Corporation Tax Regime

Ceisteanna (62)

Michael McGrath

Ceist:

62. Deputy Michael McGrath asked the Minister for Finance the estimated impact on corporation tax receipts of the full implementation of BEPS 2 over the years ahead; and if he will make a statement on the matter. [40395/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The OECD work on addressing the tax challenge of digitalisation, which has been referred to as the BEPS 2 project, is ongoing.  A Programme of Work was published early this year and the intention is to find consensus for a broad approach during 2020.  Further work would then be required to implement any agreement that is reached both domestically and multilaterally. 

At this early stage it is not possible to estimate the potential impact on corporation tax receipts of the implementation of any outcome which may eventually be agreed at the OECD.  Technical working parties at the OECD are examining the issues in detail and no decisions have yet been made. Work on estimating any potential impact is underway at both OECD level and domestically. Currently however therefore there is insufficient clarity to properly assess the potential impact on tax revenues of any of the proposals under discussion at the OECD.   Ultimately the impact on corporation tax receipts will depend on the detail of whatever is actually agreed globally.  

Trade Data

Ceisteanna (63)

Michael McGrath

Ceist:

63. Deputy Michael McGrath asked the Minister for Finance the level of trade in both directions with the United Kingdom; and if he will make a statement on the matter. [40397/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Central Statistics Office’s (CSO) statistical releases on external trade show that in 2018 Ireland exported €16.1 billion worth of goods to the UK, and imported €20.0 billion worth of goods from the UK. This represents 11 per cent of total goods  exports and 22 per cent of total  goods imports.

In 2017, the latest year for which goods and services data are available, 14 per cent of our goods and services imports (€35.4 billion) came from the UK, compared to 15 per cent (€42.5 billion) of our goods and services exports destined for the UK.

The UK is one of Ireland’s most important trading partners. Maintaining the closest possible trading relationship between the EU and the UK is therefore one of the Government’s key Brexit priorities.

The Government will continue to work to improve the business environment – to make it more competitive, to assist exporters to diversify markets, and to provide better infrastructure.

Longer-term, we need to mitigate against the potential of regulatory divergence between the UK and EU standards given its potential impact on trade and investment and the competitiveness of our businesses. We will therefore be working to minimise this impact and to ensure a level playing field.

Help-To-Buy Scheme Data

Ceisteanna (64)

Michael McGrath

Ceist:

64. Deputy Michael McGrath asked the Minister for Finance the annual cost of the help-to-buy scheme in each year since its establishment; the number of persons that availed of the scheme in each year; the number that were first-time buyers; the number that were self builds; the average house price that was purchased using the scheme in each year in tabular form; and if he will make a statement on the matter. [40451/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The cost of the Help to Buy incentive in each year, over the period 19 July 2016 to end August 2019, (the most recent month for which data are available) is as follows: 

Year

Cost (€M)

2019*

64.3

2018

73.2

2017

50.2

2016

18.7

*To end August 2019

The number of claims made for HTB in each year is outlined in the table below.  It should be noted that a claim is made in respect of a property and may relate to one or more individuals.  Under the legislation, a claimant must be a 'first-time purchaser' (i.e. a person who has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling). As such, all claims in the following table relate to first-time buyers.

Year

Number of claims

2019*

4,165

2018

4,966

2017/2016**

4,824

*To end August 2019

**As the scheme was backdated to July 2016, this data represents claims made in 2017 and retrospective claims relating to 2016 which were made in 2017

Revenue advise me that, out of the total of 14,722 claims for HTB which have been made to end August 2019, 3,164 relate to self-build properties.

Finally, the average purchase price per year associated with HTB claims is set out in the following table. 

Year  Claim Started

Average   Purchase Price (€)

2017

304,100

2018

316,800

2019   (to end September)

327,700

 

Tax Reliefs Data

Question No. 66 answered with Question No. 50.

Ceisteanna (65)

Michael McGrath

Ceist:

65. Deputy Michael McGrath asked the Minister for Finance the number of persons that availed of the capital gains tax entrepreneurs relief in each year since it was established; the cost in each of those years; and if he will make a statement on the matter. [40454/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

It is assumed the Deputy is referring to Capital Gains Tax (CGT) Entrepreneurial Relief provided for in section 597AA of the Taxes Consolidation Act 1997. Statistics on the numbers availing of the Relief, and the cost to the Exchequer, are available at link https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/entrepreneur-relief-statistics.aspx. The most recent year for which data are presently available is 2017 with a cost of €81.8 million covering 875 tax units.

