Written Answers Nos. 253-272
253. Deputy Pádraig O'Sullivan asked the Minister for Finance if the agriculture sector will be exempt from the concrete levy due to the nature of its business and the large quantities of concrete that are required for large buildings and farmyards; and if he will make a statement on the matter. [53045/22]
Amharc ar fhreagraI announced the new Defective Concrete Products Levy in my Budget 2023 speech last month. The introduction of this levy arises from a Government decision that a levy be imposed on the construction sector to contribute towards the cost of the Mica Redress Scheme, that was taken in November 2021.Following the announcement of the levy on Budget day, and in light of subsequent feedback from industry participants and others, I have determined that the rate at which the levy will apply will now be set at 5%. It will also now come into effect on 1 September 2023, to allow more time for all stakeholders to prepare for its introduction.I have also decided to remove pre-cast concrete products from the scope of the levy, so that it will now only apply to pouring concrete (aka ready-mix) and concrete blocks under two harmonised EU standards. The levy remains unchanged in all other respects, and does not exempt any particular sector, including the agricultural sector.
I acknowledge the necessity of concrete usage in that sector, however, as pre-cast products are now removed from scope the levy it will not apply to pre-cast products used in the agricultural sector, including those used for the covering of slurry stores or used around animal houses to retain slurry. Other precast products used in the agriculture sector such as floor slats for livestock are also excluded from the levy.
I was conscious when developing the levy that I had to balance the need to ensure some of the costs of the redress scheme are met from a source other than the Exchequer, while limiting the impact on inflation in the construction sector. It is essential that the entire cost of the redress scheme, which arises from the use of defective concrete blocks and other concrete products, is not borne in full by the Exchequer, and through it the Irish taxpayer.
254. Deputy Matt Carthy asked the Minister for Finance if he has considered altering the 50% limit of agricultural land which may be leased for the purposes of generating solar energy while maintaining access to capital acquisitions tax relief; if he has considered doing so specifically with a view to increasing the limit, in line with the position of the Department of Agriculture, Food and the Marine regarding the single farm payment, or specifically with a view to seeing the calculation of land reflective of the resulting reduction in agricultural production, rather than the amount of land which is leased; and if he will make a statement on the matter. [53133/22]
Amharc ar fhreagraAs the Deputy may be aware, prior to Finance Act 2017 agricultural land which was leased for solar panels was not classified as qualifying agricultural property for the purposes of Capital Gains Tax retirement relief or agricultural relief from Capital Acquisitions Tax.
Following a review announced in Budget 2018, and in recognition of the then Government's commitment to facilitate the development of solar energy projects in Ireland, a revised approach was introduced whereby it is now possible for land leased for the installation of solar panels to be classified as qualifying agricultural property under certain conditions. A key condition is that the total area of land under lease and on which solar panels are installed does not exceed 50% of the total area of agricultural land.
While introducing this amendment, it was important that we did not lose sight of the fundamental principle which underpins our policy in relation to agricultural relief and retirement relief.
I recognise that allowing land leased for solar panels to be classified as qualifying agricultural property is an important element in encouraging solar energy projects. However, this must also be carefully balanced with the overarching objectives of this valuable relief which aims to encourage the inter-generational transfer of agricultural land which is being actively farmed.
My colleague, the Minister for Agriculture, Food & the Marine, Charlie McConalogue TD informs me that support under the Basic Payment Scheme (BPS) is payable upon activation of an eligible hectare per payment entitlement. In general terms an eligible hectare is one that is used for an agricultural activity or, where the area is also used for a non-agricultural activity, is predominantly used for such activities. An area is predominantly used for agricultural activity if that activity can be exercised without being significantly hampered by the intensity, nature, duration and timing of the non-agricultural activity.
While cases involving solar panels will be examined on an individual basis, it is currently envisaged that the area covered by the solar panels will be deemed ineligible for the purposes of claiming BPS. Furthermore, in line with the Department of Agriculture, Food & the Marine’s current approach on land eligibility, where the area of a parcel covered by solar panels is 70% or greater of the overall parcel, that parcel will be wholly ineligible. If less than 70% is covered by solar panels and the agricultural activity is not hampered by the presence of the solar panels, the area not covered by solar panels may be eligible.
256. Deputy Catherine Murphy asked the Minister for Finance if he has engaged with banks and or the Central Bank in respect of the timeframes that the banks have set for borrowers to draw down mortgages once approval has been sanctioned; if his attention has been drawn to the issue for borrowers facing interest rate increases on loans that cannot be drawn down due to building works on properties not being completed in time in order to satisfy a bank to release borrowings. [53154/22]
Amharc ar fhreagraDecisions in relation to mortgage lending, including the length of time for which a mortgage offer is valid and the conditions that have to be met for the drawdown of a mortgage loan, are commercial matters for the individual lender.
