Wednesday, 25 September 2019

Ceisteanna (64, 65, 66, 67)

Joan Burton

Ceist:

64. Deputy Joan Burton asked the Minister for Finance if an analysis will be provided of the known losses carried forward for corporation tax purposes at 31 December in each of the years 2015 to 2018, respectively, under each heading by general NACE classification (details supplied); and if he will make a statement on the matter. [39069/19]

Amharc ar fhreagra

Joan Burton

Ceist:

65. Deputy Joan Burton asked the Minister for Finance if an analysis will be provided of the known losses carried forward for income tax purposes at 31 December in each of the years 2015 to 2018, respectively, under headings by general NACE classification (details supplied); and if he will make a statement on the matter. [39070/19]

Amharc ar fhreagra

Joan Burton

Ceist:

66. Deputy Joan Burton asked the Minister for Finance if an analysis will be provided of known losses carried forward for corporation tax purposes at 31 December in each of the years 2015 to 2018 under headings by general NACE classification (details supplied); and if he will make a statement on the matter. [39071/19]

Amharc ar fhreagra

Joan Burton

Ceist:

67. Deputy Joan Burton asked the Minister for Finance his views on whether it is time to limit all losses forward for income and or corporation tax purposes; the estimated yield of such an action in a full year if a time to limit was set at five or ten years, respectively; and if he will make a statement on the matter. [39072/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 64 to 67, inclusive, together.

I am advised by Revenue that a sectoral breakdown of losses forward claimed on Corporation Tax returns and Income Tax returns is set out in the tables below for years 2015 to 2017 (inclusive). Information in respect of the 2018 tax year is not available, as the relevant tax returns are not yet filed. This information will be available in late 2020.

A breakdown of losses forward is not available by type of underlying loss or by age profile of the loss. However, Revenue’s report on Corporation Tax returns for 2017, at link https://www.revenue.ie/en/corporate/documents/research/ct-analysis-2019.pdf, (Sections 3.2 and 3.3) provides a detailed report of the available data in relation to losses forward and capital allowances by companies.

Trading Losses Forward Claimed by Companies (by Sector)

Sector

2015

€m

2016

€m

2017

€m

Financial & Insurance

124,175

112,796

106,949

Administrative & Support Service

37,966

39,619

45,464

Information & Communication

10,534

11,281

11,936

Construction

9,999

11,369

10,713

Manufacturing

8,305

8,857

8,449

Transportation & Storage

8,382

8,513

8,500

Wholesale & Retail Trade

7,628

7,991

8,832

All Other Sectors

11,347

14,158

12,105

Total

218,335

214,585

212,949

Trading Losses Forward Claimed by Self Assessed Taxpayers (by Sector)

Sector

2015

€m

2016

€m

2017

€m

Financial & Insurance

17

20

20

Administrative & Support Service

8

8

6

Information & Communication

2

2

8

Construction

589

627

695

Manufacturing

6

6

5

Transportation & Storage

13

20

7

Wholesale & Retail Trade

56

53

45

All Other Sectors

1,382

1,266

1,122

Total

2,074

2,001

1,908

In respect of question 39072/19, loss relief is generally provided in Part 12 of the Taxes Consolidation Act (TCA) 1997 for both income tax and corporation tax purposes. It allows losses incurred in the course of business or trade to be accounted for when calculating the same business’ tax liabilities. The purpose of this approach is to recognise that fluctuations in the business cycle may run over several years and that it would be unbalanced to tax profits earned in one year and not allow relief for losses incurred in another.

The treatment of losses in Ireland is a long standing feature of our tax system and is a standard feature of the tax systems in all OECD countries. There are therefore no plans to amend the current system, including to time limit the use of losses forward.

Deputies may be aware that my Department provided a technical note to the Committee on Finance, Public Expenditure and Reform, and Taoiseach in 2018 setting out many of the technical considerations relevant to corporation tax loss relief, and many of these considerations would apply also in respect of income tax loss relief. This paper is available online at: https://www.gov.ie/en/publication/436ff7-technical-note-on-the-potential-consequences-of-changes-to-the-treat/.