Written Answers Nos. 155-172
155. Deputy Pearse Doherty asked the Minister for Finance the revenue raised by introducing a digital services tax of 1%, 2% and 5% respectively on digital services firms with turnover of €50 million or over here and at least €750 million globally. [48962/18]
Amharc ar fhreagraIt is assumed that the scope and design of the Digital Services Tax (“DST”) to which the Deputy refers would mirror those of the European Commission’s initial DST proposal.
The Commission, in an impact assessment of its proposed DST – which applies at a 3% rate – estimated that the measure would yield approximately €5 billion per annum across all EU Member States. If it is assumed that Ireland would receive a portion of the yield in proportion to Ireland’s population, the estimated annual yield in Ireland from the EU proposal would be €45 million.
The impact of the DST if the rate were varied can be estimated on a pro rata basis. The table below shows the estimated yield side.
|
Rate |
Estimated DST Receipts |
|
1% |
€15 million |
|
2% |
€30 million |
|
3% |
€45 million |
|
5% |
€75 million |
When considering the impact of a DST potentially introduced across the EU a whole, it is important to note that DST paid in other countries is likely to be deductible in calculating profits subject to corporation tax (“CT”) and this would reduce Ireland’s CT receipts disproportionately. Based on an analysis carried out by the Revenue Commissioners, introducing the EU DST at a rate of 3% would reduce Ireland’s CT receipts by up to €160 million per annum, assuming full deductibility from taxable corporate profits for DST paid in the EU by companies taxable in Ireland. These findings were presented to the Committee on Finance, Public Expenditure and Reform and the Taoiseach in May of this year.
156. Deputy Pearse Doherty asked the Minister for Finance the revenue to be raised by introducing a 1%, 2% and 5% levy on products with packaging which does not have at least 30%, 40% and 50% recyclable material, in tabular form. [48963/18]
Amharc ar fhreagra157. Deputy Pearse Doherty asked the Minister for Finance the revenue raised of introducing a latte levy of 5 cent, 10 cent and 25 cent on each single use coffee cup used or distributed in a commercial setting. [48964/18]
Amharc ar fhreagraI propose to take Questions Nos. 156 and 157 together.
I am informed that the information available to the Office of the Revenue Commissioners from tax returns or other sources does not provide detail on numbers of single use cups or the recyclable content of packaging. Accordingly, the revenue raising estimations requested by the Deputy cannot be provided by Revenue.
158. Deputy Pearse Doherty asked the Minister for Finance the revenue raised by standardising all pension tax relief at the 20% rate. [48965/18]
Amharc ar fhreagraI am informed by Revenue that the estimated savings to the Exchequer that would arise as a result of decreasing the rate or ceiling for occupational pension schemes, RACs and PRSAs to 20% is outlined on page 11 of the Revenue Ready Reckoner, at https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.
Based on these estimates, standardizing the relief at 20% and maintaining the current €115,000 ceiling would yield €319m.
159. Deputy Pearse Doherty asked the Minister for Finance the cost of equalising the earned income credit with the PAYE credit. [48966/18]
Amharc ar fhreagraI am advised by Revenue that the estimated cost of equalising the Earned Income Credit with the PAYE credit would be €72 million in a full year.
The estimated costs for increases to the Earned Income Credit are available on page 6 of the Revenue Ready Reckoner which is available on the Revenue website: https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.
160. Deputy Pearse Doherty asked the Minister for Finance the cost in budgetary terms of retaining mortgage interest relief at the level it will be at from the 1 January for the next three years. [48967/18]
Amharc ar fhreagraIt is presumed the Deputy is referring to mortgage interest relief for persons with a qualifying mortgage loan on a principal private residence. I am advised by Revenue that the estimated cost of the relief in 2019 is €78m. Therefore, it can also be estimated that the cost of retaining the relief at 2019 levels for the following three years would result in a similar annual cost. However, this does not take account of any reduction in the number of qualifying loans over the three-year period.
161. Deputy Pearse Doherty asked the Minister for Finance the savings that would be expected if the special assignee relief programme, SARP, scheme was abolished. [48968/18]
Amharc ar fhreagraBefore addressing the question put down by the Deputy, it would be useful to recall the background to the Special Assignee Relief Programme (SARP) and the circumstances within which the relief operates.
