Written Answers Nos. 153-172
153. Deputy Catherine Connolly asked the Minister for Finance the estimated amount that would be generated in a full year if the stamp duty on residential properties was increased to 4% on excess over €1 million; and if he will make a statement on the matter. [53268/18]
Amharc ar fhreagraI am advised by Revenue that a Ready Reckoner providing estimated impacts for potential changes to a wide range of taxes and duties is available at www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.
Regarding your query on stamp duty, the Ready Reckoner provides the estimated impact of increasing the rate of Stamp Duty on the excess of considerations on residential properties over €1 million to 4% on page 18.
154. Deputy Catherine Connolly asked the Minister for Finance the estimated amount that would be generated if the 8% USC rate was increased to 9% for earners over €70,044; and if he will make a statement on the matter. [53269/18]
Amharc ar fhreagraI am advised by Revenue that a Ready Reckoner providing estimated impacts for potential changes to a wide range of taxes and duties is available at www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx.
The Ready Reckoner provides, on page 5, the estimated yield associated with changes to the USC rates outlined by the Deputy in her question. The measure would yield an estimated €171 million in a full year.
Please note that the costings for changes to the 8% rate as set out in the Ready Reckoner include those paying the 3% surcharge on non-PAYE income exceeding €100,000 in a year.
155. Deputy Thomas Pringle asked the Minister for Finance the estimated amount that would be generated by reducing the earnings cap for pension contributions from €115,000 to €75,000. [53280/18]
Amharc ar fhreagraI am advised by Revenue that a Ready Reckoner providing estimated impacts for potential changes to a wide range of taxes and duties is available at www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx.
Page 11 of the Ready Reckoner presents an estimate of the yield that would arise from reducing the earnings cap for pension contributions in the manner outlined by the Deputy. According to this data, the estimated yield that would be generated by reducing the earnings cap for pensions contributions to €75,000 would be €85m in a full year.
I would also note that reducing this ceiling would impact only on higher rate tax payers.
156. Deputy Ruth Coppinger asked the Minister for Finance his plans to expand the boundaries of the special regeneration areas under the Living City Initiative scheme; and if he will make a statement on the matter. [53290/18]
Amharc ar fhreagraAs the Deputy is aware, in order to qualify for tax relief under the Living City Initiative, a property must be located wholly within a “special regeneration area”. This condition is provided for by s. 372AAB (1) of the Taxes Consolidation Act 1997 which provides as follows:
"qualifying premises' means a relevant house -
(a) the site of which is wholly within a special regeneration area,"
The special regeneration areas for the Living City Initiative were designated following consultation with the relevant city councils and an independent review by a third party adviser. Specific criteria were set down in respect of the areas which should be included within the remit of the Living City Initiative which were required to be taken into account by the relevant city councils when putting forward the proposed Special Regeneration Areas for each city. In particular, it was stated that the Special Regeneration Areas should be inner city areas which are largely comprised of dwellings built before 1915, where there is above average unemployment and which demonstrate clear evidence of neglect, dereliction and under-use. It was specified that areas which are generally regarded as affluent, have high occupancy rates and which do not require regeneration should not be included in the Special Regeneration Areas.
I have no plans at present to amend the special regeneration zones.
157. Deputy Fergus O'Dowd asked the Minister for Finance if concerns raised in correspondence (details supplied) regarding deferred payments on VAT and customs duty will receive a response; and if he will make a statement on the matter. [53363/18]
Amharc ar fhreagraThe rules governing the European Value Added Tax System for goods and services are contained within the VAT Directive (Council 2006/112/EC). Following the departure of the United Kingdom, the collection of indirect tax revenues on United Kingdom trade would change from operating within current EU legislative frameworks to those that are in place for ‘third countries’.
Post Brexit, VAT and customs duty will become chargeable at the point of importation.
Article 211 of the VAT Directive provides for the introduction of postponed accounting for certain categories of taxable persons or goods. Postponed accounting enables importers to account for import VAT through their VAT return, so that it is reclaimed at the same time it is declared. Whilst some Member States provide for postponed accounting the rules vary considerably, with certain Member States limiting it to certain categories of taxpayer.
