Tuesday, 15 Jan 2019

Motor Insurance Costs

Ceisteanna (229)

Fiona O'Loughlin

Ceist:

229. Deputy Fiona O'Loughlin asked the Minister for Finance the extent to which the benefits of the review of the motor insurance sector will accrue in terms of reduced premiums; and if he will make a statement on the matter. [1368/19]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

As you are aware, the Cost of Insurance Working Group published its Report on the Cost of Motor Insurance on 10 January 2017. The Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, set out in an Action Plan within the Report.

Work is ongoing on the implementation of the outstanding recommendations by the relevant Government Departments and Agencies and the seventh quarterly update on progress was published in November 2018 which shows that of the 59 separate applicable deadlines within the Action Plan set to the end of Q3 2018, 45 relate to actions which have now been completed. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. Officials in my Department are currently working with the relevant stakeholders to prepare the update for the Fourth Quarter of 2018.

I believe that the continued implementation of the recommendations from the Report on the Cost of Motor Insurance, in parallel with the implementation of the recommendations from the Report on the Cost of Employer and Public Liability Insurance , will make a difference to the pricing of insurance premiums. It is envisaged that the implementation of all the recommendations from the two primary Reports cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, will achieve the objective of delivering fairer premiums for consumers and businesses alike.

In this regard, it should be noted that the most recent CSO data (for November 2018) indicates that private motor insurance premiums have decreased by 22.7% since peaking in July 2016. There was a drop of 7.6% year-on-year.

While the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore there are many people who may still be seeing increases. However, I am hopeful that this greater stability in pricing will be maintained with the result that premiums should continue to fall from the very high levels of mid-2016.

Tax Code

Ceisteanna (230)

John McGuinness

Ceist:

230. Deputy John McGuinness asked the Minister for Finance if he will address matters relating to section 114 of the Taxes Consolidation Act 1997 (details supplied); and if he will make a statement on the matter. [1373/19]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I am advised by Revenue that in accordance with section 114 of the Taxes Consolidation Act 1997, where an employee is necessarily obliged to incur and defray out of the emoluments of the employment expenses of travelling in the performance of the duties of the employment, or otherwise to expend money wholly, exclusively and necessarily in the performance of those duties, there may be deducted from the emoluments of the employee to be assessed to income tax the expenses so necessarily incurred and defrayed.

Arising from an employee’s entitlement to a tax deduction under section 114, in respect of certain expenses, there exists a long-standing Revenue practice under which employers may reimburse tax-free to employees the expenses of travel (and subsistence relating to that travel), subject to certain conditions being fulfilled. I am advised by Revenue that the conditions under which the reimbursement to employees of the expenses of travel and subsistence may generally be made without deduction of tax are as follows:

(a) firstly, the employee must be temporarily away from his/her normal place of work in the performance of the duties of his/her employment;

(b) secondly, the travel expenses must be necessarily incurred in the performance of the duties of the office or employment, and

(c) thirdly, arising from a long-accepted position, supported by tax case law, the expenses of subsistence must attach to travelling necessarily incurred in the performance of the duties of the office or employment.

Moreover, provided the employee bears the cost of all expenses of travel necessarily incurred in the performance of the duties of his/her employment (and bears the cost of subsistence relating to such travel), Revenue will disregard for income tax purposes the reimbursement of expenses of travel and subsistence, where such reimbursement is made by way of:

(a) a flat rate up to, but not exceeding, the prevailing Civil Service rates for travel and subsistence, or

(b) a flat rate based on any other schedule of rates and related conditions of travel and subsistence, which do no more than reimburse the employee for actual expenditure necessarily incurred.

I do not consider that the conditions outlined above create unreasonable restrictions in the deductibility of travel expenses. Consequently, I do not see the need to consider an alternative approach.

As the Deputy has mentioned in his question, a public consultation was held in 2015 on the tax treatment of expenses of travel and subsistence for employees and office holders. Arising from that consultation a number of issues were identified, which resulted in the introduction of legislation in the Finance Acts of 2015 and 2016 to exempt certain expense payments of non-resident non-executive directors and members of the State Examinations Commission (2015), and of resident non-executive directors (2016). I have no plans to introduce further legislation on this issue at present.

Finally, it should be noted that Revenue has published extensive guidance on the Tax Treatment of the Re-imbursement of Expenses of Travel and Subsistence to Office Holders and Employees, which is available on the Revenue website: Part 05-01-06; https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-06.pdf.

Revenue are always willing to provide clarification to employees, businesses and tax practitioners in relation to all areas of taxation, including travel and subsistence expenses, if requested to do so.

