews that were completed since the previous budget, it outlines in tabular form the fiscal impact of the range of tax expenditures as required under the EU Budgetary Framework Directive, through providing a list of the extant tax expenditures and where available the number availing of, and revenue forgone in respect of, each for the two most recently available years.
The most recent of these, the "Report on Tax Expenditures 2017" (which was published on 10 October 2017), is available on the Department of Finance website in the “Related Documents” section of the Budget 2018 area at: http://www.budget.gov.ie/Budgets/2018/Documents/Report_on_Tax%20_Expenditures_2017.pdf)
The figures in the 2017 report cover 2015 and 2016 (where available).
The two previous such reports are also to be found on my Department’s website.
It is intended that the Report on Tax Expenditures for 2018 will be published on Budget day this year, and will contain figures (where available) for 2016 and 2017.
I would also draw the Deputy’s attention to a once off paper on tax expenditures that my Department prepared for the 2017 Tax Strategy Group, which looks at tax expenditures as a concept – https://www.finance.gov.ie/wp-content/uploads/2017/07/TSG-17-13-Tax-Expenditures-PL.pdf.
223. Deputy Thomas P. Broughan asked the Minister for Finance the expected yield if the tax relief on all private pensions was lowered to the standard rate; and if he will make a statement on the matter. [33485/18]
Amharc ar fhreagraI am advised by Revenue that the Ready Reckoner available on the Revenue Statistics webpage at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx shows, on page 11, the estimated yield from reducing the maximum tax relief available on private pension contributions to various rates, including the rate mentioned by the Deputy.
224. Deputy Thomas P. Broughan asked the Minister for Finance the expected yield if the tax refund element of research and development tax credits was removed; and if he will make a statement on the matter. [33486/18]
Amharc ar fhreagra275. Deputy Michael McGrath asked the Minister for Finance the annual cost of the research and development tax credit for the previous five years including 2017; the number of companies that have availed of the scheme in each of these years by multinational companies and SMEs; and if he will make a statement on the matter. [33921/18]
Amharc ar fhreagra339. Deputy Joan Burton asked the Minister for Finance the value of payable refundable research and development tax credits paid out by the Revenue Commissioners in each of the years 2009 to 2017 to companies that did not pay corporation tax in those years; the estimated refunds or payable amounts to be paid out in 2018; the cost of the research and development tax credit in each of those years; and if he will make a statement on the matter. [34873/18]
Amharc ar fhreagra340. Deputy Joan Burton asked the Minister for Finance the outstanding liability from refundable payable research and development credits; and if he will make a statement on the matter. [34874/18]
Amharc ar fhreagra341. Deputy Joan Burton asked the Minister for Finance the projected savings in 2019 if the research and development tax credit was no longer refundable or payable; and if he will make a statement on the matter. [34875/18]
Amharc ar fhreagra342. Deputy Joan Burton asked the Minister for Finance the number of companies that claimed payable refundable research and development tax credits in each of years 2009 to 2017 and to date in 2018; the highest refund paid out in each year; the average value of a refund in each year, in tabular form; and if he will make a statement on the matter. [34876/18]
Amharc ar fhreagra343. Deputy Michael McGrath asked the Minister for Finance the full-year cost of allowing up front refunds under the research and development tax credit for young SME companies four years old or younger; and if he will make a statement on the matter. [34894/18]
Amharc ar fhreagra346. Deputy Michael McGrath asked the Minister for Finance the full-year cost of increasing the portion of expenses allowed for deduction under the research and development tax credit from 25% to 30% for SME companies; and if he will make a statement on the matter. [34897/18]
Amharc ar fhreagraI propose to take Questions Nos. 224, 275, 339 to 343, inclusive, and 346 together.
I am advised by Revenue that information in respect of the annual cost of the Research and Development (R&D) credit is available at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx for all years up to 2016.
The document includes information in respect of refundable tax credits but estimates of refunds for future years are not available. Information in respect of outstanding liability is also not available but it may be useful for the Deputy to be aware that the document includes the amounts converted to first, second and third payable credit for all years up to 2016.
|
Year |
Total Exchequer Cost(€m) |
Number of Companies |
|
2009 |
216 |
900 |
|
2010 |
224 |
1,172 |
|
2011 |
261 |
1,409 |
|
2012 |
282 |
1,543 |
|
2013 |
421 |
1,576 |
|
2014 |
553 |
1,570 |
|
2015 |
708 |
1,535 |
|
2016 |
670 |
1,506 |
It is not possible to accurately show the yield if the R&D tax credit was no longer payable as information in respect of current expenditure is not available. On the basis of claims from 2016 tax returns, it is tentatively estimated that the full year gain from abolishing the refundable credits aspect of the research and development tax credit could be in the region of €240m. However, the information in respect of payable credits in the document may be of interest to the Deputy.
