Tuesday, 8 Oct 2019

Written Answers Nos. 31-55

Mortgage Interest Relief Eligibility

Ceisteanna (31)

James Browne

Ceist:

31. Deputy James Browne asked the Minister for Finance the reason tax relief on a mortgage for a person (details supplied) was not permitted; and if he will make a statement on the matter. [40632/19]

Freagraí scríofa

Minister for Finance

Section 3 of Finance Act 2009 abolished the tax relief on interest paid on home loans that were taken out prior to 1 January 2003. The changes came into effect from 1 May 2009.

The person in question was in receipt of mortgage interest relief up to 30 April 2009. The relief was withdrawn from him in May 2009 because he failed to reply to Revenue’s request for supporting documentation to confirm his continued eligibility.

If the person wishes to discuss the situation with Revenue or requires any advice or clarification regarding his entitlement to the relief, he should contact the Tax Relief at Source (TRS) Helpline at telephone number 01-7383663.

Mutual Assistance Requests

Ceisteanna (32, 33)

Joan Burton

Ceist:

32. Deputy Joan Burton asked the Minister for Finance the number of requests invoking mutual agreement procedures received; the total amount of the profit adjustment involved; the tax involved; the number of cases agreed; the basis of agreement that is withdrawn, agreed in full, agreed in part; the tax cost, if it has been refunded or offset; the balance of cases open; and the amount of tax involved in those cases, which remain open in each of the years 2010 to 2018 and to date in 2019. [40659/19]

Joan Burton

Ceist:

33. Deputy Joan Burton asked the Minister for Finance the number of requests invoking mutual agreement procedures received by country in each of the years 2010 to 2018 inclusive and to date in 2019. [40660/19]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 32 and 33 together.

I am informed by Revenue that there are currently 41 open Mutual Agreement Procedure (“MAP”) cases, which relate to adjustments raised by tax authorities in Tax Treaty partner countries in respect of transfer-pricing or the attribution of profits to permanent establishments.

Some of these cases are at an early stage and Revenue has not yet received sufficient information to estimate the potential Irish tax relief that could result from closing the cases. For those cases where the potential relief is known, the maximum aggregate tax value of the relief could amount to €300m.

However, while this aggregate value is based on granting relief for the full foreign adjustments, the total relief ultimately granted is likely to be less, as a result of the withdrawal or reduction of the foreign adjustments concerned on the conclusion of the MAP negotiations.

The following table includes the number of MAP requests made by companies for each of the years 2010 to 2018 and to date in 2019, together with the number of requests where tax relief was granted and the tax value of the relief involved.

Year of request	Number of requests received*	Relief granted in full	Partial relief or other outcome	Tax value of relief**
2010	9	3	1 case where relief was partially granted, 4 cases were withdrawn, and 1 case where no relief was granted	€3.6m
2011	4	2	1 case was withdrawn, and 1 case where no relief was granted	€0.9m
2012	5	2	1 case where relief was partially granted, 2 cases were withdrawn	€0.9m
2013	6	4	1 case was withdrawn, and 1 case is still open	€4.8m
2014	13	6	3 cases were withdrawn, 1 case where no relief was granted, and 3 cases are still open	€22.9m
2015	9	2	2 cases were withdrawn, 1 case where no relief was granted, and 4 cases are still open	€1.8m
2016	10	3	7 cases are still open	€1.8m
2017	8	0	1 case where relief was partially granted, 2 cases were withdrawn, 1 case where no relief was granted, and 4 cases are still open	***
2018	18	1	1 case where relief was partially granted, 1 case was withdrawn, and 15 cases are still open	€5.9m
2019	7	0	7 cases are still open	-

*Number of requests received for MAP assistance is based on the application of the OECD MAP Statistics Reporting Framework published in 2016.

**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.

***As there is only one case involved, publication of the amount of tax relief granted is not considered appropriate as it could lead to identification of the company.

Publication of the potential maximum amount of the profit adjustments proposed by Tax Treaty partner countries is not considered appropriate as these are adjustments raised by each of the countries concerned unilaterally. The MAP negotiations undertaken by Ireland, on the other hand, endeavour to resolve the potential double taxation arising, working with the other countries bilaterally.