In general, consideration of any changes to the tax system in advance of Budget 2020 are undertaken within the annual Budgetary and Finance Bill process. The Deputy will therefore appreciate that it is not appropriate for me to comment on the matter at this time.

Question No. 66 answered with Question No. 50.

Insurance Industry Regulation

Question No. 68 answered with Question No. 50.

Ceisteanna (67)

Michael McGrath

Ceist:

67. Deputy Michael McGrath asked the Minister for Finance the principal legislation dealing with the regulation of the insurance industry by the Central Bank from both a macro prudential role and a consumer protection role; and if he will make a statement on the matter. [40456/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Solvency II Directive is the principal piece of legislation dealing with the regulation of the insurance industry in the European Union, and applies to almost all insurers and reinsurers. It has both a prudential and a consumer protection dimension to it. It was transposed into Irish law as the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. 485 of 2015) and the legislation entered into force on 1 January 2016.

As stated in the recitals for the Directive, “the protection of policy holders presupposes that insurance and reinsurance undertakings are subject to effective solvency requirements that result in an efficient allocation of capital across the European Union”. Furthermore, “the main objective of insurance and reinsurance regulation and supervision is the adequate protection of policy holders and beneficiaries. … Financial stability and fair and stable markets are other objectives of insurance and reinsurance regulation and supervision which should also be taken into account but should not undermine the main objective.”

The Solvency II framework sets out strengthened requirements around capital, governance and risk management in all EU authorised (re)insurance undertakings. It also introduces increased regulatory reporting requirements and public disclosure requirements. The new requirements are intended to reduce the likelihood of an insurer failing and therefore is designed to provide policyholders with increased protection.

In addition to Solvency II, Section 117 of the Central Bank Act 1989 provides that the Central Bank may produce a Consumer Protection Code for institutions that it licences, after consultation with the Minister for Finance. As the Deputy is aware, the provisions of this Code are binding on regulated entities and must, at all times, be complied with when providing financial services.

Question No. 68 answered with Question No. 50.

Tax Data

Ceisteanna (69)

Michael McGrath

Ceist:

69. Deputy Michael McGrath asked the Minister for Finance the number of persons that availed of the KEEP scheme in each year since its establishment; the cost in each year; and if he will make a statement on the matter. [40459/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that companies granted qualifying share options to 87 key employees under the Key Employee Engagement Programme during 2018 (the first year of the scheme). Generally, a key employee must hold the option for 12 months prior to exercise and may exercise it at any time up to 10 years after the date of grant. Therefore, 2019 is the earliest year in which individuals may exercise their options to acquire shares in the qualifying companies. Returns for 2019 will not be filed with Revenue until 2020.  As no information has been returned to-date in respect of the exercise of KEEP options, it is not possible to estimate the associated tax cost.

Employment and Investment Incentive Scheme Data

Ceisteanna (70)

Michael McGrath

Ceist:

70. Deputy Michael McGrath asked the Minister for Finance the number of persons that availed of the EIIS scheme in each year since its establishment; the cost in each year; and if he will make a statement on the matter. [40460/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that the number of investors who availed of the Employment and Investment Incentive (EII) Scheme, and its cost to the Exchequer in each year, can be found on page 5 of the EII statistics report on Revenue’s webpage at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/eii.aspx.

 The following table sets out the information in tabular form for each year to 2017 (the most recent years for which statistics are available).

Year 

 Investors 

 Estimated Tax Cost (1st tranche) €m 

Estimated Tax Cost (2nd tranche) €m

2011/2012  

1,423

15.7

3.2

2013

1,621

17.3

2.9

2014

1,731

23.3

2

2015

1,979

28

 

2016

2,260

31

 

2017

1,538

18.6

 

 

Knowledge Development Box

Ceisteanna (71, 72)

Michael McGrath

Ceist:

71. Deputy Michael McGrath asked the Minister for Finance the number of persons that availed of the knowledge development box scheme in each year since its establishment; the cost in each year; and if he will make a statement on the matter. [40461/19]

Amharc ar fhreagra

Michael McGrath

Ceist:

72. Deputy Michael McGrath asked the Minister for Finance the number of SMEs that have availed of the research and development tax credit in each year since its establishment; the cost in each year of SMEs availing of the credit; and if he will make a statement on the matter. [40462/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 71 and 72 together.

