Wednesday, 3 Jun 2020

Written Answers Nos. 51-75

Vehicle Registration Tax

Ceisteanna (51, 57, 65)

Pearse Doherty

Ceist:

51. Deputy Pearse Doherty asked the Minister for Finance when vehicle registration tax offices will reopen. [8375/20]

Fergus O'Dowd

Ceist:

57. Deputy Fergus O'Dowd asked the Minister for Finance further to Parliamentary Questions Nos. 50 and 51 of 20 May 2020, if owners of UK-registered cars bought and awaiting re-registration through the VRT service can drive legally without fear of seizure until such time that NCT centres reopen and VRT inspections can be undertaken; and if he will make a statement on the matter. [8527/20]

Colm Burke

Ceist:

65. Deputy Colm Burke asked the Minister for Finance the procedure being put in place to arrange for cars which are imported to be inspected in order that the VRT can be assessed and same can be placed on the market; and if he will make a statement on the matter. [8612/20]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 51, 57 and 65 together.

I am informed by Revenue that, in respect of registrations and examinations carried out in the National Car Testing Service Centres, a resumption proposal that was submitted by the Road Safety Authority to the Department of Transport, Tourism and Sport has been accepted and will see a limited number of Centres resume on 8 June for NCT testing. Currently, it is expected that the VRT service will recommence on a scaled back basis from 29 June. As details become available they will be updated on the Revenue website.

I am advised by Revenue that the requirement to register cars brought into the State within 30 days of their arrival is not being enforced by Revenue while the NCTS Centres are closed and the possibility of registering cars is not available; vehicles that cannot be registered in these circumstances will not be seized by Revenue on registration grounds.

I am also informed by Revenue that registration by authorised dealers on the Revenue Online Service (ROS) of new cars and cars that have been pre-inspected has not been interrupted and such vehicles should be registered before delivery to a customer.

Question No. 52 answered with Question No. 40.

Question No. 53 answered with Question No. 41.

Disabled Drivers and Passengers Scheme

Ceisteanna (54)

Seán Fleming

Ceist:

54. Deputy Sean Fleming asked the Minister for Finance when a fuel grant in respect of a motor vehicle under the disabled drivers and passengers scheme will issue to a person (details supplied); and if he will make a statement on the matter. [8457/20]

Freagraí scríofa

Minister for Finance

I previously replied to the Deputy on this matter in Question number 68 of 20 May 2020.

In my reply, I confirmed to the Deputy that the grant application in question was processed by Revenue and submitted to my Department for payment on 2 March 2020 and was subsequently paid by my Department in March 2020. The amount of fuel grant paid was €528.96.

Mortgage Lending

Ceisteanna (55)

Mattie McGrath

Ceist:

55. Deputy Mattie McGrath asked the Minister for Finance if provisions will be made for mortgage applicants who were mortgage approved prior to Covid-19 and have subsequently become unemployed and are now not permitted to draw down their mortgage by their bank (details supplied); and if he will make a statement on the matter. [8499/20]

Freagraí scríofa

Minister for Finance

The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness.  The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement.  The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement.  The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders.  Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. 

Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender and I as Minister for Finance cannot instruct banks in that regard.

Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly if they have any queries or concerns about the impact of COVID-19 on their mortgage application.  The Central Bank has also indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.

Vehicle Registration Tax

Ceisteanna (56)

Frank Feighan

Ceist:

56. Deputy Frankie Feighan asked the Minister for Finance if an issue (details supplied) regarding car dealerships will be investigated with the Revenue Commissioners; if a successful resolution will be expedited; and if he will make a statement on the matter. [8518/20]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that the issue to which the Deputy is referring has arisen because the National Car Testing Service (NCTS) is temporarily closed due to the COVID-19 pandemic. The NCTS manages the car registration process for Vehicle Registration Tax (VRT) purposes on behalf of Revenue.