In Ireland, approved importers can use the deferred payment system allowing them to defer payment of certain charges, including customs and VAT at import until the 15th of the month following importation.
The implications for business cash flow as a result of VAT and customs duty being chargeable at the point of importation have been identified as a consequence of Brexit and are being considered as part of the ‘whole of Government’ planning currently being undertaken.
158. Deputy Michael McGrath asked the Minister for Finance if he has carried out an assessment of the extent to which multinational corporations not headquartered here are booking in Ireland income from sales made to non-Irish consumers and offsetting Irish profit taxes on this sales income through Irish tax incentives for intellectual property; and if he will make a statement on the matter. [53374/18]
Amharc ar fhreagraAs the Deputy will be aware, the structure of the Irish corporation tax regime corresponds to international norms. A company that is resident in the State is taxed on its worldwide income while a company that is not resident in the State, but which carries on a trade in the State through a branch or agency in the State, is taxed on its trading income arising from the branch or agency. The worldwide trading income of a company resident in the State may include income from sales to both Irish and non-Irish customers. Such trading income is, in accordance with our tax rules, properly subject to tax in the State. There is no requirement for companies to specifically distinguish their trading profits between Irish and non-Irish sales and, as such, their trading profits cannot be separately ascertained.
As the Deputy is aware there is a scheme of relief in the form of capital allowances available to companies that incur capital expenditure on intangible assets for the purposes of a trade. The scheme applies to intangible assets which are recognised as such under generally accepted accounting practice and which are listed as a “specified intangible asset” in section 291A of the Taxes Consolidation Act 1997. An important feature of the relief is that the allowances may only be offset against trading income generated from the intangible assets and, for capital expenditure incurred on or after 11 October 2017, only against up to 80% of that income.
I have been advised by Revenue that, in relation to a company’s trading income generated from intangible assets, it is not possible to provide a breakdown as between amounts attributable to Irish and non-Irish sales because there is no requirement or basis for companies to provide this information.
159. Deputy Michael McGrath asked the Minister for Finance his plans to prevent equivalent structures to the single malt being established using Irish registered companies resident in other tax treaty partner jurisdictions, such as the United Arab Emirates, that have not signed Article 4 of the base erosion and profit sharing, BEPS, multilateral instrument or otherwise lack comparable measures in their tax treaties with Ireland; and if he will make a statement on the matter. [53375/18]
Amharc ar fhreagraI am aware that, in the context of references to the so-called single malt structure, it has been suggested equivalent structures could be established using Irish-registered companies tax resident in the United Arab Emirates (UAE).
However, I am advised by Revenue that, by virtue of paragraph 2 of the Protocol to the Ireland-UAE Double Taxation Convention, a structure of that type could only arise where an Irish-incorporated or registered company used in the structure would pay income tax or corporate tax in the UAE on its income. As income tax or corporate tax would not be paid in the UAE by any such company, such a structure would not appear to be possible.
I am advised by Revenue that it will remain vigilant to identify and address any such structure that would be contrary to the purposes of Ireland’s Double Taxation Conventions. The purpose of not providing opportunities for double non-taxation is set out clearly in the new preamble to Double Taxation Conventions that will come into force through the BEPS Multilateral Instrument.
While I am not aware of any single malt equivalent structure, I will not hesitate to take such action as may be necessary to support Revenue in addressing any such structure.
160. Deputy Éamon Ó Cuív asked the Minister for Finance the payments made to the European Union in each of the years 2016 and 2017, and to date in 2018 and estimated for 2019; the value of receipts received or estimated to be received for the same years; and if he will make a statement on the matter. [53404/18]
Amharc ar fhreagraEU budget payments and public sector receipt data are published annually on the Department of Finance’s website in the Budget Statistics publication. The public sector receipt measure captures funds under 'shared management' between national and EU authorities. In addition, the EU also pays some additional receipts directly to private beneficiaries under 'centralised direct management', most notably under the EU research funding programme.