These decisions are subject to compliance with the legal and regulatory framework in relation to the provision of mortgages.
Provision 4.29 the of the Consumer Protection Code provides that, where a Central Bank regulated entity offers a mortgage to a personal consumer, the regulated entity must include certain information in the offer document including:-
- the interest rate that applies to the mortgage at the date of offer;
- where there is a possibility that the interest rate set out in the offer document may not be the interest rate applicable when the mortgage is drawn down, that must be clearly highlighted (and the offer document must also outline the circumstances that would result in such a change to the interest rate);
- the length of time for which the mortgage offer is valid, assuming that all details provided by the personal consumer are valid and do not change.
More generally, the Central Bank has stated that it expects that all regulated entity’s take a consumer-focused approach in respect of any decision that affects their customers (existing and new) and communicate clearly, effectively and in a timely manner with all customers.
257. Deputy Alan Kelly asked the Minister for Finance if he had a bilateral meeting with the US Federal Reserve Board Chairperson, Mr Jerome Powell during his recent visit to Washington DC. [53188/22]
Amharc ar fhreagraI was recently in Washington DC from 11 - 14 October for the IMF/World Bank Annual Meetings. While both US Federal Reserve Board Chairperson, Mr Jerome Powell, and I attended three G7 meetings during the Annual Meetings, I did not have a bilateral meeting with him during my visit.
258. Deputy Seán Canney asked the Minister for Finance if he intends to increase the benefit-in-kind by 40% which will reduce the income for workers who need a company vehicle to carry out their duty; and if he will make a statement on the matter. [53189/22]
Amharc ar fhreagraRecent Government policy has focused on strengthening the environmental rationale behind company car taxation. Until the changes I brought in as part of the Finance Act 2019, Ireland’s vehicle benefit-in-kind regime was unusual in that there was no overall CO2 rationale in the regime. This is despite a CO2 based vehicle BIK regime being legislated for as far back as 2008 (but never having been commenced).
In Finance Act 2019, I legislated for a CO2-based BIK regime for company cars from 1 January 2023. From that date the amount taxable as BIK remains determined by the car’s original market value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands will determine whether a standard, discounted, or surcharged rate is taxable. The number of mileage bands is reduced from five to four. Detailed information on the taxation of employer-provided vehicles is included in Tax and Duty Manual Part 05-01-01b, which is available on the Revenue website.
EVs will benefit from a preferential rate of BIK, ranging from 9 – 22.5% depending on mileage. Fossil-fuel vehicles will be subject to higher BIK rates, up to 37.5%. This new structure with CO2-based discounts and surcharges will incentivise employers to provide employees with low-emission cars.
I am aware that there have been arguments surrounding the mileage bands in the new BIK structure as they can be perceived as incentivising higher mileage to avail of lower rates, leading to higher levels of emissions. However the rationale behind the mileage bands is that the greater the business mileage, the more the car is a benefit to the company rather than its employee (on average); and the more the car depreciates in value, the less of a benefit it is to the employee (in years 2 and 3) as the asset from which the benefit is derived is depreciating faster. Mileage bands also ensure that cars more integral to the conduct of business receive preferential tax treatment.
I believe that better value for money for the taxpayer is achieved by curtailing the amount of subsidies available and building an environmental rationale directly into the BIK regime. It was determined in this context that reforming the BIK system to include emissions bands provides for a more sustainable environmental rationale than the continuation of the current system with exemptions for electric vehicles (EVs). This will bring the taxation system around company cars into step with other CO2-based motor taxes as well as the long-established CO2-based vehicle BIK regimes in other member states.
In addition to the above and in light of government commitments on climate change, Budget 2022 extended the preferential BIK treatment for EVs to end 2025 with a tapering mechanism on the vehicle value threshold. This BIK00, low motor tax of €120 per annum, SEAI grants, discounted tolls fees, and 0% BIK on electric charging.
Finally, it should be noted that this new BIK exemption forms part of a broader series of very generous measures to support the uptake of EVs, including a reduced rate of 7% VRT, a VRT relief of up to €5,0 charging mechanism was legislated for in 2019 and was announced as part of Budget 2020. I am satisfied that this has provided a sufficient lead in time to adapt to this new system before its implementation in 2023.
259. Deputy Holly Cairns asked the Minister for Finance his views on extending the tax credits for renters to include persons renting social housing and meet the financial threshold. [53272/22]
Amharc ar fhreagraOn Budget Day, I announced a €500 Rent Tax Credit which it is proposed will be claimable in respect of rent paid in 2022 and subsequent years to end-2025The intention is that, in order for a person to be in a position to claim the credit in a year:
- the rent paid must be in respect of the person’s principal private residence;
- the person living in the rented property themselves, or their spouse/civil partner, must have paid sufficient rent and sufficient income tax to avail of the credit;
- the tenancy must be registered with the Residential Tenancies Board (RTB), but only where this is already a legal requirement.