I am advised by Revenue that the most recent data on the annual cost and the number of claimants of the Knowledge Development Box (KDB) for the years 2016 and 2017 are published on page 18 of Revenue’s paper on 2018 Corporation Tax payments and 2017 Corporation Tax returns. This information is available at www.revenue.ie/en/corporate/documents/research/ct-analysis-2019.pdf.

In this regard, the Deputy may be aware that a claimant company has a period of up to 24 months to make a claim for KDB relief. Therefore, more claims in respect of the year ended 31 December 2017 may be made by September 2019. Final annual cost and claimant figures for 2017 will be made available in 2020.

I am further advised that, due to the small number of KDB claims and Revenue’s obligation to protect the confidentiality of taxpayer data, it is not possible to provide information in respect of the size of the firms availing of the relief.

The annual cost of the Research and Development (R&D) tax credit and the number of companies that availed of it for years up to 2017, the most recent year for which data is available, is published on the Revenue website at the following link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx .

The available information in respect of multinational and SME companies is split between companies administered by Revenue’s Large Corporates Division (LCD) and non-LCD companies. Most of the companies administered by LCD are multinational companies. Also shown is the distribution of the R&D claims by the number of employees of the claimant companies.

Motor Insurance Costs

Ceisteanna (73)

Michael McGrath

Ceist:

73. Deputy Michael McGrath asked the Minister for Finance the rank of Ireland in the EU in terms of the level of motor insurance costs; and if he will make a statement on the matter. [40481/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

At the outset, it is important to note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation and my Department does not collect the type of information being sought by the Deputy.

It is very difficult to compare insurance costs across Europe due to differences in legal and regulatory systems in each member state. Nonetheless, to try and be as helpful to the Deputy as possible, Insurance Europe, the European (re)insurance federation, produces reports on an ongoing basis regarding the insurance industry across Europe. For example, the European Insurance in Figures (2017 data) and the European Motor Insurance Markets, both published in early 2019, contain some useful comparative information in respect of insurance costs up to 2017. The European Insurance — Key Facts report published in October 2018, graphs the average premium level across European countries for a variety of insurance products for the year 2017. The varying levels of premiums across Europe are accounted for by a wide range of regulatory, risk and economic factors which differ across European jurisdictions.

In relation to insurance costs, it was noted by the Personal Injuries Commission in their reports that it was not possible to have meaningful comparisons to the European data (excluding the UK) regarding award levels (which are a key driver for insurance costs) as this information was not provided to them or available at a sufficiently granular level. However, I acknowledge that both insurance costs and award levels for personal injuries in Ireland are much higher than in our European counterparts. This is why the work of the Cost of Insurance Working Group (CIWG) is so important.

The CIWG, which was established in July 2016, and which produced two reports, is continuing to work to implement the recommendations of the Cost of Motor Insurance Report and the Cost of Employer and Public Liability Insurance Report.  Its most recent Progress Update, the Ninth, was published in July 2019 and shows that the vast majority of recommendations and actions due by Q2 2019 have been completed.

I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from August 2019 show that the price of motor insurance is now 24% lower than the July 2016 peak).  The Government is determined to keep working to ensure that these positive pricing trends continue and can be extended to other forms of insurance.

Property Tax

Ceisteanna (74)

Willie Penrose

Ceist:

74. Deputy Willie Penrose asked the Minister for Finance if his attention has been drawn to an anomaly by which if a self-employed person that files an income tax return and has not paid their local property tax, the Revenue Commissioners apply a 10% penalty to their total tax liability (details supplied); if he will make appropriate adjustments to the legislation in this regard; and if he will make a statement on the matter. [40487/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that, similar to the position that applies in the case of other taxes and duties, penalties can be imposed for various offences relating to local property tax (LPT), such as failure to submit a return or other documentation or the provision of false information. Thus, all taxpayers who fail to submit an LPT return, or who submit an incorrect LPT return, are liable to a penalty of the amount of the LPT that would be payable with a correct return, subject to a maximum penalty of €3,000.

In the normal course of events, a self-employed person is penalised for the late submission (or non-submission) of an income tax return by the imposition of a surcharge on his or her income tax liability. However, a self-employed person who has submitted his or her income tax return on time can also be liable to an income tax surcharge in respect of the late submission of his or her LPT return or the failure to pay LPT.  Where such a person has not submitted his or her LPT return by the time that he or she submits an income tax return, the income tax liability is increased by 10% up to a maximum increase of €63,485.  However, where the LPT return is subsequently submitted and the associated LPT liability is paid, the income tax surcharge is capped at the amount of the LPT liability.