Revenue has also confirmed that it has engaged with the NCTS and with the car dealership in question in relation to the specific difficulties to which the Deputy is referring and expects the matter to be resolved very shortly. 

Finally, I am aware that my colleague the Minister for Transport, Tourism and Sport has accepted recommendations from the Road Safety Authority that will see some of the NCTS centres resume car testing from 8 June 2020 with a scaled VRT service to resume from late June.

Question No. 57 answered with Question No. 51.

Bank Charges

Ceisteanna (58)

Steven Matthews

Ceist:

58. Deputy Steven Matthews asked the Minister for Finance if his attention has been drawn to an ongoing issue which businesses are facing with regard to banking charges for direct debits that are failing due to customers of the business either cancelling or not having sufficient money to pay them (details supplied). [8566/20]

Freagraí scríofa

Minister for Finance

Covid 19 has presented unprecedented difficulties for consumers and businesses alike. The Central Bank expects that all regulated firms take a consumer-focused approach and act in their customers’ best interests at all times. Both the Central Bank and I encourage firms to take all possible measures to assist their customers during this difficult time and to help their customers to the greatest extent possible while they work through this public health emergency. It should be noted that the charging of fees is a commercial decision for regulated entities, within the parameters of the regulatory framework.  I have no statutory role in relation to the charges applied by credit institutions. Under Section 149 of the Consumer Credit Act 1995, as amended, the responsibility for the regulation of bank fees lies with the Central Bank of Ireland.

Mortgage Lending

Ceisteanna (59)

Steven Matthews

Ceist:

59. Deputy Steven Matthews asked the Minister for Finance if his attention has been drawn to issues that some customers are facing with non-bank mortgage providers in which the provider has refused requests for a mortgage break necessitated by the Covid-19 crisis due to the customer being in arrears previously regardless of the level of arrears. [8567/20]

Freagraí scríofa

Minister for Finance

I have been informed by the Central Bank of Ireland (the Central Bank) that for all regulated entities, including banks, retail credit and credit servicing firms, the Central Bank is focused on ensuring that COVID-19 related payment breaks operate in borrowers’ best interests and are in line with regulatory requirements.

Payment breaks give customers the opportunity to postpone or reduce their repayments on their mortgage, personal or business loans, providing breathing space for borrowers from the severe income shock many households and businesses are experiencing.

The Central Bank have stated that payment breaks should be a generally available option to affected borrowers, including those borrowers already in financial distress, forbearance and/ or in an Alternative Repayment Arrangement (ARA).  Those borrowers in arrears but not in a performing restructure should be considered on a case by case basis, and be granted a payment break if that is an appropriate short-term support for their circumstances. Regulated firms should ensure approaches are consistent with existing arrears strategies and operations.

The Central Bank of Ireland (the Central Bank) expects all banks, retail credit and credit servicing firms to take a consumer-focused approach and to act in their customers’ best interests.

Wage Subsidy Scheme

Ceisteanna (60)

Aodhán Ó Ríordáin

Ceist:

60. Deputy Aodhán Ó Ríordáin asked the Minister for Finance if he will report on the exclusion of persons and businesses (details supplied) from the temporary wage subsidy scheme due to administrative errors caused by staff turnover in cases in which the payment dates of wages would otherwise have fallen within the remit of the scheme. [8580/20]

Freagraí scríofa

Minister for Finance

The Temporary Wage Subsidy Scheme (TWSS) is an emergency measure to deal with the impact of the COVID-19 pandemic on the economy. It builds on data returned to Revenue through the PAYE system and as such is a fully automated solution. The automated solution, which was developed in a very short timeframe in response to the pandemic, is designed around the dates specified in the legislation. The timelines require that employees were on the employer payroll at 29 February 2020 and that the business had fulfilled its PAYE reporting obligations for February 2020 before 15 March 2020.