Due to Revenue’s obligation to observe confidentiality for taxpayer information it is not possible to show the highest refund. The average refund associated with the refundable credit aspect of the relief for the years 2010 to 2016, the latest years available, is as shown in the following table.
|
Year |
Average Refund € |
|
2010 |
91,100 |
|
2011 |
115,450 |
|
2012 |
127,900 |
|
2013 |
215,650 |
|
2014 |
305,400 |
|
2015 |
349,450 |
|
2016 |
230,480 |
It is not possible to show the full year cost of allowing up-front refunds under the Research and Development tax credit for young SME companies four years old or younger as information in respect of future expenditure by young SME companies is not available.
Similarly it is not possible to show the cost of increasing the portion of expenses allowed for deduction under the Research and Development tax credit from 25% to 30% for SME companies as information in respect of future expenditure by SMEs is not available. However I am advised by Revenue that, based on claims in respect of the research and development tax credit included in 2016 tax returns, the estimated tax cost of increasing the rate to 30% for SMEs could be in the region of €30 million in a full year. This cost assumes no behavioural change.
It may be of interest to the Deputy to note that the published document on the Revenue website shows the tax costs for all years by number of employees. Employee numbers can be used as a measure as to whether or not a business is an SME, as a business with less than 250 employees is generally considered to be an SME.
225. Deputy Thomas P. Broughan asked the Minister for Finance the estimated annual cost of reintroducing tax relief on private rented accommodation; if the reintroduction of the measure is being examined; and if he will make a statement on the matter. [33488/18]
Amharc ar fhreagraTax relief on private rented accommodation was available to those paying for private rented accommodation, including rent paid for flats, apartments or houses. It did not include rent paid to local authorities. The credit was only available to persons renting on 7 December 2010. This tax credit ceased to be available after 31 December 2017.
I am advised by Revenue that, as the rent relief tax credit is in the process of being phased out (only back claims can now be processed), and no new claimants have qualified for the relief since 2010, tax returns do not provide a reliable basis for Revenue to accurately predict either the numbers of tenants that could be eligible to claim a rent credit were it to be re-introduced post 2017 for all tenants, or the degree to which potential claimants could absorb the full amount of the credit. Therefore, there is no reliable basis available to Revenue on which to estimate the potential cost of a rental tax credit reintroduction.
I am also advised by Revenue that the number who availed of the rent relief tax credit and the associated cost to the Exchequer are as follows:
|
Year |
Number of Claimants |
Cost €million |
|
2015 |
135,600 |
21.4 |
|
2014 |
143,900 |
29.5 |
|
2013 |
153,100 |
37.9 |
|
2012 |
166,400 |
48 |
|
2011 |
179,600 |
66.5 |
|
2010 |
189,000 |
82.8 |
|
2009 |
196,900 |
85.9 |
|
2008 |
222,100 |
96.5 |
|
2007 |
206,000 |
82.1 |
|
2006 |
171,800 |
64 |
|
2005 |
144,500 |
48.1 |
|
2004 |
118,500 |
33 |
It may be of assistance to the Deputy to note that, according to Census 2016 data, the private rented sector amounts to approximately 310,000 units (for comparison, in 2010 the rent relief tax credit cost €82.8 million in respect of 189,000 claimants). However, all of the individuals recorded on the Census as renting these 310,000 units may not qualify for rent relief tax credit or be able to absorb the relief in full if it were available.
226. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield from the introduction of a third rate of income tax at 45%, 48% and 50%, respectively, on incomes of over €100,000; and if he will make a statement on the matter. [33505/18]
Amharc ar fhreagra227. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield from the introduction of a third rate of income tax at 45%, 48% and 50%, respectively, on incomes of over €120,000; and if he will make a statement on the matter. [33506/18]
Amharc ar fhreagraI propose to take Questions Nos. 226 and 227 together.
I am advised by Revenue that the Ready Reckoner, which is available on the Revenue website at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx, on page 5, gives the yield that would be generated from the introduction of a third rate of Income Tax at various income levels, including those requested by the Deputy.
While the exact rates mentioned by the Deputy are not given directly, the yield from these may be estimated on a straight-line or pro-rata basis from the figures given in the Ready Reckoner.