In the context of a person who is single fully utilising the €500 tax credit, "sufficient rent" amounts to €2,500 in a year. For 2022, "sufficient income tax" amounts to €3,900 (equivalent to the aggregate 2022 value of the Personal Tax Credit, the Employee/Earned Income Tax Credit and the proposed Rent Tax Credit). For 2023, "sufficient income tax" amounts to €4,050 (equivalent to the aggregate proposed 2023 value of the Personal Tax Credit, the Employee/Earned Income Tax Credit and the Rent Tax Credit).
Parents who pay rent on behalf of their student child who is enrolled on an approved third-level course and residing in a RTB registered property will also be eligible to claim. Where the student is under 23 on 1 January of the year of their first point of entry into the course, the parent(s) will be able to claim the tax credit for the duration of that course.
As I stated in my Budget 2023 speech, the credit is specifically targeted to assist renters who do not receive other State housing supports. Renters who are in receipt of support, such as the Housing Assistance Payment or Rent Supplement or who are availing of the Rental Accommodation Scheme or cost rental arrangements, will not be eligible for the credit.
260. Deputy Paul Kehoe asked the Minister for Finance if he is considering any changes to the level of inheritance tax; and if he will make a statement on the matter. [53454/22]
Amharc ar fhreagraThere have been many increases to the CAT thresholds in recent years. The Group A threshold was raised from €225,000 to €280,000 in Budget 2016, to €310,000 in 2017, to €320,000 in Budget 2019 with a further rise to €335,000 in Budget 2020.
The Group B threshold rose from €30,150 to €32,500 in Budget 2017 and the Group C threshold rose from €15,075 to €16,250 in Budget 2017.
The deputy will appreciate that there would be a significant cost in making further substantial changes to the Group A, Group B and Group C thresholds. For example, recent Revenue estimates indicate that the cost of increasing the CAT A threshold from its current €335,000 to €400,000 would be €47 million, the estimated cost of increasing the CAT B threshold from its current €32,500 to €35,000 would be €8 million, and the estimated cost of increasing the CAT C threshold from its current €16,250 to €19,000 would be €3 million.
The options available for providing increases to CAT thresholds need to be considered in the context of available resources and must be balanced against competing demands. I have no plans to make changes to the rate of Capital Acquisitions Tax or inheritance tax thresholds at this time.
261. Deputy Aengus Ó Snodaigh asked the Minister for Finance the process by which a percentage of the section 481 tax relief for film production can be obtained up front in advance of production; and the way that this is calculated by headings (details supplied) in tabular form. [53459/22]
Amharc ar fhreagraThe Deputy will be aware that prior to 2015, film relief took the form of an income tax relief which provided an incentive to individual taxpayers to invest in Irish film production. The income tax scheme allowed investors in a qualifying Irish film to claim an income tax relief on their investment, once the film had been certified by Revenue and filming had commenced. In general, this was claimed by individuals against the higher income tax rate (which was either at 40% or 41% during the time this scheme operated).
From January 2015 the scheme was amended to provide relief to production companies as a credit against corporation tax. From 2015 to March 2019 the producer company applied to Revenue with a comprehensive set of information supporting the filming, post-production and financial plan for the film for certification under section 481. Revenue extracted the cultural and employment aspects of the application and forwarded same to the then Department of Culture, Heritage and the Gaeltacht for consideration. Once an authorisation was received from the Department, Revenue would scrutinise in detail the budgets and other financial aspects of the proposed claim to confirm the expected value of film tax credit and issue a certificate to this effect. The credit could be claimed by the company in one of two ways. Firstly, in two installments with an upfront claim of 90% of the expected credit based on budgeted expenditure during the production of the film, followed by a balancing payment on completion of the film based on actual spend. Alternatively, once certified, the production company could wait and claim the credit in one payment after completion of the film on submission of the compliance report.
As part of this 2015-2019 claiming mechanism, Revenue examined applications based on budgeted expenditure to certify the value of the initial 90% that could be claimed up-front. Upon completion of the film and receipt of the compliance report, Revenue conducted another full examination of the actual expenditure incurred before certifying the balancing 10% of the claim. This process meant that Revenue adjusted the value of the claim where it was incorrect. In this manner Revenue verified that the amount claimed was correct. Therefore there was no incorrect amount claimed to which interest and penalties could apply.
The relief was amended through Finance Act 2018. Applications for section 481 relief are now sent directly to the Department of Tourism, Culture, Arts, Gaeltacht, Sports and Media (DTCAGSM), who are responsible for certifying that the film is a qualifying film for the purpose of the credit. An application for certification must be made in writing to the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media at least 21 working days prior to the commencement of the Irish production. If DTCAGSM are satisfied that the application meets the cultural and industry development requirements set out in the Regulations, the film will be issued with a certificate to be treated as a qualifying film.