Unlike self-employed taxpayers, PAYE taxpayers are not generally required to submit an annual income tax return. Therefore, it is not possible to impose a similar type surcharge on PAYE taxpayers for failure to submit an LPT return on time. While PAYE taxpayers and self-employed taxpayers are treated the same in terms of the amount of their LPT liability, the same treatment is not necessary, and not always possible, in relation to how Revenue addresses non-compliance by such taxpayers.  Revenue’s compliance actions are tailored according to the type of taxpayer involved and the most effective way to ensure compliance. This is illustrated by the use of the facility to enforce the collection of LPT liabilities from PAYE taxpayers through mandatory deduction at source from a PAYE taxpayer’s salary or pension.  As such an enforcement option can apply in the case of PAYE taxpayers, it is considered that linking non-compliance with LPT by self-employed persons with a surcharge on their income tax liabilities is both fair and proportionate. 

Given the relatively low level of LPT liability for most property owners, the application of a 10% surcharge on a self-employed person’s LPT liability alone would be unlikely to act as an effective deterrent to non-compliance.  As I have already stated, having incurred a surcharge, a self-employed person has the opportunity to cap the surcharge at the amount of the LPT liability due by submitting an LPT return and/or paying the LPT liability.  Compliance is not just about ensuring the submission of returns and the payment of outstanding tax liabilities; there is also a timing aspect to compliance.  Returns must be submitted and payments must be made by specified dates.  It is considered that reducing a surcharge or penalty to nil following the late submission of returns or payments would serve only to incentivise such late submission.

Finally, it should be noted that the vast majority of property owners pay their LPT on time. There is no reason for property owners to put themselves in a position where they become liable to a penalty or surcharge.  If an individual has particular financial circumstances which cause difficulties in meeting his or her LPT liability, he or she may be entitled to a deferral of the tax or may avail of one of a number of payment methods to discharge the liability evenly over the course of the year.

Office of Public Works

Ceisteanna (75)

Bernard Durkan

Ceist:

75. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform if a company (details supplied) continues to be contracted to the OPW in respect of general maintenance; and if he will make a statement on the matter. [40383/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

Dublin Premier Carpentry Ltd T/A Dublin Carpentry and Construction Ltd submitted an application form on the 11th February 2019, for inclusion on the OPW list of approved Building Contractors for tendering on up-coming building projects, fit outs and refurbishment work.  This application was approved on the 30th April 2019 for the Dublin North, Dublin South, North East and South East regional lists for works up to €100K.  This list works on a rotational basis and Dublin Premier Carpentry Ltd T/A Dublin Carpentry and Construction Ltd have not yet been invited to tender.  There is no contractual commitment in this arrangement.

Minor Flood Mitigation Works and Coastal Protection Scheme Funding

Ceisteanna (76)

Michael Healy-Rae

Ceist:

76. Deputy Michael Healy-Rae asked the Minister for Public Expenditure and Reform if he will address the case of a person (details supplied) regarding flooding; and if he will make a statement on the matter. [40242/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

I am advised that local flooding issues are a matter, in the first instance, for each Local Authority to investigate and address. Kerry County Council may carry out flood mitigation works using its own resources or apply for funding under the OPW Minor Flood Mitigation Works and Coastal Protection Scheme.  The purpose of this scheme is to provide funding to Local Authorities to undertake minor flood mitigation works or studies to address localised fluvial flooding and coastal protection problems within their administrative areas. The scheme generally applies where a solution can be readily identified and achieved in a short time frame. Works funded under the scheme are then carried out under Local Authority powers and ongoing maintenance of the completed works is the responsibility of the Council.

Under the scheme, applications are considered for projects that are estimated to cost not more than €750,000 in each instance. Funding of up to 90% of the cost is available for approved projects.  Applications are assessed by the OPW having regard to the specific economic, social and environmental criteria of the scheme, including a cost benefit ratio and having regard to the availability of funding for flood risk management. Full details of this scheme are available on www.opw.ie

No application has been received for the location mentioned by the Deputy.

Public Spending Code

Ceisteanna (77)

Darragh O'Brien

Ceist:

77. Deputy Darragh O'Brien asked the Minister for Public Expenditure and Reform when the revised public spending code will be issued; and if he will make a statement on the matter. [40390/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

As part of the ongoing reform of Ireland’s public investment management systems, the Department of Public Expenditure and Reform is updating the Public Spending Code.  The purpose of this update is to strengthen the existing guidance to better align with the realities of project delivery and with a particular focus on improved appraisal, cost estimation and management.  The Office of Government Procurement is also conducting a review of construction procurement which will align with the updated Public Spending Code.