European Investment Bank

Ceisteanna (231)

Michael McGrath

Ceist:

231. Deputy Michael McGrath asked the Minister for Finance if he or his officials have been involved in discussions regarding the possibility of providing additional capital to the European Investment Bank as a result of the UK's planned departure from the European Union; his views on the possibility of the UK remaining a member of the EIB after it leaves the EU; the consequences for Ireland if the UK is no longer a member of the EIB; and if he will make a statement on the matter. [1378/19]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

When the United Kingdom exits the EU on 29 March 2019, its departure from the EU will also mean that it will stop being a shareholder of the European Investment Bank (EIB). Article 308 of the Treaty on the Functioning of the European Union states that: “The members of the European Investment Bank shall be the Member States”. As a result, the UK will not remain a member of the EIB after it leaves the EU.

Once the UK stops being a shareholder of the EIB, the capital it has provided to the EIB will no longer be part of the Bank’s subscribed capital base. In recent months, the shareholders of the EIB, including Ireland, have been actively discussing means by which the capital base of the EIB can be strengthened to compensate for the loss of the UK shareholding. This may include, redenomination of some reserves and potentially an adjustment in the shareholdings of the EU Member States.

Assuming a positive outcome and applying the provisions in the Withdrawal Agreement on the repayment of the UK’s capital, the effect of UK withdrawal on EIB’s operations and financial capacity should be mitigated. This would include any direct impact on EIB lending to Ireland. The future relationship between the UK and the EIB will be subject to the broader negotiations on the future relationship between the UK and the EU.

Revenue Commissioners Powers

Ceisteanna (232)

John McGuinness

Ceist:

232. Deputy John McGuinness asked the Minister for Finance if the issues raised by a person (details supplied) have been resolved; the incidents involved and the way in which each one was dealt with by the Revenue Commissioners; and if the circumstances relate to the lack of outcomes to complaints made by them in the past or to a breach of agreements by the Revenue Commissioners. [1381/19]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I am advised by Revenue that the issue to which the Deputy is referring relates back to 2007 when a warrant notification from the Wexford Sheriff, in respect of taxes owed by the person in question, was inadvertently delivered to an unconnected third party of the same name.

Revenue further advised that it has apologised to the person for the error on numerous occasions over the intervening years as has the Wexford Sheriff. (It is important to note that the Wexford Sheriff is an Officer of the Court that acts independently of Revenue under the Court Offices Act 1945.) Revenue also appointed senior officials in both the local Wexford office and in the Collector-General’s office to liaise directly with the person as necessary and to assist them in managing their tax obligations, particularly in respect of a number of tax filing issues that subsequently arose.

While Revenue is not aware of any unresolved issues at this stage, it is happy to further engage with the person or their representatives if required. To advance matters, the Deputy should advise the person to liaise directly with the designated senior officials to discuss any further concerns that they may have. Revenue is also happy to provide the names and contact details of the officials to the Deputy should it be useful to do so.

Tax Data

Ceisteanna (233, 234, 235)

Joan Burton

Ceist:

233. Deputy Joan Burton asked the Minister for Finance the number of primary schools registered for relevant contracts tax in each of the years 2015 to 2018; the number and type of audits carried out by the Revenue Commissioners on those schools in each of the years; the type of audits carried out; and the results arising. [1484/19]

Amharc ar fhreagra

Joan Burton

Ceist:

234. Deputy Joan Burton asked the Minister for Finance the number of post-primary schools registered for relevant contracts tax in each of the years 2015 to 2018; the number and type of audits carried out by the Revenue Commissioners on those schools in each of the years; the type of audits carried out; and the results arising. [1485/19]

Amharc ar fhreagra

Joan Burton

Ceist:

235. Deputy Joan Burton asked the Minister for Finance the number of third-level colleges registered for relevant contracts tax in each of the years 2015 to 2018; the number and type of audits carried out by the Revenue Commissioners on those colleges in each of the years; the type of audits carried out; and the results arising. [1486/19]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 233 to 235, inclusive, together.

I am advised by Revenue that there are 3,101 entities currently registered for Relevant Contracts Tax (RCT) across the education sector. The breakdown between Primary, Post Primary and Third Level is set out in the table below.

Level	No.
Primary	2,549
Post Primary	516
Third Level	36

The details of Revenue’s compliance intervention Programme (Aspect Queries, Profile Interviews, Audits, Investigations) across the education sector for the years 2015 to 2017 are set out in the table below. For each year, the table includes the total number of interventions carried out (including yield) and separately sets out the number of cases where RCT formed part of the overall settlement.