Revenue recently revised the eligibility conditions for the scheme under its care and management provisions, which extended the 15 March 2020 deadline to ‘before’ 1 April 2020. However, these concessionary arrangements can only operate for future payrolls and are not available on a retrospective basis for previous payrolls.

I am advised by Revenue that the business in question could not previously access the TWSS because it did not complete its payroll submission for February 2020 until after the revised ‘before’ 1 April 2020 deadline. However, having reviewed the exceptional circumstances that resulted in the late filing of the February 2020 payroll submission, Revenue is arranging access to the TWSS for the company. Revenue has also confirmed that it has made direct contact with the company to clarify certain matters.

Question No. 61 answered with Question No. 41.

Question No. 62 answered with Question No. 47.

Business Regulation

Ceisteanna (63)

Aindrias Moynihan

Ceist:

63. Deputy Aindrias Moynihan asked the Minister for Finance the procedure for a business (details supplied) to obtain a licence to sell directly to the public and not through an intermediary; if he is considering changes to the licensing laws to make it easier for businesses to sell directly to the public; and if he will make a statement on the matter. [8605/20]

Freagraí scríofa

Minister for Finance

The sale of intoxicating liquor to consumers is regulated under the Liquor Licensing laws.  Any legal changes in this area would be a matter for my colleague, the Minister for Justice and Equality.  

I am advised by Revenue that its function in relation to liquor licences, is limited to the issue of the annual licence on presentation of the appropriate court authorisation, tax clearance and payment of the duty on the licence.

In instances where a licenced and authorised manufacturer of spirits aims to sell directly to the public online, they would need to apply for a Retailer of Spirits Off-Licence which allows the sale of alcohol in retail quantities in closed containers for consumption off the premises, and or, depending on the quantities being sold, a Wholesaler Dealer in Spirits Licence which entitles the licensee to sell alcohol in wholesale quantities.

Covid-19 Pandemic Supports

Ceisteanna (64)

Brendan Howlin

Ceist:

64. Deputy Brendan Howlin asked the Minister for Finance if a similar mechanism could be found to assist businesses which are seasonal by nature such as a company (details supplied) and that were not in operation on the designated day in view of the commitment to find a solution to the issue of women returning to the workforce at the end of maternity leave and their entitlement to be brought within the terms of the temporary wage subsidy scheme. [8610/20]

Freagraí scríofa

Minister for Finance

The TWSS is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy.

Of necessity, the underlying legislation and the scheme itself have been developed very quickly, having regard to the overarching urgent Government objective of getting much needed assistance to employers and employees, where businesses have been seriously affected by the pandemic and the necessary restrictions introduced to fight the spread of the Covid-19 virus. 

The TWSS ultimately gives a sum to employers to cover a portion of their wage bill in circumstances where the employer’s business has been negatively impacted by the restrictions that have had to be introduced to stop the spread of the COVID-19 virus. 

The sum the employer receives is based on the employees who were on their payroll on 29 February 2020, the net salary such employees received in January and February 2020, as well as the extent to which the employer remains able to continue to discharge their legal obligation to pay their employees’ salaries.

In this way it is intended to maintain the net pay of as many employees as possible at this time and to preserve the link between the employee and employer insofar as is possible, as well as firm viability, through this truly exceptional period.

One of the core principles of the scheme that is necessary to prevent abuse is the requirement that the employees for which a claim is submitted must be on the payroll of the employer as at 29 February 2020.  Thus, where an individual commenced a new employment after 29 February 2020 that salary cannot be included in the calculation of the sum that is available to the employer under the TWSS.

There are no plans to revisit the core criteria. The TWSS is built upon historic PAYE returns made to Revenue – this is fundamental to the operational of the scheme which has given support to nearly 500,000 employees. 

Question No. 65 answered with Question No. 51.