Ireland's receipts from and contributions to the EU budget for the years 2016 and 2017 are set out in the table below:
|
Year |
Public Sector Receipts €m |
Direct Management Receipts* €m |
Total Receipts €m |
Payments to EU budget €m |
Net Receipts €m |
|
2016 |
1619.7 |
126.2 |
1745.9 |
2022.8 |
-276.9 |
|
2017 |
1595.7 |
112.3 |
1708.0 |
2016.2 |
-308.2 |
* - Direct Management - funds which are awarded and spent directly by the Commission. These are primarily research receipts.
To date, EU budget contributions for 2018 amount to just under €2,500 million. As published in Budget 2019, EU budget contributions are forecasted to be c. €2,575m in 2019. Receipts data for 2018 and 2019 will not be available until late 2019 and late 2020 respectively.
161. Deputy Joan Burton asked the Minister for Finance his views on mortgage customers having their loans sold to other lenders despite meeting and exceeding repayment agreements; and if he will make a statement on the matter. [53408/18]
Amharc ar fhreagra162. Deputy Joan Burton asked the Minister for Finance the actions he has taken in terms of oversight of the sale of mortgages to another lender; the number of mortgage holders who have been affected; and the considerations he has given to worried customers who have met their repayments and are concerned for the future. [53409/18]
Amharc ar fhreagraI propose to take Questions Nos. 161 and 162 together.
In answering the Deputy's questions, I have assumed that she is referring to the recent securitisation of a portfolio of NPLs announced by PTSB - Project Glenbeigh.
The Deputy will be aware that the reduction in the level of non performing loans (NPLs) across European banks is a major priority for the banking regulator, the SSM. The Irish banks have made huge progress in this regard since the height of the crisis with NPLs at the banks in which the State has a shareholding reducing by 70% from €54bn to €16bn at end-June 2018. A major contributor to this has been the almost 136,000 mortgage restructures that have been put in place.
Despite this progress, the NPL ratios at the Irish banks remain at an elevated level and are well above the European average of around 4%. PTSB is a particular outlier and had a ratio of 16% even after the bank’s loan sale – Project Glas – which was announced in July. Project Glenbeigh – PTSB’s second NPL transaction of 2018 announced on 29th November, will achieve a further significant reduction in the bank’s NPL ratio to below 10%.
It is important to reiterate that the protections in place for all borrowers before a sale, either by way of securitisation or otherwise, remain unchanged. Start Mortgages, who purchased the Glas portfolio in July, and Pepper, who now hold legal title to the Glenbeigh mortgages and who will act as servicer and administrator of the mortgages, are both regulated by the Central Bank of Ireland. When dealing with borrowers, these firms are required to comply with the Consumer Protection Code and the Code of Conduct for Mortgage Arrears. Furthermore, it has been confirmed in the case of this latest transaction that the terms of an agreed restructure will continue to be honoured.
In addition, earlier this year I asked the Central Bank to carry out a review of the CCMA to ensure it remains as effective as possible. The result of this review was published in October and it is encouraging to note that the key findings included confirmation that for borrowers who engaged with the process, the CCMA is working effectively as it is intended in the context of the sale of loans by regulated lenders.
In relation to the number of mortgage holders affected, PTSB confirmed in its press release that the mortgages involved were linked to 6,272 borrowing relationships where a borrowing relationship can be a single borrower or two or more joint borrowers. The following link to the bank's press release is included for the benefit of the Deputy:
www.permanenttsbgroup.ie/media/press-releases/2018/29-11-2018a.aspx.
Finally, I wish to highlight that I cannot stop loan sales, even by the banks in which the State has a shareholding. These decisions are the responsibility of the Board and management of the banks which must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks, which are legally binding documents that I cannot change unilaterally.
163. Deputy Joan Burton asked the Minister for Finance if he will report on his meeting with members of the Administration of the United States of America. [53410/18]
Amharc ar fhreagraI travelled to the United States on Monday 10 December for a programme of high level meetings in Washington DC. The main objective of the visit was to engage at the highest levels of the US Administration, as well as with senior members of Congress, on vital issues for Ireland, such as, the strong economic links between Ireland and the US, transatlantic relations, international trade, and a global approach to taxation.