Level	Year	Overall		Interventions with RCT liability
		No. of Interventions	Yield	No. of Interventions	Yield
Primary	2015	281	€1,024,495	19	€130,699
	2016	247	€1,291,503	17	€218,903
	2017	340	€1,623,351	17	€147,699
	2018	247	€721,224	5	€20,556

Post Primary	2015	178	€775,365	9	€124,159
	2016	124	€1,076,832	4	€4,028
	2017	159	€975,510	2	€10,693
	2018	220	€893,152	5	€22,965

Third-Level	2015	62	€3,548,268	1	€131,988
	2016	39	€64,871	0	-
	2017	43	€152,515	0	-
	2018	73	€246,521	2	€128,862

Corporation Tax

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 236 to 242, inclusive, together.

I am advised by Revenue that the number of notifications received from companies that they are qualifying companies for the purposes of section 110 of the Taxes Consolidation Act 1997 (“TCA”) in each of the years 2017 and 2018 is as follows:

Year	Number of Notifications Received
2017	382
2018	471
Total	853

Information relating to Corporation Tax returns filed by companies who had submitted a notification to Revenue that they were a qualifying company for the purposes of section 110 TCA during 2016 and 2017 (based on records on 10 January 2019) is, as follows:

Corporation Tax returns	2016	2017
No. of companies expected to file returns	2,642	2,966
No. of returns due but not filed as at 10 January 2019	181	480

I am advised that as part of Revenue’s on-going compliance programmes, its Large Corporates Division engages with companies who appear to have an obligation to file a corporation tax return, but who have not done, so to establish the reason for the non-filing of the return.

There have been no prosecutions of section 110 companies for failure to file returns. Revenue’s normal approach is to impose of a surcharge for the late or non-filing of a tax return, including financial statements, under section 1084 TCA 1997 rather than pursuing a criminal prosecution under the provisions of section 1087 of the TCA 1997.

I am advised by Revenue that there is no legal requirement for information regarding “connected parties” or whether the company is engaged in aircraft leasing or any other activity to be included on the corporation tax returns submitted by taxpayers. Therefore, Revenue is not in a position to provide the information requested by the Deputy regarding the number of section 110 companies with Russian or Chinese connections or the number engaged in aircraft leasing.

Revenue undertake compliance interventions in a number of forms, including audits, profile interviews and aspect queries. I am advised by Revenue that one audit was completed in respect of a section 110 company in 2018 for reasons other than VAT. No additional liabilities arose from that audit. The number of compliance interventions of all types (non-VAT related) completed during 2017 and 2018 is as follows:

Compliance Interventions	Nos.
Audit	1
Profile Interview	1
Aspect Query	67

I am advised by Revenue that a section 110 company, for accounting periods ending in 2017, is required to provide information on its corporation tax return on whether the company’s qualifying assets include “specified mortgages” (broadly, mortgages on land in the State) and, where the company holds “specified mortgages”, whether the company carries on a “specified property business” (broadly, a business of managing mortgages on land in the State) within the meaning of section 110(5A) of the Taxes Consolidation Act 1997. The number of companies who confirmed they hold “specified mortgages” and carry out a “specified property business” is, as follows:

Companies	Nos.
Number holding "specified mortgages"	145
Number carrying out a "specified property business”	90

Tax Data

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 243 to 245, inclusive, together.

I would clarify that correlative relief claims may be more appropriately described as potential tax refunds which Revenue may be required to make in accordance with our tax treaty obligations, as opposed to tax at risk.

Regarding open claims for correlative adjustments, I am advised by Revenue that as at 30 September 2018, the latest period for which relevant data has been compiled, approximately €271 million in tax was the subject of open correlative relief claims.

Regarding 2017 and 2018 claims, correlative relief with a tax value of approximately €26 million has been granted as at 30 September 2018.

The table below includes the number of correlative relief claims made by companies for each of the years 2010 to 30 September 2018, together with the number of claims where correlative relief was granted and the tax value of relief granted.

Year of claim	Number of claims received	Tax value of relief granted *
2010	16	€89.7m
2011	8	€40.9m
2012	13	€34.2m
2013	10	€9.2m
2014	12	€3.8m
2015	14	€9.0m
2016	9	€0.0m
2017	8	€15.0m
2018	10	€0.0m

* Correlative relief may be granted over a number of years and may take the form of increasing losses to be carried forward as well as refunds and off-sets.

I am advised by Revenue that, having regard to their obligation to observe confidentiality in relation to the tax affairs of taxpayers or small groups of taxpayers, they are not in a position to provide the information requested by the Deputy in relation to the numbers of claims where correlative relief was granted, the amount of tax involved in the three largest cases or the industry or the adjusting country with respect to those cases.

Finally, it is to be noted that claim numbers and amount of tax relief granted as a result of corresponding adjustments agreed between Revenue and the tax authorities of other countries under the Mutual Agreement Procedures provided for in Double Tax Treaties are not included in the above figures.