To observe taxpayer confidentiality, the OECD standard when reporting statistics is not to identify individual countries where there is a small number of MAP requests in relation to those countries. Since 2017, in accordance with the OECD standard for reporting statistics, the number of cases for an individual country is not identified unless the number of cases received in a particular year, when added to the opening number of cases for the year, is at least 5. During 2017, 3 MAP requests were received in respect of the US. The remaining MAP requests were in respect of 5 Tax Treaty partner countries. During 2018, 6 MAP requests were received in respect of Spain and 4 MAP requests were received in respect of the UK. The remaining MAP requests were received in respect of 6 other Tax Treaty partner countries.

Question Nos. 34 and 35 answered with Question No. 25.

Tax Reliefs Application

Ceisteanna (36)

Seán Fleming

Ceist:

36. Deputy Sean Fleming asked the Minister for Finance the reason some third level education courses that are eligible for tax relief have a €1,500 disregard in respect of amounts spent on fees which is not eligible for tax relief; and if he will make a statement on the matter. [40676/19]

Freagraí scríofa

Minister for Finance

Section 473A of the Taxes Consolidation Act 1997 provides for income tax relief in respect of qualifying tuition fees paid by an individual for a third level education course, subject to the terms and conditions set out in that section. The relief is granted at the standard rate of income tax (currently 20%), where an individual pays qualifying fees for an approved course, whether on his or her own behalf, or on behalf of another individual. Fees which are met from any other source, from a grant or scholarship fro example, are not allowable. In addition, examination fees, administration fees and registration fees do not qualify for relief.

The maximum amount of fees that can qualify for the relief is €7,000 per course. However, an amount must be disregarded from each claim, whether the claim is in respect of one or more students. “Qualifying fees” for the purposes of the relief mean tuition fees in respect of an approved course, at an approved college, reduced by the amount of the "student contribution". The disregarded "student contribution" amount is currently €3,000 in the case of a full-time course and €1,500 in the case of a part-time course, and it applies to all third level courses. This means the first €3,000 or €1,500, as appropriate, of all fees claimed by an individual taxpayer does not attract tax relief. As a claim may relate to one or more students, generally claimants will get full tax relief on the tuition fees for each of the second and subsequent students in their claim.

Full details of the relief, including the terms and conditions that apply, are set out on the Revenue website at:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx.

Tax Reliefs Data

Ceisteanna (37)

Maureen O'Sullivan

Ceist:

37. Deputy Maureen O'Sullivan asked the Minister for Finance the estimated amount that would be raised if discretionary tax reliefs were available only at the standard rate; the discretionary tax reliefs, the cost of each and the estimated saving in tabular form; his views on whether there would be advantages in pursuing this model in the future; and if he will make a statement on the matter. [40692/19]

Freagraí scríofa

Minister for Finance

I am informed by Revenue that the estimated yields from standard-rating discretionary tax reliefs currently available at the marginal rate are as shown in the following table. These yields are based on 2017 data, other than the estimate on the carry forward of excess reliefs under the High-Income Earners Restriction, where 2016 is the latest available year. The estimates are tentative and do not account for alterations in taxpayer behaviour.

Reliefs and Expenditures	Full Year Yield
	€m
Allowance for Seafarers	0.1
Covenants	0.5
Dispositions (including Maintenance Payments)	6
Donations to Approved Sporting Bodies	0.3
Employing A Carer	3
Health Expenses (Nursing Homes)	7
Carry forward of excess relief under the High-Income Earners Restriction	49
Pension Contributions	553
Rental Deduction for Leasing of Farm Land	5
Relief for expenditure on significant buildings and gardens	0.9
Stock Relief (General) (S666)	2
Stock Relief (for Young Trained Farmers) (S667B)	0.6
Stock Relief (for Registered Farm Partnerships) (S667C)	0.2
Permanent Health Benefit Premiums	1.8
Foreign Earnings Deduction	1.9
Start-up Relief for Entrepreneurs	0.8
Donations to Charities and Approved Bodies	12

For the purposes of evaluating tax expenditures, capital allowances, losses and expenses (wholly, exclusively and necessarily incurred in the performance of duties) are usually considered as part of the benchmark tax system. On this basis, they are excluded from the discretionary tax measures in the table above.

The costs of reliefs and expenditures are published on the Revenue website: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/index.aspx, which may be of interest to the Deputy.

Tax Collection

Ceisteanna (38)

Bernard Durkan

Ceist:

38. Deputy Bernard J. Durkan asked the Minister for Finance if arrangements can be made for the late collection of income tax by way of deferred payments in the case of a person (details supplied); if cognisance can be taken of the fact that they are in receipt of a social welfare payment; and if he will make a statement on the matter. [40701/19]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that it has already engaged with the person in respect of the liabilities in question and is willing to agree a payment arrangement that takes account of their personal circumstances, providing they engage on the matter. All activity in relation to the collection of outstanding liabilities from this individual has been placed on hold to allow the person time to make proposals for payment.