During my visit I met with Secretary of the Treasury, Steven Mnuchin, and Chair of the Council of Economic Advisors, Kevin Hassett, Director of the Office of Management and Budget, Mick Mulvaney, and Deputy Director of the National Economic Council, Clete Willems. I also met with Manisha Singh, Acting Under Secretary of State for Economic Growth, Energy, and the Environment at the State Department.
In all of my meetings with the US administration I discussed the strong bilateral economic and trade relationship between Ireland and the US, the jobs US investment supports in Ireland, and Irish investment supports in the United States. In my meeting with Secretary Mnuchin I highlighted the importance the Government attaches to finding a solution to the issues faced by Aughinish Alumina.
We also discussed the global economic situation, EU-US relations, and the importance of pursuing global solutions in relation to taxation. The United States is an important partner for Ireland, and I look forward to continuing to work closely with Secretary Mnuchin and his colleagues on these and other issues.
While in Washington I also met with the Managing Director of the IMF, Christine Lagarde, and the CEO of the World Bank, Kristalina Georgieva.
164. Deputy Pearse Doherty asked the Minister for Finance the reason the code of practice on the transfer of mortgages is considered voluntary; the legal basis on which it was issued; the reason it was issued if there was no legal basis for same; and if he will make a statement on the matter. [53412/18]
Amharc ar fhreagra165. Deputy Pearse Doherty asked the Minister for Finance his views on the statement (details supplied) of his predecessor on the code of practice for the transfer of mortgages of the Central Bank. [53413/18]
Amharc ar fhreagraI propose to take Questions Nos. 164 and 165 together.
The Central Bank is empowered to impose codes of conduct under Section 117 of the Central Bank Act 1989. Such codes of conduct are required to be complied with by the regulated entities to whom they take effect as a matter of law. This means that the Central Bank can take action against a regulated entity which does not comply with a code of conduct (for example by imposing a direction on such entity or taking enforcement action under the Central Bank’s Administrative Sanctions Procedure). Both the Code of Conduct for Mortgage Arrears and the Consumer Protection Code are issued under Section 117 of the Central Bank Act 1989 and therefore are required to be complied with as a matter of law.
The Code of Practice on the Transfer of Mortgages was introduced in 1991. It was not issued under any statutory provision and is a voluntary code. It would have issued at a time when there would have been significant movements of mortgages between building societies.
That said, the enactment of the Consumer Protection (Regulation of Credit Servicing Firms) 2015 means that the protections which a borrower had before a loan was sold were not lost on the sale. Credit servicing firms are now regulated entities and are required as a matter of law to comply with the Central Bank Codes.
Of particular relevance, is paragraph 3.11 which provides
"Where a regulated entity intends to cease operating, merge with another, or to transfer all or part of its regulated activities to another regulated entity it must:
a) notify the Central Bank immediately;
b) provide at least two months' notice to affected consumers to enable them to make alternative arrangements;
c) ensure all outstanding business is properly completed prior to the transfer, merger or cessation of operations or, alternatively in the case of a transfer or merger, inform the consumer of how continuity of service will be provided following the transfer or merger; and
d) in the case of a merger or transfer of regulated activities, inform the consumer that their details are being transferred to the other regulated entity, if that is the case."
166. Deputy Martin Heydon asked the Minister for Finance the options he is considering regarding a potential future savings scheme similar to the special savings incentive account, SSIA; and if he will make a statement on the matter. [53473/18]
Amharc ar fhreagraI can advise the Deputy that I have no plans to introduce a SSIA type of saving product at this time.
167. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform the stage the renovation of the new Bailieborough Garda station building has reached; the date for completion; and if he will make a statement on the matter. [52854/18]
Amharc ar fhreagraThe Office of Public Works is currently finalising the "Planning Stage" for the new Bailieborough Garda Station. It is expected that this Part 9 Planning Application phase will be concluded very shortly.