VAT Yield

Ceisteanna (246, 247)

Joan Burton

Ceist:

246. Deputy Joan Burton asked the Minister for Finance the estimated total value of electronic sales from Ireland to Italy for VAT-unregistered customers and VAT-registered customers in each of the years 2015 to 2018. [1498/19]

Amharc ar fhreagra

Joan Burton

Ceist:

247. Deputy Joan Burton asked the Minister for Finance the likely tax loss to Ireland in a full year of the proposed Italian digital tax if credit was claimed and-or granted here for the tax and the companies affected changed their business structures to reallocate profits to the locations in which the sales were generated, that is, Italy. [1499/19]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 246 and 247 together.

I have set out below, for the years 2015 to 2017 and period to the end of Q3 2018 (beyond which figures are not yet available), an estimate provided by the Revenue Commissioners of the total value of taxable e-services supplied directly to VAT unregistered customers in Italy by businesses established in Ireland. Supplies from Ireland are excluded where a business has a fixed establishment in Italy or has chosen not to register though the simplified VAT Mini One Stop Shop (MOSS) scheme. In addition, Irish businesses that supply services though digital portals, platforms, gateways or marketplaces where the host is not VAT MOSS-registered in Ireland may be excluded. Equally, businesses located outside of Ireland that supply e-services through such technologies with a host established in Ireland may be included.

Year	Value of Taxable Supplies (B2C) to Italy €m
2015	€111m
2016	€205m
2017	€415m
2018 (Q3)	€368m

Information on the total VAT collected on these supplies is provided on the Revenue website https://www.revenue.ie/en/corporate/information-about-revenue/statistics/registrations-assessments-transactions/vat-moss.aspx.

The supply of e-services to VAT registered customers is not within the scope of the VAT MOSS scheme, as VAT registered customers account for their EU acquisitions through domestic VAT and as such the identification of such supplies is not readily available. Irish businesses providing intra-Community supplies are required to submit periodic returns on these supplies, although specific detail on these goods or services is not required. Therefore, it is not possible to quantify the value of e-services from these records. However, the value of all taxable VAT zero-rated services is available. The table below provides an estimate of the value of all taxable services (including e-services) supplied to Italy for the period January 2015 to the end of August 2018.

Year	Value of Taxable Zero-rate Services (B2B) to Italy €b
2015	€2.9bn
2016	€4.0bn
2017	€4.2bn
2018 (August)	€2.6bn

Additional information concerning International trade in services is provided by the Central Statistics Office at the following link:

http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=BPA04&PLanguage=0.

As regards Question [1499], I am informed by Revenue that the available data is not sufficiently detailed to enable a calculation of the likely tax loss as a result of a digital tax in any specific EU Member State.

Property Tax Administration

Ceisteanna (248, 249)

Róisín Shortall

Ceist:

248. Deputy Róisín Shortall asked the Minister for Finance his views on providing relief for local property tax for older persons who are paying very expensive nursing home fees for their spouses under the fair deal scheme; and if he will make a statement on the matter. [1538/19]

Amharc ar fhreagra

Róisín Shortall

Ceist:

249. Deputy Róisín Shortall asked the Minister for Finance his views on providing relief for local property tax for older persons who are paying expensive nursing home fees for their spouses under the fair deal scheme; and if he will make a statement on the matter. [1554/19]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 248 and 249 together.

The 2012 inter-Departmental Group which considered the structures and modalities of a property tax recommended that a universal liability to the Local Property Tax (LPT) should apply to all owners of residential property with a limited number of exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption. While there is no specific exemption from the requirement to pay LPT for persons as described in the deputy's questions, such persons may be entitled to an exemption on other grounds or may qualify for a deferral subject to meeting the qualifying conditions.

Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) provides for a system of deferral arrangements for owner-occupiers where there is an inability to pay the tax and the person meets certain criteria based on income thresholds. These deferral arrangements also take account of mortgage interest payments made by the property owner.

The property must be the sole or main residence of the liable person and his or her gross income must be below certain thresholds. The thresholds are €15,000 for a single person and €25,000 for a married couple, civil partners or cohabiting couple. Deferral in respect of half of the local property tax payable is possible, where the gross income is above the threshold but less than €25,000 in the case of a single person and €35,000 in the case of a couple.

Homeowners may also be able to claim a deferral on hardship grounds if they have suffered a significant unexpected and unavoidable financial loss or expense in the current year and as a result are unable to pay their LPT liabilities without causing excessive financial hardship.

My department is currently finalising a review of the LPT in conjunction with the Departments of the Taoiseach, Public Expenditure and Reform, Housing Planning and Local Government, and the Office of the Revenue Commissioners. The review is looking in particular at the impact on LPT liabilities of property price developments. In that regard the review 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. I will of course carefully consider the conclusions and recommendations of the report when it is presented to me.