Dormant Accounts Fund

Ceisteanna (39)

Brendan Howlin

Ceist:

39. Deputy Brendan Howlin asked the Minister for Finance the value of the dormant accounts fund; and if he will make a statement on the matter. [40726/19]

Freagraí scríofa

Minister for Finance

I am informed by the National Treasury Management Agency, which manages the Dormant Accounts Fund, that at the end of December 2018, the value of the fund was €290 million.

Credit Unions

Ceisteanna (40)

Shane Cassells

Ceist:

40. Deputy Shane Cassells asked the Minister for Finance if he has liaised with credit unions and their representative bodies regarding the impact changes to the industry funding levy will have on local credit unions; and if he will make a statement on the matter. [40809/19]

Freagraí scríofa

Minister for Finance

On 28th August last, I held a meeting with the credit union representative bodies to discuss their views on the Industry Funding Levy and other credit union related matters. Over the course of the year I have also responded to direct and indirect correspondence from credit unions and representative bodies in relation to the Industry Funding Levy.

The Deputy might also wish to note that the Department of Finance, in collaboration with the Central Bank, held a public consultation on potential changes to the Credit Institutions Resolution Fund Levy. Following this review I published a press release on 1 October 2019 announcing a reduction in the levy from 0.0511% to 0.0274% of total assets of a credit union which will result in a reduction in the levy from €9 million in 2019 to €5 million in 2020. This is a 44 per cent reduction in the Resolution Fund levy for 2020 compared to 2019.

It is also important to note that as Minister for Finance I have reduced the Stabilisation Scheme Levy materially and that since 2017 no further levies have been charged by the Credit Union Restructuring Board (ReBo). I have previously committed to a further review of the Stabilisation Scheme in 2020.

Tax Code

Ceisteanna (41)

Catherine Murphy

Ceist:

41. Deputy Catherine Murphy asked the Minister for Finance if his attention has been drawn to an inequity in the way in which recoupments of overpayments made to staff is handled; if he will review this matter with revenue officials (details supplied); and if he will make a statement on the matter. [40810/19]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that employers are legally obliged to deduct Income Tax, Universal Social Charge (USC) and Pay Related Social Insurance from the emoluments of their employees. Any recoupment of overpaid salary by an employer from an employee is a matter between the employer and employee, including in relation to the timing and amounts of any repayments by the employee. However, the employer has obligations under tax law in this area and these obligations are not negated because of an overpayment of salary and the arrangements made to recoup the overpayment. In that context, it is important to note that the correct pay and tax details of an employee for a tax year must be on record, not only for the purposes of determining the employee’s tax liability, or eligibility for a tax refund, for the tax year in question, but also for the purposes of establishing entitlement to certain grants and means tested payments.

Revenue published guidance in the form of a Tax and Duty manual in August 2018, which set out Revenue’s position regarding the recoupment of an overpayment of emoluments by an employer from an employee

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-42/42-04-70.pdf. There was no change to Revenue policy in this area; this manual simply clarified Revenue’s position regarding overpayment of salary, as it had come to its attention that certain employers were operating outside of the underlying law in the Taxes Consolidation Act (TCA) 1997 and the Income Tax (Employments) Regulations 2018.

The applicable tax treatment regarding overpayments depends on whether the staff member makes the repayments in the current tax year, that is, the year to which the overpayment relates, or in a subsequent tax year. Where the overpayment is being recouped by means of a deduction from emoluments in the current tax year, the gross amount of the overpayment is simply deducted from gross emoluments. This has the effect of correcting the employee’s Income Tax, USC and PRSI record in the current year.

Where the overpayment is being recouped by means of a deduction from emoluments paid in a later year, the gross amount of the overpayment must be deducted from the net pay. Clearly, in certain situations, overpayments may be recouped over several years. Revenue will grant a refund of any tax or USC only when the overpayment relating to the tax year has been repaid, regardless of the amount of time it takes to recover the overpayment.