Should a production be certified by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, a producer company may claim the film corporation tax credit on a self-assessment basis through its corporation tax return (Form CT1), provided it has met all the other procedural and financial requirements of the relief. The producer company is required to have extensive documentation available to support the value of the claim. This documentation is set out in Schedules 2-5 of the Film Regulations 2019.
There are two options available to claimants when claiming the credit. A claimant may claim 100% of the credit based on actual expenditure. This claim must be made within 6 months of completion of the production. Alternatively a claim can be made during the course of the production. In this scenario the claim is made in two instalments. The first part of the claim may be made for 90% of the credit based on budgeted expenditure. The balance of the claim is calculated based on actual expenditure, and must be claimed within 6 months of completion. As the relief is now claimed on a self-assessment basis, any claim may be subject to review in future in accordance with Revenue’s Code of Practice for Revenue Audit and Other Compliance Interventions.
With regard to the Deputy’s request for detailed project-level data, I am advised by the Revenue Commissioners that the tax affairs of individual taxpayers cannot be disclosed due to the obligation to protect taxpayer confidentiality as provided for by section 851A of the Taxes Consolidation Act, 1997. Section 851A(8A) only permits Revenue to disclose specific taxpayer information in relation to recipients of section 481 film tax credit in line with requirements under the European Cinema Communication C332/01. As a result, the Revenue Commissioners cannot provide the detailed data requested by the Deputy. Details of beneficiaries of section 481 are published, and updated on a quarterly basis at: www.revenue.ie/en/companies-and-charities/reliefs-and-exemptions/film-relief/beneficiaries-film-relief.aspx.
My Department also published a Cost-Benefit Analysis of the film tax credit in advance of Budget 2023, which is available online at: www.assets.gov.ie/236353/40880d90-4a34-41e0-8692-076da43f813b.pdf. This report provides information at aggregate level on employments in productions supported by the section 481 tax credit.
262. Deputy Aengus Ó Snodaigh asked the Minister for Finance the work that has been undertaken to ensure that section 481 tax relief complies with both the culture test and industry development test required under European Union state aid rules; and the engagement between his Department and the European Commission on this matter since 2012. [53460/22]
Amharc ar fhreagraIn order to qualify for Section 481 relief, an application for certification must be made in writing to the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media at least 21 working days prior to the commencement of the Irish production. In considering whether to issue a certificate in relation to a film, the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media will consider whether the film will either or both:
i. act as an effective stimulus to film making in the State through among other things, the provision of quality employment and training and skills development opportunities (referred to as ‘the Industry Development test’); and
ii. be of importance to the promotion, development and enhancement of the national culture including, where applicable, the Irish language (referred to as ‘the Culture test’).
With every Section 481 application, a producer company must demonstrate how, in promoting, developing and enhancing culture, the project will act as an effective stimulus to film making in the State through, among other things, the provision of quality employment and training opportunities. Detailed information is required concerning the film’s production schedule, production budget, key personnel and employment information.
All applications must also include a Skills Development Plan. For all projects with eligible expenditure in excess of €2 million, a copy of the Skills Development Plan are submitted to Screen Ireland for approval.
DTCAGSM conduct an in-depth examination of the information supplied as part of the Section 481 application. As part of the certification process DTCAGSM officials review how the production has identified the skills needs that will be addressed through the skills development plan. DTCAGSM also check what type of skills activity, training courses and mentoring / shadowing activity will be completed as part of the skills development plan. DTCAGSM examine the curriculum vitaes of the Heads of Departments (e.g. Producer, Director, Writers) to ensure there is a strong track record of experience and expertise in the industry which can be passed on to the less experienced individuals on the production.
Applicants must also complete an undertaking in respect of quality employment. This undertaking commits applicants to compliance with all relevant employment legislation and to have in place written policies and procedures in relation to grievances, discipline and dignity at work (including harassment, bullying and equal opportunity). These conditions shall be met by both the producer company and the qualifying company. If an applicant does not comply with the employment and skills development requirements set out by the Minister, they may not be eligible for the corporation tax credit. Any amount already claimed may be recoverable, with interest.
To ensure aid is provided to projects which promote European culture, the scheme must have an effective verification mechanism in place. The mechanism applicable to Section 481 is the Culture Test. As part of the application to DTCAGSM, applicants must demonstrate how the project will be of importance to the promotion, development and enhancement of the national culture.
If the application is successful, the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media will issue a certificate to the applicant.
Both the Department of Finance and the DTCAGSM have engaged with the European Commission in recent years in relation to Section 481.