SARP was introduced in Budget 2012 as part of a strategy to promote Foreign Direct Investment into Ireland, and to allow us to compete internationally to attract highly skilled and mobile executives who act as key decision makers within organisations.
The measure provides income tax relief on a portion of income earned by employees, who are assigned by their employer to work in Ireland, and who previously worked abroad for that employer for a minimum of six months. There is no exemption or relief from USC and PRSI is payable where the individual is not liable to social insurance contributions in the home country.
It should also be noted that individuals who benefit from SARP make a substantial contribution to the exchequer in terms of income tax, USC and PRSI which would not otherwise arise if these individuals were not located in Ireland.
The existence of an incentive like SARP is an acknowledgement that we are competing on a global basis for highly skilled and mobile executives. Given the mobility of these individuals, and the existence of similar assignee schemes in competitor jurisdictions, it is possible that if SARP was abolished these individuals would not have chosen to locate in Ireland.
The 2016 annual Revenue report on SARP shows that for the years 2012 to 2016 (the most recent year for which data are available) the costs of the measure were as follows:
|
Tax Cost2012 |
Tax Cost2013 |
Tax Cost 2014 |
Tax Cost2015 |
Tax Cost2016 |
|
€0.1 million |
€1.9 million |
€5.9 million |
€9.5 million |
€18.1 million |
In relation to the €18.1 million tax cost for 2016, it is also worth noting that SARP directly generated 793 jobs in that year, which resulted in a very significant tax contribution to the exchequer. Employers also reported that an extra 477 employees had been employed by their companies in 2016, and 607 employees retained by companies in 2016 for which the exchequer benefited directly from additional tax from these associated jobs retained and created through SARP.
In terms of the Deputy's question, it is not clear that there would be any net savings to the Exchequer if the programme was abolished. On the contrary, it may well be the case that there could be a net loss to the Exchequer arising from such a move. As the Deputy is aware, only a proportion of income is disregarded for income tax purposes under SARP and the majority of a person's income remains liable to taxation. Also, as already indicated, USC applies on the full amount of the person's income. It is unclear what proportion of SARP beneficiaries, if any, might remain in the jurisdiction if the measure was withdrawn. Furthermore, such a withdrawal would inevitably have implications for the numbers of SARP-related jobs that would be created in the future and, by extension, the tax revenues that would be associated with those jobs.
As the Deputy is aware, I recently brought forward an amendment to the Finance Bill 2018 to place a ceiling on eligible income for SARP recipients at €1 million. This change will be effective for new entrants to the programme from 1 January 2019 and for existing beneficiaries of the programme from 1 January 2020. In addition, I announced that a full review of SARP will be carried out in 2019. I expect that this exercise will, among other things, afford an opportunity to examine in greater detail the issues raised in the Deputy's question.
162. Deputy Michael Healy-Rae asked the Minister for Finance if recommendations by an organisation (details supplied) will be examined; and if he will make a statement on the matter. [48985/18]
Amharc ar fhreagraAs part of the annual Budgetary and Finance Bill process, all taxes, reliefs and exemptions are subject to on-going review. The Department of Finance produces a TSG paper annually on Capital Taxes. This year's Capital Taxes TSG paper, which can be found at
https://www.finance.gov.ie/wp-content/uploads/2018/07/TSG-18-10-Capital-and-Savings-Taxes-PL.pdf, examined options to change both the CGT rate and the lifetime limit for the Revised Entrepreneur Relief.
Most recent estimates indicate that in the absence of behavioural change each 1% reduction in the rate of CGT was estimated to reduce yield by approximately €36m annually, while the cost to increase the lifetime limit for Revised Entrepreneur Relief to €5m or €15m was estimated at approximately €39m and €50m respectively.
Whilst all taxes are subject to ongoing review, you will appreciate that all policy choices with respect to changes in taxation are made from both a broader policy perspective and in the context of the financial resources available. In light of this, I decided not to amend the rate of Capital Gains Tax or the Revised Entrepreneur Relief as part of Budget 2019, however these matters will again be subject to review during preparations for Budget 2020.