Section 865 of the TCA 1997 imposes a statutory 4-year time limit for making a claim for repayment of tax, USC and PRSI. Where the gross overpayment made by the employer is recouped from the net pay of the employee within the 4-year time limit from when the overpayment was made, then the individual has the opportunity to claim any tax overpaid back from Revenue within the statutory time limit. Moreover, in situations where an overpayment will not be recouped by the employer for more than 4 years, while Revenue must apply the statutory 4-year time limit for making a claim for repayment of tax, where an individual employee makes a valid claim for the tax year relevant to the overpayment (e.g. a claim relating to the year 2018 must be made by 31 December 2022), but the overpayment will not be totally recouped from him or her until sometime thereafter, Revenue can make the refund at a later date but only after the overpayment has been repaid in full to the employer.

Home Building Finance Ireland

Ceisteanna (42)

Thomas Byrne

Ceist:

42. Deputy Thomas Byrne asked the Minister for Finance the number of expressions of interest received by county for the home building finance Ireland lending scheme; the number of completed applications; the number of successful and unsuccessful applications; the amount of funding offered in loans; the number of units that will be built with funding that has been committed to by county; and if he will make a statement on the matter. [40853/19]

Freagraí scríofa

Minister for Finance

Home Building Finance Ireland ('HBFI') published its half-year update in mid-July having commenced operations on 28th January 2019

(https://www.hbfi.ie/uploads/files/HBFI-Mid-Year-Market-Update-June-2019.pdf). The key highlights to end June 2019 (after 5 months of operations) were as follows:

- More than 100 Expressions of Interest received from across the country.

- Over 30 full funding applications received from 17 counties.

- €41m in funding approved (7 facilities), translating to 228 units.

- 92% of full applications made to HBFI from outside of Dublin.

- Facilities approved in Counties, Dublin, Wicklow, Kildare, Laois and Clare.

- Projects range in size from 10 units to 73 units.

- Average size of facilities provided to end June was €6m.

The primary objective of HBFI is to increase the availability of funding in the market to developers for viable residential development projects. HBFI is proactively engaging with market participants and continues to develop a strong pipeline of transactions with several further transactions approved across the country since the half-year update. HBFI will provide detailed information for the period, June 2019 to December 2019 in early 2020.

Legislative Programme

Ceisteanna (43)

John Deasy

Ceist:

43. Deputy John Deasy asked the Minister for Finance the key aspects of the central bank (amendment) Bill referenced in the legislative programme; if the Bill will be published in draft form; the likely timing of the publication of the draft; the likely timing of the initiation of the Bill in the Houses of the Oireachtas; and if he will make a statement on the matter. [40854/19]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, the need to rebuild trust in the Banking sector is a priority for this Government, and I am committed to introducing a Central Bank (Amendment) Bill that will increase individual accountability in the financial sector. The proposed legislation will drive positive changes in terms of wider banking culture, greater delegation of responsibilities, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles.

I received the agreement of Government on 18th June last to begin the process of drafting heads of this Bill. This follows extensive preparatory work by my officials, in consultation with the Central Bank. This included consideration of the lessons to be learned from the UK’s Senior Managers Regime and Conduct Standards, given the close relationship between the two financial sectors and the similar common law legal system.

It is my intention to bring forward draft heads of Bill to Government for approval later this year and to then progress the Bill for debate in the Houses through pre-legislative scrutiny. However, this timetable is very much subject to Brexit developments given the priority for both my Department officials and their legal colleagues is planning for a potential no-deal Brexit.

The legal considerations of the Central Bank (Amendment) Bill are complex as the issues it addresses go to the core of individuals' rights to an adequate means of a livelihood, and the Bill's provisions are required to be constitutionally sound in the event of legal challenge.

Illicit Trade in Tobacco

Ceisteanna (44, 45)

Noel Grealish

Ceist:

44. Deputy Noel Grealish asked the Minister for Finance the maximum prison sentence for the crime of tobacco smuggling; the number of maximum prison sentences that have been imposed for tobacco smuggling in the past five years; and if he will make a statement on the matter. [40878/19]

Noel Grealish

Ceist:

45. Deputy Noel Grealish asked the Minister for Finance if his attention has been drawn to the findings of the Tobacco Products Research Survey 2018 carried out by the Revenue Commissioners that the percentage of illegal roll your own tobacco products has more than doubled in the past two years rising from 9% in 2016 to 21% in 2018; the action he will take to address this increase in the illegal trade of roll your own tobacco; and if he will make a statement on the matter. [40879/19]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 44 and 45 together.