Prior to 2015, the scheme operated by giving tax relief to individuals investing in the film industry. From 2015 the scheme provides direct support to film producer companies in the form of a tax credit. DTCAGSM engaged with the European Commission to seek approval for this amended relief structure. In October 2014 the Commission published its decision to approve the aid and the new relief came into operation from January 2015.
In 2017, Section 481 was reviewed by the Directorate-General for Competition of the European Commission as part their ex-post monitoring of aid measures implemented by Member States. This review examined whether the scheme respected the provisions of the applicable aid rules and the Commission’s decision to authorise the aid. The review also included a sample of individual aid awards granted under the scheme. Following this monitoring, DG Competition considered that the scheme and the individual aid granted on the basis of the scheme was in line with their prior decisions with regard to its operation.
Finance Act 2018 amended the certification process for the relief, introduced a short-term, tapered regional uplift for productions made in areas designated under the State aid regional guidelines, and extended the availability of the relief to 31 December 2024. The extension of the relief and the introduction of the regional uplift was subject to European Commission state aid approval, which was received in June 2019.
263. Deputy Cathal Crowe asked the Minister for Finance if he will consider requesting the Revenue Commissioners to streamline and simplify the online filing of form 11s to include a method to automatically calculate the preliminary tax due to the person, along with an option to either accept this or enter a different amount if they wish (details supplied); and if he will make a statement on the matter. [53510/22]
Amharc ar fhreagraI am advised by Revenue that on average 96% of self-assessed taxpayers complete the Form 11 return online to meet their annual filing and payment obligations each year which is reflective of the continuous efforts undertaken by Revenue to make the process as streamlined and simplified as possible. While a high percentage of Forms 11 are filed annually by tax agents, there is a significant number of taxpayers who use the online Form 11 to complete their own return without recourse to a tax agent. For the 2020 tax year, nearly 80,000 taxpayers self-filed their Form 11 return online.
One of the main advantages of completing the Form 11 return online is that a significant amount of the form is pre-populated by Revenue with information from a range of sources. For example, pensions from which PAYE has been deducted or additional income from the Departments of Social Protection or Department of Agriculture, Food and Marine.
Furthermore, if a taxpayer has filed a return for the previous tax year, that information is also included. The pre-population of information in the online return is provided to assist taxpayers in easily identifying the relevant parts of the form for completion based on the previous year, particularly if their circumstances and sources of income remain unchanged.
While the online Form 11 provides an indicative calculation of the tax, USC and PRSI due based on the information entered by the taxpayer which can be used to complete the ‘Self-Assessment’ panel of the Form 11 to meet his or her legal requirement to self-assess, it cannot calculate figures for preliminary tax as a taxpayer’s circumstances can change from year to year.
Revenue provides significant support to taxpayers when completing their Form 11 each year including a range of guidance material on the Revenue website, an annual Guide to Completing the Form 11 , and a specific Tax and Duty Manual highlighting any changes each year, in addition to guidance within the online form itself. Revenue also frequently asks self-assessed taxpayers to review their circumstances and consider if they should continue to be self-assessed. This is particularly relevant for those taxpayers who were self-employed and trading but are in receipt of pension income only since the previous tax year. It is possible that those taxpayers no longer need to file a Form 11 and could instead file the shorter income tax return for PAYE (or pension only) taxpayers.
264. Deputy Eoin Ó Broin asked the Minister for Finance the amount of tax revenue foregone through tax reliefs related to airplane leasing by income tax, corporation tax, capital gains tax, value added tax, gift and inheritance tax, stamp duty and other relevant tax relief in each of the years 2010 to 2019 and to date in 2022, in tabular form; and if he will make a statement on the matter. [53572/22]
Amharc ar fhreagra265. Deputy Eoin Ó Broin asked the Minister for Finance if the analysis and reasoning behind the tax reliefs in the aviation leasing sector will be provided; and if he will make a statement on the matter. [53573/22]
Amharc ar fhreagraI propose to take Questions Nos. 264 and 265 together.
Within the tax code there are various generally available tax reliefs that may be claimed by aircraft leasing companies but are not specifically for use by these companies. Statistics in relation to tax costs for various reliefs are available on the Revenue website at: www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
There are also some provisions in the Energy Tax and VAT Directives that are of relevance to the aviation sector.
I am advised by Revenue that the following provisions are of particular relevance to the aviation leasing sector:
1. Special Assignee Relief Programme (“SARP”):
SARP seeks to facilitate further investment by multinationals, including international lessors, in Irish operations by reducing the costs to these businesses of attracting key employees from overseas to work in either the Irish-based operations of their employer or an associated company.
Relief is given by way of disregarding 30 per cent of an assignee’s employment income between €75,000 and €1 million for Income Tax purposes for up to 5 years. The relief also allows for certain schooling and travel expenses to be exempted from the charge to tax in that period where certain conditions apply. SARP does not affect an individual’s USC or PRSI obligations.