In relation to R&D Tax Credits, the Office of the Revenue Commissioners have advised me that in putting together a claim for the R&D tax credit, companies must have regard to two interlocking parts: the claim must pass the science test (i.e. is the activity a qualifying activity) and the accounting test must be satisfied (i.e. is the amount of the claim correct). Revenue inform me that they have detailed R&D guidance on the operation of the R&D tax credit, for all companies, which is designed to remove some of the uncertainty that companies may have. Furthermore, Revenue advise me that they are currently working on guidance in relation to the level of records that they would expect to see to support a claim for the R&D tax credit. It is their expectation that this new guidance will give all companies greater certainty in advance of submitting a claim for relief.
In February 2017 Revenue issued guidance aimed specifically at micro and small companies, to reduce the administrative burden on SMEs while also ensuring that the credit is granted to bona fide R&D. The aim of this guidance was to give these smaller companies greater clarity on how they could demonstrate to Revenue that their R&D tax credit claim satisfied the “science test”. Where a company spends €200,000 on activities which Enterprise Ireland have looked at and confirmed as R&D, then in most cases Revenue will accept that those activities pass the science test. Revenue may still review that the accounting test has been satisfied.
As Revenue engage independent, case specific, experts where there is uncertainty in respect of whether or not the activities are qualifying R&D activities, any pre-approval would out of necessity be cumbersome and slow, potentially acting as a barrier to companies carrying out R&D. In respect of the accounting test, it is not possible to judge if an amount will be incurred in carrying on R&D until that R&D is actually carried out and that amount is actually incurred. As such, in addition to the difficulty of putting in place pre-approval in relation to the science test, it is not possible to put in place a pre-approval process for the accounting test.
Finally, Revenue advise me that all R&D claims are currently dealt with by their Medium Enterprises Division or Large Cases Division. There is an internal network of experienced R&D auditors from those divisions who meet and share their experiences. Revenue also engage with external stakeholders through the Tax Administration Liaison Committee (TALC), where there is a specific sub-group which looks at R&D issues.
163. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of increasing the personal tax credit for the single, married, and so on credit by €50, €100, €200, €300, €400 and €500, respectively. [49007/18]
Amharc ar fhreagraI am advised by Revenue that costings for increases to personal tax credits can be found in the table on page 6 of the Revenue Ready Reckoner which is available on the Revenue website: https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.
While some of the costs of the increases sought by the Deputy are not displayed in the Ready Reckoner, they can be estimated on a straight-line or pro-rata basis from the costs shown.
For ease of reference, the estimated costings sought by the Deputy, and calculated on the basis of the Ready Reckoner, are set out in the tables below:
|
Personal Tax Credit - Single |
Cost First Year €m |
Cost Full Year €m |
|
€1,700 |
40 |
46 |
|
€1,750 |
80 |
92 |
|
€1,850 |
160 |
184 |
|
€1,950 |
240 |
276 |
|
€2,050 |
320 |
368 |
|
€2,150 |
400 |
460 |
|
Personal Tax Credit - Married |
Cost First Year €m |
Cost Full Year €m |
|
€3,350 |
32.25 |
37.75 |
|
€3,400 |
64.5 |
75.5 |
|
€3,500 |
129 |
151 |
|
€3,600 |
193.5 |
226.5 |
|
€3,700 |
258 |
302 |
|
€3,800 |
322.5 |
377.5 |
|
Widowed Person or surviving Civil Partner (without qualifying child) Credit |
Cost First Year €m |
Cost Full Year €m |
|
€2,240 |
2.95 |
3.5 |
|
€2,290 |
5.9 |
7 |
|
€2,390 |
11.8 |
14 |
|
€2,490 |
17.7 |
21 |
|
€2,590 |
23.6 |
28 |
|
€2,690 |
29.5 |
35 |
|
Single Person Child Carer Tax Credit |
Cost First Year €m |
Cost Full Year €m |
|
€1,700 |
1.6 |
1.85 |
|
€1,750 |
3.2 |
3.7 |
|
€1,850 |
6.4 |
7.4 |
|
€1,950 |
9.6 |
11.1 |
|
€2,050 |
12.8 |
14.8 |
|
€2,150 |
16 |
18.5 |
164. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 158 of 13 November 2018, if the date of 1 January 2019 for removal of flat rate expenses is accurate. [49051/18]
Amharc ar fhreagraI am advised by Revenue that their review of the flat rate expenses regime is ongoing and that it is intended to have the review completed by the end of 2019. Therefore, in the interest of fairness to all sectors and employees currently benefitting from the regime, Revenue has decided that the effective date for implementation of any changes to particular flat rate expenses categories will now be 1 January 2020.