I am advised by Revenue that the annual survey carried out by Ipsos MRBI for Revenue and the Health Service Executive provides an indication of the amount of illegal tobacco products consumed in Ireland. I understand that the 2018 survey reported that 21% of the roll your own tobacco products were illegal, which is higher than in the 2017 figure of 15%, and the 2016 figure of 9%.

Revenue has indicated to me that the results of the survey in relation to the volume of non-Irish duty paid roll your own tobacco is a concern, and combatting the illegal tobacco trade continues to be a priority for them. Revenue uses a range of measures designed to identify and target those involved in the smuggling, supply or sale of illicit products, with a view to disrupting the supply chain, seizing the illicit products and, wherever possible, prosecuting the persons involved. Revenue’s strategy includes developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies, and ensuring the optimum deployment of resources on a risk focused basis.

Revenue and An Garda Síochána work together on an ongoing basis in acting against tobacco crime, and both organisations cooperate closely with their Northern Ireland counterparts, in the framework of the North-South Joint Agency Task Force, to target the organised crime groups that are responsible for a large proportion of this form of criminality. In addition, Revenue works closely with the relevant authorities in other jurisdictions, the European Anti-Fraud Office, Europol and other international organisations, including the World Customs Organisation, in the ongoing programmes of action at international level to combat tobacco crime.

Revenue’s extensive programme of work against the illegal tobacco trade has achieved a considerable level of success. During the period 2016 to end-August 2019, 157.8 million cigarettes and 7,826 kilograms of tobacco were seized. In addition, 104 tonnes of raw tobacco were seized when two illicit cigarette factories were discovered in Co. Louth in 2018 and 2019.

Revenue seeks to prosecute in any case where a person can be connected with the trade in illegal tobacco products. In 2018, there were 19 convictions connected with the smuggling of illegal tobacco products, as well as 58 convictions relating to offences such as holding or selling illegal tobacco products. In the period January to September 2019, there were five convictions connected with the smuggling of illegal tobacco products, as well as 38 convictions relating to offences such as holding or selling of illegal tobacco products. I understand that there have also been three convictions arising from the discovery of an illegal cigarette factory in Co. Louth in March 2018.

Section 119 of the Finance Act 2001, as amended, sets out the penalties imposed for the smuggling of tobacco into the State. The maximum prison sentence that can be imposed is twelve months on summary conviction in the District Court, and five years on indictment in the Circuit Court.

I am advised by Revenue that for the period requested by the Deputy, no such maximum sentences were imposed by the Courts. The maximum summary term imposed over the past five years was nine months (suspended for eighteen months) and the maximum indictable term was two years, (fully suspended).

A fine may be imposed by the Courts in addition to a term of imprisonment and any tobacco seized is liable to forfeiture, as is any vehicle used in transporting the product. The following table sets out the number and value of fines imposed by the Courts in the past five years for the Deputy’s information.

Year	Number of Cases	Total Court Fines
2015	27	€70,200
2016	24	€57,500
2017	22	€54,500
2018	15	€40,000
2019 (YTD 30.09.2019)	4	€10,000

The Government has ensured through the Finance Acts over recent years that Revenue has the necessary statutory powers to tackle the illicit tobacco trade. I am satisfied that the current legislative framework provides an effective basis for undertaking this important work but I am open to consider any proposals that Revenue may bring forward for further enhancements in that regard in the future.

Brexit Preparations

Ceisteanna (46)

John Lahart

Ceist:

46. Deputy John Lahart asked the Minister for Finance if assurances are in place that life insurance companies based in the UK will honour their policies in the event of a no-deal Brexit; and if he will make a statement on the matter. [40909/19]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, upon withdrawal from the EU and in the absence of a political agreement between the EU and the UK, UK (including Gibraltar) insurance undertakings, including life insurance undertakings, and insurance distributors will lose their right to conduct business by way of Freedom of Establishment (FOE) and Freedom of Services (FOS) under the EU regulatory framework. According to the European Insurance and Occupational Pensions Authority’s (EIOPA) Opinion of 28 June 2018, insurance contracts concluded before the Withdrawal date by UK undertakings by way of FOE or FOS are in principle valid after that date. What has been in doubt however is the ability of insurance undertakings and insurance distributors (i.e. brokers) to continue performing certain obligations and activities and ensure service continuity with regard to such contracts, e.g. pay out claims.