Mortgage Lending

Ceisteanna (66)

Stephen Donnelly

Ceist:

66. Deputy Stephen Donnelly asked the Minister for Finance if the banks are allowed to withdraw mortgage offers due to applicants being put on the temporary wage subsidy scheme (details supplied). [8654/20]

Freagraí scríofa

Minister for Finance

The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness.  The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement.  The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement.  The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders.  Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.   

Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender and I as Minister for Finance cannot instruct banks in that regard.

Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application.  The Central Bank has also indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.

Covid-19 Pandemic Supports

Ceisteanna (67)

Brendan Smith

Ceist:

67. Deputy Brendan Smith asked the Minister for Finance if he will give consideration to the requests of an association (details supplied) regarding the urgent need to provide support to a sector due to the severe difficulties facing this industry as a result of the Covid-19 pandemic; and if he will make a statement on the matter. [8682/20]

Freagraí scríofa

Minister for Finance

The Government is fully aware of the unprecedented impact that the coronavirus is having on business and people’s livelihoods. In this regard a range of measures have been introduced to provide income support to those who need it while also giving confidence to employers to retain the link with employees so that when this crisis passes - and it will pass – our people can get back to work as quickly and seamlessly as possible.  

In addition to current support measures, my officials are examining a range of possible measures to ensure that the economy is in a position to recover rapidly while maintaining a stable tax base. 

I understand that my colleague, the Minister for Transport, Tourism and Sport, will be addressing the issues raised in parts three, four and five of the details supplied. 

Mortgage Lending

Ceisteanna (68)

Mary Lou McDonald

Ceist:

68. Deputy Mary Lou McDonald asked the Minister for Finance if his attention has been drawn to cases in which the Central Bank is advising retail banks and mortgage brokers that pending mortgage applications cannot be approved in cases in which applicants' payslips show receipt of temporary wage subsidy scheme payments; and if he will make a statement on the matter. [8691/20]

Freagraí scríofa

Minister for Finance

The Central Bank has indicated that it has not advised retail banks and mortgage brokers that pending mortgage applications cannot be approved in cases in which applicants payslips show receipt of temporary wage subsidy scheme payments.

The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness.  The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement.  The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement.  The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders.  Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. 

Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender and I as Minister for Finance cannot instruct banks in that regard.

Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application.  The Central Bank has also indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.

Electric Vehicles

Ceisteanna (69)

Seán Sherlock

Ceist:

69. Deputy Sean Sherlock asked the Minister for Finance if a grant scheme to purchase e-bikes will be introduced. [8693/20]

Freagraí scríofa

Minister for Finance

As Minster for Finance I do not offer any grant schemes for personal transportation.

However, I can advise the Deputy that the Office of the Revenue Commissioners operates a Cycle to Work Scheme.  New bicycles and pedelecs (electrically assisted bicycles which require some effort from the cyclist) are included in the Cycle to Work Scheme.  Further details on the Scheme can be found at https://www.revenue.ie/en/jobs-and-pensions/taxation-of-employer-benefits/cycle-to-work-scheme.aspx

Question No. 70 answered with Question No. 41.

Tax Yield

Ceisteanna (71, 116)

Michael McGrath

Ceist:

71. Deputy Michael McGrath asked the Minister for Finance the tax receipts for each month of 2020 to date in view of the fact that it does not seem to be set out in the Fiscal Monitor April 2020; the tax profile for each of the 12 months; the same information broken down into each tax heading in tabular form; and if he will make a statement on the matter. [8719/20]

Michael McGrath

Ceist:

116. Deputy Michael McGrath asked the Minister for Finance the taxation receipts that were expected for January, February, March and April 2020; the amount actually taken in as regards Table 1 in the fiscal monitor in April; the expected amount from taxation receipts in February 2020 as set out in the fiscal monitor in February; and if he will make a statement on the matter. [9739/20]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 71 and 116 together.

The monthly tax receipts to end-April 2020 are available at my Department's databank at http://databank.finance.gov.ie/. This information is presented in the tables for the Deputy's convenience. 