166. Deputy Brendan Smith asked the Minister for Finance when it is planned to implement the outstanding recommendations of the cost of insurance working group; and if he will make a statement on the matter. [49085/18]
Amharc ar fhreagraAs the Deputy is aware, the Cost of Insurance Working Group is in the process of implementing both its Report on the Cost of Motor Insurance and its Report on the Cost of Employer Liability and Public Liability Insurance.
The Report on the Cost of Motor Insurance was published in January 2017, containing 33 recommendations with 71 associated actions. While the Report on the Cost of Employer Liability and Public Liability Insurance was published in January 2018, containing 15 recommendations with 29 associated actions. Both reports contain Action Plans which set out agreed timelines for implementation as well as a commitment that the Working Group will prepare quarterly updates on its progress.
The seventh such update was published earlier this month and can be accessed on the Department of Finance’s website under the ‘Cost of Insurance Working Group’ section. The Deputy may wish to note that this provides an update on the implementation of each recommendation as well as a traffic light indicator on the status of each individual action point, including those with deadlines into the future (19 relating to the Motor Report and 11 relating to the EL/PL Report). The Update shows that of the 78 separate applicable deadlines within the Action Plans of the two Reports to the end of Q3 2018, 62 relate to actions which have now been completed, while substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. I believe this quarterly report outlines the significant amount of work being done to address the cost of insurance problem. In this regard, there has been significant progress on a number of legislative fronts as well as the publication of the second Personal Injury Commission report on benchmarking of awards.
While I acknowledge that some deadlines have yet to be met, the general direction of travel is positive and this is reflected in the most recent CSO figures (for October 2018) which indicates that private motor insurance premiums have decreased by 22.9% since peaking in July 2016. In this regard, I can assure the Deputy that the implementation of the recommendations remains a priority for the Government and I remain confident that the continued implementation of them cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, should achieve the objectives of delivering fairer premiums for consumers and a more stable and competitive insurance market.
167. Deputy Joan Burton asked the Minister for Finance if the European Commission has been in contact with his Department about ongoing state aid investigations relating to the tax arrangements of companies resident here other than the Commission's completed investigation into a company (details supplied); the number of such investigations to which his attention has been drawn; and the specific issues involved. [49232/18]
Amharc ar fhreagraSince 2014, the European Competition has been engaged in an “information gathering exercise” and have sought information from all Member States in relation to certain corporate tax practices and regimes.
It is understood that the Commission has examined over 1,000 rulings across national tax jurisdictions. This exercise has been ongoing since this time and, of course, has not been limited to Ireland.
Ireland has always co-operated in respect of these requests and will continue to do so.
It is not appropriate for me to comment on the nature of any such requests as any enquiries made are confidential between Ireland and the Commission.
168. Deputy Tony McLoughlin asked the Minister for Finance if he will seek from the Revenue Commissioners' customs department a progress report on developments on combatting the importation of drugs in the border midlands area since an October 2017 meeting with Houses of the Oireachtas representatives; the number of joint policing committee meetings customs has attended since October 2017 in counties Sligo, Leitrim, Donegal and Mayo; and if he will make a statement on the matter. [49249/18]
Amharc ar fhreagraI am advised by Revenue that since October 2017 it has not been notified of, or invited to any Joint Policing Committee (JPC) meetings in Sligo, Leitrim, Donegal or Mayo. Revenue has reiterated assurances previously given that officials will participate in meetings regarding the importation of illicit drugs, where requested to do so by the Joint Policing Committees.