Individuals in receipt of SARP will often remain part of the social security system of their home country while on assignment. As such, PRSI may not apply to such individuals.
The overall cost and number of claimants of this relief is available in the annual SARP reports available on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/research/statistical-reports/special-assignee-relief-programme.aspx. Table 8 of the 2020 SARP report provides a breakdown of claimants by employer sector, with the aircraft leasing sector included within the heading ‘Administrative and support service activities’, however additional claimants may be captured under the heading ‘Financial and Insurance Activities’ where the leasing company is a qualifying company for the purposes of Section 110 of the Taxes Consolidation Act 1997. This heading may also capture other companies involved in management or other activities related to aircraft leasing. I am advised by Revenue that a further breakdown of claimants specifically employed in the aircraft leasing sector only is not available.
2. Capital Allowances
Companies which hold equipment, plant & machinery assets, including lessors, are generally entitled to claim capital allowances in lieu of accounting depreciation. Capital allowances are typically given over an 8-year life irrespective of the life of the asset in respect of which they are granted.
Aircraft are high value items that can have a life of 20 or more years. As such, in the first 8 years of ownership of an asset aircraft leasing companies are often in a position where the available capital allowances are in excess of the income earning profile of the asset, resulting in losses in the first 8 years of leasing trades. Such allowances may be subject to clawback provisions when the capital asset is sold or otherwise disposed of and, to mitigate the impact on the Exchequer, excess leasing capital allowances are ring-fenced such that they can only be used against the lease rental income of the company or group.
While a breakdown by sector of these tax costs is not separately available, Revenue’s annual Corporation Tax research paper details claims in respect of losses and capital allowances by sector as reported in annual Corporation Tax returns. This is available on pages 14 and 16 of the paper, which is available on the Revenue website at: www.revenue.ie/en/corporate/documents/research/ct-analysis-2022.pdf.
The aircraft leasing sector is included within the heading ‘Administrative and support service activities’ and is responsible for the majority of the claims shown on these pages for this sector. Additional claimants may be captured under the heading ‘Financial and Insurance Activities’ where the leasing company is a qualifying company for the purposes of Section 110 TCA 1997. This heading may also capture other companies involved in management or other activities adjacent to aircraft leasing.
3. Stamp Duty
Relief is available from stamp duty under section 113 of the Stamp Duties Consolidation Act (SDCA) 1999 on instruments for:
- the sale or transfer of any ship, vessel or aircraft or
- any part, interest, share or property of or in any ship, vessel or aircraft.
This relief was introduced in 2013 to provide clarity for investors, although stamp duty was generally not chargeable on such transactions.
4. 4.Interest limitation
Interest limitation rules were introduced in Finance Act 2021 and seek to limit base erosion through the use of interest expenses that create excessive interest deductions which are disproportionate to the level of interest income earned by the company.
Provision is made in these rules to recognise the role leasing companies have in effectively providing financing for airlines who may otherwise be unable to acquire aircraft. As such, lease income amounts that are deemed to be interest income for accounting purposes are treated as interest income for the purposes of the interest limitation rules.
As interest limitation rules only commenced from 1 January this year, no data is currently available on the impact of this provision.
5. Excise duty treatment of aviation fuel
Ireland’s excise duty treatment of fuel used for air navigation is governed by European Union law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive (ETD).
Jet fuel, or heavy oil, used for commercial air navigation (including leased aircraft) is fully exempt from Motor Oil Tax (MOT). No such exemption applies to jet fuel used for private pleasure flying (non-commercial air navigation) and an MOT rate of €425.45 per 1,000 litres applies.
Aviation gasoline (light oil) used for commercial air navigation is partially exempt from MOT and an effective rate of €251.07 applies. The full MOT rate of €483.34 applies to aviation gasoline used for private pleasure flying.
I am informed by the Revenue Commissioners that data in respect of this measure, with regard to companies in the aviation leasing sector, is not readily available.
6. Although not a relief, it is noted for completeness that Article 148 of the VAT Directive states that Member States shall exempt the supply of goods for the fuelling and provisioning of aircraft used by airlines operating for reward chiefly on international routes as well as the supply, modification, repair, maintenance, chartering and hiring of those aircraft. VAT in the EU is governed by the VAT Directive with which Irish legislation must comply.
266. Deputy Sean Sherlock asked the Minister for Public Expenditure and Reform the projects that have been removed from the priority list under the national development plan. [52691/22]
Amharc ar fhreagraThe National Development Plan 2021-30 (NDP) published last year provides a detailed and positive vision for Ireland until the end of the decade, and sees total public investment of €165 billion over that period. It is important to note that the NDP is fundamentally a high-level financial and budgetary plan, which sets out the framework and broad direction for investment priorities. It includes Exchequer allocations for Departments for the period 2021-2025 to support the delivery of the ten National Strategic Outcomes identified in the National Planning Framework (NPF). In Budget 2023 last month, I announced an additional €800 million which will be made available under the NDP for core capital spending to help in delivering the largest, greenest and most ambitious infrastructure plan in the history of the State. With capital underspends from this year, the amount available next year will be well over €12 billion. This represents a very substantial commitment of resources. The Government remains determined to effectively delivering the NDP projects and ensure that they are timely and crucially, that they provide value for money.