It is not possible at this stage to be definitive about a completion date for the new Station. Work will soon be progressed on the preparation of tender documentation to enable the public procurement process and construction contract award stages to advance.
168. Deputy Lisa Chambers asked the Minister for Public Expenditure and Reform if an assessment has been carried out on the needs of all ports and airports here and changes to infrastructure and facilities that will required as a result of Brexit; and if he will make a statement on the matter. [53234/18]
Amharc ar fhreagra169. Deputy Lisa Chambers asked the Minister for Public Expenditure and Reform the outcome of assessments that have been carried out regarding changes to infrastructure and facilities at ports and airports as a consequence of Brexit; the changes that will be required; when he expects the new facilities and infrastructure will be in place by port and airport, in tabular form; if such changes require planning permission; if planning permissions have been sought; if so, the planning permissions that have been sought to date; and if he will make a statement on the matter. [53235/18]
Amharc ar fhreagraI propose to take Questions Nos. 168 and 169 together.
The Office of Public Works, on behalf of the Minister for Public Expenditure and Reform, has been engaged in extensive discussions with the Revenue Commissioners, the Department of Agriculture, Food and the Marine, the Department of Health and the Department of Transport in order to assess the requirements for additional inspection facilities at ports and airports.
The additional requirements have been discussed with the relevant port and airport authorities. As these discussions are ongoing, it would be premature to release any details.
170. Deputy Michael Healy-Rae asked the Minister for Public Expenditure and Reform his views on a proposal (details supplied); and if he will make a statement on the matter. [52731/18]
Amharc ar fhreagraThe 2012 and 2013 policing plans for An Garda Síochána identified 139 Garda stations for closure including the former Garda Station at Moyvane. Many of these properties reverted to the Office of Public Works (OPW) to identify an alternative State use or manage their disposal.
In 2016, An Garda Síochána/Policing Authority undertook a review of the closed Garda Stations. In late 2017, the preliminary review initially identified six stations for re-opening.
The final Review by the Policing Authority is expected to conclude at the end of this year. Following the publication of this review at the end of the year, in consultation with An Garda Síochána, the OPW will be in a position to determine the future use of the former Garda Stations, including the former Garda station in Moyvane.
171. Deputy Bríd Smith asked the Minister for Public Expenditure and Reform if he has set a cap of two years salary as a maximum in potential redundancy packages for affected workers in terms of proposed or future redundancies that may arise in the public sector; if this cap is being applied in other Departments; and if he will make a statement on the matter. [52738/18]
Amharc ar fhreagraThe Department of Public Expenditure and Reform and the Public Services Committee of ICTU agreed under the Public Service Agreement 2010 – 2014 that, inter alia, with effect from 1 June 2012 in the case of redundancy in the public service, any ex gratia payment will amount to no more than 3 weeks' pay per year of service, subject to the total statutory redundancy and ex gratia payment not exceeding either 2 years’ pay or one half of the salary payable to preserved pension age, whichever is less. This Agreement applies across all public service Departments.
These terms also inform this Department’s position with respect to redundancy proposals in the wider commercial State sector.
172. Deputy David Cullinane asked the Minister for Public Expenditure and Reform the trade unions in receipt of a negotiating licence that his Department does not recognise for collective bargaining and industrial relations purposes in part or in whole; the section of workers organised by a trade union with a negotiating licence to which non-recognition applies, in tabular form; and if he will make a statement on the matter. [52995/18]
Amharc ar fhreagraThe Civil Service Conciliation & Arbitration Scheme (C&A Scheme) is the formal structure for the conduct of industrial relations in the civil service and the scheme is administered by my Department. Under the provisions of the C&A Scheme the Minister for Public Expenditure and Reform may consider applications from any union or association seeking recognition under the Scheme provided that they are holders of a negotiation licence under the Trade Union Act, 1941. Such recognised unions or associations are organised on the basis of grade or category of employees within the civil service in order to facilitate their representative roles. It is accordingly within this context that civil servants are facilitated with union or association membership, and my Department, as administrator of the scheme, is not aware of any union or association which has been refused recognition having applied under the C&A Scheme.