I am assured that Revenue is very aware of its responsibilities and the frontline role that it carries out in protecting society from the importation of illicit drugs. Revenue is active in targeting and combating drugs smuggling and works closely with other State agencies (particularly an Garda Síochána) acting against the illicit drugs trade. As part of Revenue’s risk focused approach to combating the importation of illicit drugs, the potential for drug smuggling at harbours and inlets along the coastline is evaluated, monitored and acted upon on an ongoing basis. The work is also informed by Revenue’s analysis of national and international seizure trends, frequency of traffic, routes and other risk indicators.
Revenue’s work is supported by Revenue’s Customs Drugs Watch programme which provides a confidential reporting mechanism to the public to report any suspicious activity on a 24/7 free phone facility at 1800 295 295.
If the Deputy has specific information that could assist Revenue in its targeting of any illegal activity, the information should be forwarded to Revenue for investigation.
169. Deputy Brendan Ryan asked the Minister for Finance if the Revenue Commissioners will re-examine the tax calculation for a person (details supplied) and have it re-assessed in view of the fact that their spouse receives a pension separately and not as a qualified adult with reference to supporting documentation; if this will be amended as soon as possible; and if he will make a statement on the matter. [49250/18]
Amharc ar fhreagraI am advised by Revenue that the person in question receives a Contributory State pension, which includes an additional amount in respect of a Qualifying Adult Dependant.
Although the Qualifying Adult portion of the pension is paid directly to the person’s spouse/civil partner/co-habitant, the payment is premised on there being an entitlement to the pension in the first instance. In this regard, Section 112 of the Social Welfare Consolidation 2005 Act specifies that the Qualifying Adult portion of a pension is an ‘increase’ that is payable in respect of a spouse/civil partner/co-habitant who is being financially maintained and whose income is not greater than a specified amount.
The taxation position of the Qualifying Adult portion is set out in Section 126(2B) of the Taxes Consolidation Act 1997, which provides that any ‘increase’ is treated as if it arises to and is payable to the person who qualifies for the pension (the beneficiary). As a consequence, the income is treated as income of the beneficiary and not the Qualifying Adult and there is no entitlement to any additional Employee Tax Credit nor an increase in the Standard Rate Band.
For these reasons the person in question is correctly assessed for tax and there is no further credits due to the person.
170. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied); and if he will make a statement on the matter. [49255/18]
Amharc ar fhreagraAt the outset, it is important to note that as Minister for Finance, I do not have a role in the regulation or availability of car rental services, including the durations for which companies may choose to offer it.
Notwithstanding this, my officials contacted Insurance Ireland on the basis of the details supplied. It advised that motor insurance is generally sold as an annual contract in Ireland but that in relation to a customer wishing to rent a car, it advised that generally, the cost of motor third party liability insurance is included in the overall car rental price.
In addition, you might like to note that according to the Competition and Consumer Protection Commission (CCPC), if a person has a complaint about a specific car rental company, they should initially contact the rental company in writing and go through its own complaint handling process to conclusion. If the person is not satisfied with the response, they can contact the Car Rental Council of Ireland which has drawn up its own “Code of Best Practice for the Car Rental Industry in Ireland” and runs a complaints procedure for member companies.
171. Deputy Kevin O'Keeffe asked the Minister for Finance the status of tax credits for a person (details supplied). [49295/18]
Amharc ar fhreagraI am advised by Revenue that the matter in question, which requires interaction with another Government Department, is currently being reviewed. It is anticipated that the review will be completed within the next week and Revenue has assured me that it will then make direct contact with the person to discuss the issue.
172. Deputy Paul Kehoe asked the Minister for Finance when the correspondence requested will issue to a person (details supplied); and if he will make a statement on the matter. [49314/18]
Amharc ar fhreagraI am advised by Revenue that the difficulty in this case exists because the person in question is not yet registered (with Revenue) as being self-employed. The registration delay is a consequence of the person having to date failed to complete the necessary documentation.
Revenue has also confirmed that it very recently made direct contact with the person to enquire as to when they would complete the registration process and to offer assistance if required. Following the discussions, the person confirmed that they would complete the process as quickly as possible. As soon as this is done, Revenue will prioritise their application and will provide the required third-party confirmations to which the Deputy is referring.