The key response by European and domestic regulatory authorities has been to instruct insurance firms impacted by Brexit to make and implement contingency plans to ensure that they can continue to provide services to their EU customers post-Brexit. In this regard, the Central Bank has been working closely with the regulatory authorities in the UK as well as impacted insurance undertakings from the UK to ensure that they have appropriate contingency plans in place to allow them to continue to service existing contracts in Ireland. It is understood that a significant majority of UK/Gibraltar insurance undertakings have prepared appropriate Brexit contingency plans which are expected to be implemented in advance of Brexit. However, there was a legitimate concern, that a small number of such undertakings as well as a number of insurance distributors will either not have completed such contingency plans by the date of Brexit, or had made a decision not to implement them in the first place. Such a scenario as you will appreciate gives rise to a risk in respect of their ability to continue servicing the insurance policies they have sold, in the event of a no-deal Brexit.

The Government has dealt with this small number of undertakings through the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019, which was enacted earlier this year. This legislation allows any UK/Gibraltar-authorised insurance entity to continue the administration of both life and non-life insurance policies written in Ireland after Brexit. This “run-off” regime applies even in the event of a no-deal Brexit and for a maximum period of three years from the date of Brexit. It should be noted that, under this regime, no new policies or renewals are allowed to be written by UK-authorised insurers after a no-deal Brexit unless they receive authorisation from an EU/EEA member state (including Ireland).

I would urge any consumer that has concerns about their life insurance policy to contact their insurance provider, who should be able to provide them with details of their arrangements to ensure continuity of service. This includes whether the consumer can amend policies, or how the company will pay claims associated with policies, written prior to Brexit.

Finally, I would note that the UK’s Financial Conduct Authority, in a recent speech, reaffirmed their commitment to prioritising consumer protection in financial services. The FCA has stated that UK insurers should pay claims on existing policies wherever the policyholder happens to be located. I welcome this commitment and would expect that relevant insurers would honour policies written to Irish consumers.

VAT Rate Reductions

Ceisteanna (47)

Pat Casey

Ceist:

47. Deputy Pat Casey asked the Minister for Finance his views on the restoration of the VAT rate to 9% to improve competitiveness in view of the fact this is the highest rate of VAT on tourist accommodation in the EU; the Brexit effects on British visitors; and if he will make a statement on the matter. [40910/19]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

Insurance Costs

Ceisteanna (48)

Pat Casey

Ceist:

48. Deputy Pat Casey asked the Minister for Finance the rank of Ireland in the EU in terms of the level of motor insurance and business insurance costs; and if he will make a statement on the matter. [40914/19]

Freagraí scríofa

Minister for 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. Indeed, there is no official centralised source of such data within the European Union that provides for rankings in relation to insurance costs between countries. Therefore, I am unable to provide the Deputy with Ireland’s ranking on the two issues raised.

The Deputy should note that it would be very difficult to collect and compare such information as the level of motor and business insurance costs will be determined by a range of different factors. For example, in drawing any comparison between average insurance premiums across EU member states, it should be borne in mind that variation in premiums will reflect factors such as the economic and regulatory environment in each country, the legal system, health and safety standards etc. An example of one of these differences is that settlement awards for minor and moderate injuries are significantly higher in Ireland than in the UK, as was determined by the Personal Injuries Commission.

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. Going forward, there are some further measures that will be carried out by Government over the next few months. These include the following:

- Commencement of the remaining parts of the Judicial Council Act 2019 , which provides for the establishment of a Personal Injuries Guidelines Committee. It is now matter for the Judiciary to put in place the Judicial Council and to operationalise the Personal Injuries Guidelines Committee, which will introduce new guidelines to replace the Book of Quantum; this is an essential step if award levels are to be reduced.

- The completion of the Central Bank’s feasibility study into adding Employer and Public Liability insurance to the National Claims Information Database (NCID). In addition, the first report of the NCID, on motor insurance, is due by the end of the year;

- The completion of the CSO’s feasibility study into tracking the cost of business insurance, as it does with other forms of insurance including motor. The CSO is due to report back to my Department by the end of the year;

- The Law Reform Commission’s work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries. It is expected that there will be a public consultation on this by the end of the year; and,

- The furtherance of measures necessary to implement Pre-Action Protocols (PAPs) for personal injury cases, beginning with medical negligence cases.

In addition, my colleague, Minister of State D’Arcy, has been engaging with insurers in order to seek a commitment that they will reduce premiums and widen their risk appetite should there be a recalibration of award levels downwards once the new personal injury guidelines are introduced.

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.