In ordinary circumstances, my Department produces monthly taxation profiles at the beginning of the year based on the previous Budget's taxation forecasts. Two factors contributed to the process differing in 2020. In the first instance, the forecasts in Budget 2020 were carried out on the assumption of a 'disorderly Brexit'. As this assumption became outdated, my Department published a high-level technical update as part of the Medium Term Fiscal Strategy published in January. From this technical update, the initial monthly profiles for tax receipts were derived.

Following this, due to the unprecedented Covid-19 situation, it was necessary to substantially update the monthly profile of expected tax receipts for 2020, which was carried out on the basis of the forecasts published in the Stability Programme Update 2020. These profiles take into account the actual Exchequer tax outturn until end-April and attempt to reflect the potential impact of the pandemic on receipts.

As such, there are no revised monthly taxation profiles for the months January to April. Furthermore, unallocated receipts are not profiled. These receipts are allocated to the appropriate tax headings by the Revenue Commissioners over the course of the year. The May Exchequer returns, and all subsequent publications, will include a comparison of the tax outturn to the revised profiles.

Table 1 displays tax receipts to end-April. The revised profiles for monthly taxation receipts are presented in Table 2. The previous profiles, which were based on the Medium Term Fiscal Strategy technical update, are presented in Table 3.

Table 1: monthly tax receipts to end-April 2020, € thousands 

	January	February	March	April	Total
Customs	23,800	28,600	26,000	21,700	100,100
Excise Duty	511,968	369,066	401,936	308,709	1,591,679
Capital Gains Tax	67,571	84,591	27,675	16,245	196,082
Capital Acquisitions Tax	23,180	5,796	13,470	15,037	57,483
Stamps	143,626	134,351	124,664	118,965	521,606
Income Tax	2,197,999	1,779,739	1,665,252	1,876,840	7,519,830
Corporation Tax	115,914	466,603	287,454	32,597	902,568
Valued Added Tax	2,701,541	355,337	1,080,257	86,448	4,223,583
Unallocated Tax Receipts	29,989	18,066	-5,039	-449	42,567
Motor Vehicle Duties	91,235	79,460	82,820	76,118	329,633
Total	5,906,823	3,321,609	3,704,489	2,552,210	15,485,131

Table 2: profile of monthly tax receipts to end-2020, € millions

	May	June	July	August	September	October	November	December
Customs	19	20	25	28	28	30	30	25
Excise Duty	290	295	379	373	383	588	529	666
Capital Gains Tax	11	9	16	12	20	28	65	508
Capital Acquisitions Tax	14	15	18	21	26	67	183	13
Stamps	34	26	72	62	53	203	113	120
Income Tax	1,052	1,007	1,043	1,166	1,140	1,291	2,605	1,420
Corporation Tax	1,619	1,460	323	286	517	1,128	2,882	1,068
Valued Added Tax	980	86	1,584	138	2,064	266	2,625	317
Motor Vehicle Duties	69	60	81	73	70	86	87	69
Total	4,087	2,979	3,541	2,158	4,302	3,687	9,120	4,206

 Table 3: previous profiles of monthly tax receipts to end-2020, based on the Medium Term Fiscal Strategy, € millions

	January	February	March	April	May	June	July	August	September	October	November	December
Customs	24	37	27	22	27	28	29	35	36	35	35	30
Excise Duty	512	438	512	577	492	504	549	535	466	572	514	649
Capital Gains Tax	68	81	17	18	15	13	22	17	28	39	91	718
Capital Acquisitions Tax	23	13	18	16	19	20	24	28	34	108	228	19
Stamps	144	114	95	117	143	103	161	131	101	324	131	202
Income Tax	2,213	1,900	1,590	2,120	1,870	1,880	1,980	1,815	1,745	1,910	3,790	1,922
Corporation Tax	116	152	249	146	1,973	2,525	67	254	728	1,331	2,980	1,264
Valued Added Tax	2,717	221	2,185	169	2,482	172	2,361	222	2,480	257	2,492	172
Motor Vehicle Duties	91	80	85	82	83	75	85	73	70	73	63	64
Total	5,907	3,036	4,777	3,267	7,103	5,322	5,278	3,110	5,688	4,649	10,323	5,039