The updated Public Spending Code includes the following reforms:

- Strengthened and harmonised capital appraisal guidance;

- Greater clarity on governance  and roles and responsibilities; 

- New mechanisms to improve the accuracy of cost estimates;

- Improved project life cycle to better reflect the realities of project delivery; and

- Increased transparency through publication of business cases and evaluation reports.  

The revised central elements of the Public Spending Code relating to the appraisal and management of public capital projects will be published this Autumn. Further technical guidance building upon these central elements will follow later in 2019 and in 2020.

Departmental Expenditure

Ceisteanna (78)

Michael McGrath

Ceist:

78. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform the supplementary estimates that have been introduced by Department vote in each year since 2000, in tabular form; and if he will make a statement on the matter. [40398/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

Due to the scale of Government expenditure and the cash basis of Government accounting, the need for Supplementary Estimates can arise for a number of reasons, including policy decisions, timing issues and overspends. Supplementary Estimates are an important element of our expenditure management toolkit, allowing for the proper alignment of resources with allocations.

The attached document sets out the additional funding provided by way of Supplementary Estimates by Vote for each year from 2000 to 2018. The tables for each year reflect the Vote structure that was in place at that time. Where transfers of functions have occurred in the intervening years, these have not been accounted for in the tables.

Appendix 1 Supplementary Estimates

Departmental Budgets

Ceisteanna (79)

Michael McGrath

Ceist:

79. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform the amount provided in 2020 for demographic costs by Department; and if he will make a statement on the matter. [40401/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

The Mid-Year Expenditure Report 2019 sets out estimates of certain demographic pressures in the areas of Health, Social Protection and Education as pre-committed elements of the current expenditure baseline for the period to 2022. These are primary areas of current expenditure which are particularly impacted by demographic changes. For 2020 an amount of €0.45 billion has been allocated across these areas. This is presented at Departmental level in the following table.

Table 1: Demographic Allocations 2020

 

2020

€m

Education & Skills Group

54

Employment Affairs & Social Protection Group

260

Health Group

137

Total

451

These allocations are informed by the paper ‘Budgetary Impacts of Changing Demographics 2017 – 2027’, published by the Irish Government Economic and Evaluation Service (IGEES), which can be found on the IGEES website here: https://igees.gov.ie/budgetary-impact-of-changing-demographics-2017-to-2027/.

This paper covers a number of areas of expenditure, including pensions, child benefit, education provision and health schemes such as the Nursing Home Support Scheme. These pure demographic costs are factored in to Ministerial Expenditure Ceilings for Health, Social Protection and Education. As part of the 2019 Spending Review process, an update of this paper is due to be published shortly. This forthcoming paper will again look at the key areas of Health, Social Protection and Education and will examine demographic pressures in these areas over a ten year period.

Departmental Budgets

Ceisteanna (80)

Barry Cowen

Ceist:

80. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the value of the Supplementary Estimate that will be required in 2019 for health; and if he will make a statement on the matter. [40469/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

Managing expenditure within the overall fiscal parameters has been a key factor in ensuring that our fiscal targets have been achieved. A key responsibility of each Minister and Department is delivering public services efficiently and effectively within their budgetary allocations. The Department of Public Expenditure and Reform is in regular contact with all other Departments and Offices including the Department of Health to monitor expenditure projections against Departmental allocations and also within the overall fiscal parameters. Each month, the drawdown of funds from the Exchequer is reported against published expenditure profiles in the Fiscal Monitor, published by the Department of Finance.

While these monthly returns figures are still marginally under profile at end-September, the Minister for Health has signalled that there are significant pressures on his allocation this year and these issues are forming part of the Budget 2020 discussions. The estimated level of the supplementary estimate will be outlined in the course of the upcoming budgetary process, as is usual. 

However I have highlighted repeatedly to Minister Harris the need for staffing, PCRS and savings measures to be proactively managed by the Department of Health to ensure that there is no repeat of the magnitude of  last year's overrun. The range of new leadership and governance measures that have been put in place, including the appointment of a new CEO and Governance Board for the HSE, are important factors in ensuring the effective, professional management of Health spending in line with the allocations that have been authorised by Dáil Éireann, in order to deliver progressively improved health outcomes for the citizens of our country.