Mortgage Book Sales

Ceisteanna (49, 50)

Brendan Ryan

Ceist:

49. Deputy Brendan Ryan asked the Minister for Finance if split mortgages are considered non-performing loans even when all payments have been made on time and in full; and if he will make a statement on the matter. [41025/19]

Brendan Ryan

Ceist:

50. Deputy Brendan Ryan asked the Minister for Finance his views on whether split mortgages should be sold to venture capitalist funds among tranches of non-performing loans even when all payments have been met on time and in full; and if he will make a statement on the matter. [41026/19]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 49 and 50 together.

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. According to the Central Bank of Ireland, the average NPL ratio of the domestic Irish banks was 7% at end-June 2019 having stood at more than 30% at peak in 2013. In volume terms, NPLs in the domestic Irish banks have now fallen by €70.2 billion (82%) from peak in 2013. A major contributor to this has been the almost 109,000 mortgage restructures, including split mortgages, which are currently in place.

Despite this progress, more work is required before the NPL ratios at the Irish banks reach the European average of under 4%.

It is important to reiterate that the protections in place for all borrowers before a sale remain unchanged. For example, Start Mortgages and Pepper, the firms involved in the loan sales transacted by PTSB since 2018, 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 on Mortgage Arrears. Furthermore, assurances have been given that the terms of a restructure agreed before these sales took place will continue to be honoured.

In addition, in 2018 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 last 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 your question on the classification of certain mortgages as NPLs, this is a matter for the banks to determine on a case-by-case basis. In making this determination, the Central Bank has previously confirmed that "credit institutions are required to comply with a range of classification requirements including the Regulatory definition of default as per Article 178 of the Capital Requirements Regulation; the Accounting definition of impaired as per the applicable accounting framework, and the Supervisory definition of non-performing as per the EBA ITS* on forbearance and non-performing exposures."

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.

*ITS - Implementing Technical Standard.

State Aid

Ceisteanna (51)

Noel Rock

Ceist:

51. Deputy Noel Rock asked the Minister for Finance if the State will be able to recoup the €3.9 million costs associated with setting up an escrow account in 2018 in relation to a company (details supplied); and if he will make a statement on the matter. [41042/19]

Freagraí scríofa

Minister for Finance

I take it that the Deputy is referring to the recent report from the Comptroller and Auditor General which outlines the costs associated with the recovery process and the establishment of the escrow fund.

As outlined in the report, these costs were incurred by the Department of Finance, Revenue Commissioners, Chief State Solicitor’s Office, NTMA and the Central Bank of Ireland.

In April 2018, the Minister for Finance and ASI and AOE entered into an escrow framework deed giving legal effect to arrangements for the recovery of the alleged State aid. The deed provides that each party pays its own fees and expenses incurred in respect of the drafting of the deed. Therefore it is not possible for the State to recoup costs incurred by it in the establishment of the escrow fund.

Vehicle Registration Data

Ceisteanna (52)

Brendan Smith

Ceist:

52. Deputy Brendan Smith asked the Minister for Finance the estimated loss of revenue since 2016 due to the reduction in new car sales; the corresponding increase in imported second-hand vehicles; the measures he plans to take to protect the motor trade and its substantial employment level; and if he will make a statement on the matter. [41100/19]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that while there has been a shift in purchaser behaviour from new to used cars since 2016, overall Vehicle Registration Tax (VRT) receipts have increased as set out in the following table. VRT receipts for 2019 are also expected to increase on previous years based on trends to September.

However, Value-Added Tax (VAT) receipts in the sector have fallen relative to 2016 due to the reduction in the number of new cars sold.

Year	New Cars Registered	Used Cars Registered	VRT (New Cars)	VRT (Used Cars)	Total VRT	Total VAT
			€m	€m	€m	€m
2016	141,660	69,301	588	177	765	750
2017	126,628	91,033	552	247	799	706
2018	121,092	98,415	559	271	830	699
2019 (9 months)	110,023	81,115	582	234	816	658

Brexit Preparations

Ceisteanna (53)

Lisa Chambers

Ceist:

53. Deputy Lisa Chambers asked the Minister for Public Expenditure and Reform the date by which all the necessary Brexit infrastructure is expected to be completed by the Office of Public Works by port and airport in tabular form; and if he will make a statement on the matter. [40664/19]

Freagraí scríofa

Minister of State at the Department of Public Expenditure and Reform

As a consequence of Brexit, physical infrastructure will be required for customs, SPS and health checks and controls at Dublin Port, Rosslare Europort and Dublin Airport. Preparations have been taking place at each of the three locations for two scenarios: if a withdrawal agreement is reached; and if there is a no-deal Brexit.