Value Added Tax

Ceisteanna (72, 76, 99, 102)

Carol Nolan

Ceist:

72. Deputy Carol Nolan asked the Minister for Finance if he will consider the reclassification of VAT status to harmonise the VAT system on the island of Ireland specifically with respect to the coach and bus sector (details supplied); and if he will make a statement on the matter. [8727/20]

Seán Sherlock

Ceist:

76. Deputy Sean Sherlock asked the Minister for Finance if he has given consideration to the reclassification of VAT status to harmonise the VAT system on the island of Ireland for the bus and coach sector. [8791/20]

Brendan Smith

Ceist:

99. Deputy Brendan Smith asked the Minister for Finance if he will give urgent consideration to the requests of an association (details supplied) regarding the urgent need to provide support to a sector due to the severe difficulties facing the industry as a result of the Covid-19 pandemic; and if he will make a statement on the matter. [9274/20]

Holly Cairns

Ceist:

102. Deputy Holly Cairns asked the Minister for Finance his views on reclassifying the VAT status for the bus and coach sector to harmonise the VAT systems in view of the fact that operators in Northern Ireland have an advantage in their ability to claim VAT back on expenditure which the operators here are not able to do. [9389/20]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 72, 76, 99 and 102 together.

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate or exemption from VAT.  In addition, the Directive allows for historic VAT treatment to be maintained under certain conditions and Ireland has retained the application of VAT exemption to the transport of passengers and their accompanying baggage. This means that the supplier does not register for VAT, does not charge VAT on the supply of their services and has no VAT recovery entitlement on costs where such costs are used for the exempt supply of passenger transport.

Ireland may continue to apply the VAT exemption on the supply of domestic passenger transport as governed by Article 371 of the VAT Directive; however, it cannot change the conditions under which the exemption was granted. In accordance with the Directive, a reduced rate of VAT (Ireland currently has two reduced VAT rates, 9% and 13.5%) could be introduced to the supply of passenger transport in place of the exemption that currently applies; this would give the transport operator deductibility in relation to VAT on their business inputs but would involve charging passengers VAT on their fares. Under the Directive it is not possible to apply the zero rate in Ireland to these services, as their supply was never zero rated in the past.

In the UK, where these services were previously zero rated, the zero rate of VAT continues to apply to the supply of passenger transport, except for a taxi service which is standard rated, and suppliers established in the UK have an entitlement to deductibility on the costs relating to the supply of these services where the place of supply is the UK.

I would point out that there are reliefs from VAT available to passenger transport operators, whose businesses are established in this State, as follows:

- the Value Added Tax (Refund of Tax) (Touring Coaches) Order of 2012 provides for a refund of VAT on the cost of acquiring “qualifying vehicles” used for the carriage of tourists under contracts for group transport; and

- provisions within Section 59 of the VAT Consolidation Act 2010, which allow a person established in this State to claim deductibility in respect of input costs incurred in relation to the transport of passengers outside this State.

Tax Code

Ceisteanna (73)

Niall Collins

Ceist:

73. Deputy Niall Collins asked the Minister for Finance when a double taxation agreement (details supplied) will be signed; and if he will make a statement on the matter. [8744/20]

Freagraí scríofa

Minister for Finance

It is my policy to treat plans or negotiations for double taxation agreements as confidential until they are signed, at which point they are published on Revenue's website. This is the standard international practice for most jurisdictions, which respects the confidential nature of the negotiation process.

Question No. 74 answered with Question No. 46.

Question No. 75 answered with Question No. 42.