The NDP is not a comprehensive list of all the public investment projects that will take place over its lifetime. However, where sufficient planning and evaluation has already taken place the NDP contains expenditure commitments for a range of strategic investment priorities which have been determined by the relevant Departments as central to the delivery of the NPF vision. All of these commitments require evaluation along with the development of business cases in line with the requirements of the Public Spending Code before they are formally approved for implementation.
It should be noted that my Department, in carrying out its role in terms of oversight of the NDP, does not consider the merits of individual projects or sectoral policy strategies as this is primarily a matter for individual Departments and Agencies.
Individual projects are generally selected by Departments or Agencies based on a detailed process which begins with setting their own sectoral strategy and goals, and then subsequently identifying specific needs or challenges to be addressed, whether that be through regulation, taxation, education or potentially expenditure on an investment project. Appropriate options are then assessed in line with the Public Spending Code.
267. Deputy Pádraig O'Sullivan asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 97 of 4 October 2022, if he will provide a further update on the selection of a contractor for the Glashaboy flood relief scheme; and if he will make a statement on the matter. [52707/22]
Amharc ar fhreagraThe Glashaboy River Flood Relief Scheme at Glanmire / Sallybrook, Cork is being progressed by Cork City Council. The Office of Public Works (OPW) in partnership with Cork City Council are engaging proactively to progress the flood relief scheme for Glanmire.
The Glashaboy Flood Relief Scheme was confirmed in January 2021 by the Minister for Public Expenditure and Reform under the Arterial Drainage Acts 1945 to 1995. The scheme is being funded from the €1.3 billion in flood relief measures under the National Development Plan to 2030, and as part of Project Ireland 2040. Provision for the total project budget for this scheme is included in the Office of Public Works multi annual capital allocation.
The Glashaboy River Flood Relief Scheme will protect 103 properties from a significant risk of flooding.
The scheme is currently at Stage 3, detailed design. The tender documentation for the procurement and appointment of a contractor was issued in September 2021 with a return date of 24th January 2022. Unfortunately, Cork City Council was not in a position to appoint a Contractor for the works on foot of this procurement process. However, Cork City Council is proceeding towards issuing updated Tender Documents in Q4 2022 for works to commence in Spring 2023 and is working with key project partners to minimise the overall delay in the completion of these works.
268. Deputy Pádraig O'Sullivan asked the Minister for Public Expenditure and Reform when it is expected that the Judicial Review ongoing as part of the Blackpool flood relief will conclude; and if he will make a statement on the matter. [52708/22]
Amharc ar fhreagraThe Minister for Public Expenditure and Reform confirmed the River Bride (Blackpool) Flood Relief Scheme, under the Arterial Drainage Act 1945, as amended, in March 2021, and construction was expected to commence in early 2022.
In June 2021, the community group, Save Our Bride Otters (SOBO), was granted leave to apply for a Judicial Review of the confirmation of the Minister for Public Expenditure and Reform. A stay was also granted on works being carried out pursuant to the confirmation, pending the resolution of these proceedings.
Following an extensive legal review of the grounds of the Judicial Review, and the statutory processes around the decision-making process, the Department of Public Expenditure and reform has agreed to consent to an order reverting the evaluation of the River Bride (Blackpool) Flood Relief scheme back to an advanced stage of further public consultation. In agreeing to this, DPER has conceded the matter on a single ground related to public consultation procedures on certain information as part of the confirmation process.
Following this decision, further information was requested by the Minister for Public Expenditure and Reform as part of the environmental impact assessment. The Office of Public Works provided this further information on 13 October 2022, which will now be subject to a further public consultation in relation to the scheme.
The confirmation process for the scheme is a matter for the Department of Public Expenditure and Reform. Subject to confirmation procurement for a contractor for the works will commence.
269. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform the number of persons working in his Department’s press office, communications team and social media team in tabular form. [52786/22]
Amharc ar fhreagraThere are a total of 10 people in my Department working across press, communications and social media. Below is a breakdown of these roles in tabular form.
|
Head of Press and Communications Unit |
1 |
|
Press Office (including Social Media) |
3 |
|
Communications Office |
2 |
|
Office of Government Procurement Communications Team |
4 |
270. Deputy Noel Grealish asked the Minister for Public Expenditure and Reform if he will clearly outline the maximum lump sum and pension benefits payable for civil and public service retirees in all grades from junior to senior; if there are caps on any part of applicable pensions whether a retiree is in a junior or senior grade; and if he will make a statement on the matter. [52810/22]
Amharc ar fhreagraAs the Deputy will be aware, as the Minister for Public Expenditure and Reform, I have direct responsibility for the civil service pension schemes, while I hold a policy and approval role in respect of certain public service pension schemes.