In the event of a no-deal Brexit, interim infrastructure will be required immediately pending the completion of the permanent infrastructure required for the longer term.

Detailed work has been underway across Government for more than a year involving the Office of Public Works; the Revenue Commissioners; the Department of Agriculture, Food & the Marine; the Department of Health; and the Department of Transport, Tourism & Sport.

In the lead up to the end of March and mid-April Brexit deadlines, arrangements were finalised to ensure that sufficient infrastructure was in place in Dublin Port, Rosslare Europort and Dublin Airport to provide an emergency response to a no-deal Brexit. Since then work has continued to enhance further these facilities, and details of the infrastructure for the end of October Brexit deadline are set out in the following table.

Location	Facilities Provided
Dublin Port	25 inspection bays for SPS and food safety checks and Revenue turnout shed; Eight Seal Check Booths for documentary and identity check facilities; A public office and parking for a total of 128 HGV’s with associated driver facilities; Overflow parking spaces for a further 77 HGVs; Live animal Border Control Post (BCP); Pet inspection facilities; Office accommodation.
Rosslare Europort	Four inspection bays for SPS checks; Parking for 38 HGVs; Two Seal Check Booths for documentary and identity check facilities; A public office and drivers facilities; Live animal BCP; Pet inspection facilities; Office accommodation.
Dublin Airport	Inspection facilities for SPS and food safety checks; as well as for the inspection of live animals.

Catchment Flood Risk Assessment and Management Programme

Ceisteanna (54)

Catherine Connolly

Ceist:

54. Deputy Catherine Connolly asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 87 of 19 September 2019, the person or body to which the Office of Public Works applied for a licence to carry out the works in question; the person or body that made the appropriate assessment screening determination of no likely significant effects; the location the licence application for the works in question may be viewed by the public; and if he will make a statement on the matter. [40688/19]

Freagraí scríofa

Minister of State at the Department of Public Expenditure and Reform

In 2017, the Office of Public Works made an application to the National Parks and Wildlife Services (NPWS) for consent to carry out maintenance activities involving the removal of silt and emergent vegetation in the Meelick Weir area. As part of the assessment process, a screening for Appropriate Assessment was undertaken by the NPWS. The application for consent for this work can be requested directly from the NPWS.

It is important to note that while the screening for Appropriate Assessment carried out by the NPWS determined that there were no likely significant impacts from the work on Natura 2000 sites and while consent was granted by the Minister for Culture, Heritage and the Gaeltacht in 2017, the work could not be undertaken during the period for which consent was given and this work was deferred.

In September this year, the removal of reeds and emergent vegetation was undertaken as part of the work for the restoration of Meelick Weir and its walkway for which planning consent was received by Waterways Ireland. Details of the planning application and related documentation, including the relevant environmental material, are available on Galway County Council’s website at:

http://www.eplanning.ie/GalwayCC/AppFileRefDetails/161322/0.

Flood Risk Management

Ceisteanna (55)

Pearse Doherty

Ceist:

55. Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform if a follow-up meeting between his Department, OPW officials, local Oireachtas members and a committee (details supplied) in County Donegal is being planned to discuss a major capital flood mitigation project; if so, when such a meeting will take place; and if he will make a statement on the matter. [40763/19]

Freagraí scríofa

Minister of State at the Department of Public Expenditure and Reform

Fifteen projects were identified in County Donegal arising from the Flood Risk Management Plans that I announced in May 2018. Following consultation and discussions between the Office of Public Works (OPW) and Donegal County Council (DCC), six of the Donegal projects have been selected to be progressed in the first phase of implementation.

The proposed flood relief scheme for Ballybofey and Stranorlar is not in the first phase of projects to be advanced. However, both the OPW and Donegal County Council will work closely to ensure that the project will be progressed as early as possible. The proposed scheme for Ballybofey and Stranorlar consists of hard defences and improvement of channel conveyance.

Funding of €157,500 was approved in 2018 to Donegal County Council under the OPW's Minor Flood Mitigation Works and Coastal Protection Scheme for a project at Ballybofey and Stranorlar. The works comprise the removal of vegetation and trees on the embankment, the removal of silt, gravels and boulder deposits and construction of pumps / pumping areas and ground investigation works along the flood embankments. The project is being led by Donegal County Council.

No arrangements are currently made or planned for a follow up meeting but I am happy to have a further meeting to discuss this matter subject to existing diary commitments.