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Tax Code

Dáil Éireann Debate, Tuesday - 6 July 2021

Tuesday, 6 July 2021

Ceisteanna (165, 166, 167)

Mairéad Farrell


165. Deputy Mairéad Farrell asked the Minister for Finance if a full and unredacted list will be provided of all reform commitments entered into by the State in the National Plan of the Recovery and Resilience Fund; and if he will make a statement on the matter. [35893/21]

Amharc ar fhreagra

Mairéad Farrell


166. Deputy Mairéad Farrell asked the Minister for Finance the tax policy changes it is committed to in the National Plan of the Recovery and Resilience Fund recently submitted; the timeframe by which these commitments will be implemented; and if he will make a statement on the matter. [35895/21]

Amharc ar fhreagra

Mairéad Farrell


167. Deputy Mairéad Farrell asked the Minister for Finance the way the State will address the country specific recommendations as obligated to do in order to access the Recovery and Resilience Fund; and if he will make a statement on the matter. [35897/21]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 165 to 167, inclusive, together.

In July 2020, the European Council adopted a €750 billion recovery package for Europe. This package, NextGenerationEU, is Europe’s shared response to the severe health and economic crisis caused by COVID-19. It is an ambitious and common recovery package that will complement and support each country’s own national response to the crisis. At the heart of the package lies the Recovery and Resilience Facility.

The aim of the Facility is to address the economic and social impact of the pandemic and make European economies and societies more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. Ireland will receive approximately €915 million in grants from the Facility relating to the years 2021 and 2022. A further set of grants is to be allocated in 2023, taking into account economic developments between now and then. All of these grants will be used to support investments between now and mid-2026.

In order to avail of grants from the Recovery and Resilience Facility, each Member State must prepare a National Recovery and Resilience Plan. On 28 May 2021, Ireland submitted its draft Plan to the European Commission. Ireland’s draft Plan takes into account the requirements of the Facility for a minimum of 37% of expenditure on climate and 20% on digital investments and reforms; the need to address investment and reform challenges identified in all or a significant subset of relevant Country Specific Recommendations (CSRs) made to Ireland by the EU in recent years; and the importance of alignment with national economic and investment plans, in particular the Economic Recovery Plan.

The overall objective of Ireland’s Plan is to contribute to a sustainable, equitable, green and digital recovery effort, in a manner that complements and supports the Government’s broader recovery efforts. Ireland has committed to addressing issues highlighted in recent Country Specific Recommendations as part of Ireland’s National Recovery and Resilience Plan.

A number of reform projects are set out in the draft National Recovery and Resilience Plan. These include progressing the Climate Action and Low Carbon Development (Amendment) Bill; implementation of Base Broadening Carbon Tax measures; Addressing the Digital Divide and Enhancing Digital Skills by developing a new 10 year Adult Literacy, Numeracy and Digital Literacy Strategy and a new Digital Strategy for schools; Reducing Regulatory Barriers to Entrepreneurship through the use of an SME Test in development of policy; Enhancing Ireland's Anti-Money Laundering Capacity; continuing to address Aggressive Tax Planning; Advancing supplementary pension provision reform; Increasing the provision of social and affordable housing through progressing the Affordable Housing Bill and the Land Development Agency Bill; and, progressing Sláintecare implementation by committing to the implementation of three initiatives which will improve access to care in the community and help the process of removing private healthcare from public hospitals.

As part of this process, and as previously signalled in the Update to Ireland’s Corporation Tax Roadmap published in January, Ireland has committed to introduce a range of reform measures to continue efforts to tackle Aggressive Tax Planning especially in relation to outbound payments. In addition, measures will also be delivered in respect of environmental taxation.

In the draft recovery and resilience plan, from a tax perspective, commitments have been made to;

- Apply enhanced Controlled Foreign Company rules to the list of non-cooperative jurisdictions, effective 1 January 2021 (Finance Act 2020);

- Publish external independent economic research on the impact of recent legislative changes, both domestically and internationally, on outbound payments from Ireland. This was published on 14 June 2021;

- Carry out a Public Consultation on the introduction of measures to ensure that Outbound Payments do not avail of double non-taxation. The public consultation and the responses received will be published on the Department of Finance website in due course;

- Introduce legislation to safeguard against the possibility of double non-taxation of outbound payments in Finance Act 2023 at the latest;

Finally, the Carbon Tax trajectory of increases provides for significant incremental tax increases that will raise significant extra revenue for the State and broaden the tax base. Within the context of the National Recovery and Resilience Plan the measure will be considered complete by 30 June 2025, however as part of Government commitments on climate action, the 2020 Finance Act legislated for incremental increases to 2030.

Ireland’s draft National Recovery and Resilience Plan is currently being assessed by the European Commission which will, within two months, make a recommendation to the Council of the European Union, on the basis of which implementation of the Plan will commence and EU financial support will start to flow.

A National Recovery and Resilience Plan Implementing Body will be established within the Department of Public Expenditure & Reform to oversee its implementation. Reporting to the Minister for Public Expenditure & Reform, this Body will act as the lead authority for Ireland and as the single point of contact with the European Commission.

Question No. 166 answered with Question No. 165.
Question No. 167 answered with Question No. 165.