Pension benefits for civil and public servants can vary depending on individual careers in the public service.
Pre-1995 Pension Schemes
In general, for public servants who joined prior to 6 April 1995, a pension of 1/80th of final pensionable remuneration is payable for each year of reckonable service. A lump sum of 3/80ths of final pensionable remuneration is also payable. Total reckonable service for both pension and lump sum is subject to an overall maximum of 40 years, or equivalent.
A public servant in this category who secures maximum pension benefits based on 40 years’ reckonable service would receive a lump sum equal to 150% of their final pensionable remuneration, and an annual occupational pension equal to 50% of their final pensionable remuneration.
Post-1995 Pension Schemes
In general, for public servants who pay Class A PRSI (fully insured) and/or who joined from 6 April 1995 up to 31 December 2012, the lump sum is calculated similar to a Pre-1995 lump sum and the relevant annual occupational pension benefit is ‘integrated’ i.e. account is taken of the individual’s entitlement to the State Pension (Contributory).
This provides for:
1. 1/200th of pensionable remuneration multiplied by years of reckonable service (to a maximum of 40 years or equivalent) for that part of the final pensionable remuneration which is less than or equal to 3.333333 the state pension;
2. plus, 1/80th of pensionable remuneration multiplied by years of reckonable service (to a maximum of 40 years or equivalent) for that part of the final pensionable remuneration which is in excess of 3.333333 of state pension.
A public servant in this category who secures maximum pension benefits based on 40 years’ reckonable service would receive a lump sum equal to 150% of their final pensionable remuneration, and an annual occupational pension (when combined with the State Pension (Contributory)), equivalent to 50% of their final pensionable remuneration.
Pension Benefit Cap on pre-existing Pension Schemes
The 40-year limit on the total pensionable service to be counted towards public service pension benefits also applies where the person has been a member of more than one pre-existing public service pension scheme (i.e. not the Single Pension Scheme).
The extension of the 40-year limit to membership of more than one scheme was implemented under the Public Service Pensions (Single Scheme and other Provisions) Act 2012 Act, and anyone who has accrued more than the equivalent of 40 years’ service before the passing of the Act may retain the benefit of service accrued before 28 July 2012.
Single Public Service Pension Scheme 2013
The Single Public Service Pension Scheme (‘Single Scheme’) is the default public service pension scheme for all new-entrant public servants since 1 January 2013. It is a career-average pension scheme, integrated with the State Pension (Contributory).
In general, members accrue pension and lump sum referable amounts (benefits) in each pay period. The sum of referable amounts calculated in each pay period over a member’s career will result in their lump sum and pension payments.
Lump sum referable amounts are accrued at a rate of 3.75% of gross pensionable remuneration; while pension referable amounts are accrued based on the State Pension (Contributory) threshold:
1. below 3.74 times State Pension (Contributory), pension referable amounts accrue at a rate of 0.58% of gross pensionable remuneration;
2. above this threshold, pension referable amounts accrue at 1.25% of gross pensionable remuneration.
There is no upper cap or limit on the referable amounts that a member can accrue over their Single Scheme career. The only ‘cap’ is where a member engages in multiple or simultaneous public sector employments resulting in an individual only receiving the benefit from one full time equivalent role.
271. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform the number of vacant properties that are owned by his Department; the estimated economic value of the vacant properties; and if he will provide a list of such properties. [52855/22]
Amharc ar fhreagra272. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform the number of properties that are being leased by his Department that are currently vacant; and if he will provide a list of such properties. [52873/22]
Amharc ar fhreagraI propose to take Questions Nos. 271 and 272 together.
I am advised by the Commissioners of Public Works that the Office of Public Works manages a property portfolio in excess of 2,500 properties ranging from heritage buildings, commercial office blocks, green field sites, warehouses, Coast Guard Stations and Garda Stations. As would be the norm in such a large portfolio, at any given time, there will be a number of properties being refurbished or vacant. The State will always retain a number of vacant properties for future use.
At present, there are a total of 100 properties currently surplus and vacant. This includes 68 buildings and 32 sites:
|
Former Garda Stations Closed Under the 2012 and 2013 Policing Plans |
32 |
|
Other Former Garda Stations |
7 |
|
Former Garda Residences |
5 |
|
Former Coastguard Properties |
9 |
|
Former Coastguard Sites |
1 |
|
Former Customs Properties |
2 |
|
Former Customs Sites |
5 |
|
Former Met Station Properties |
1 |
|
Former Met Station Sites |
1 |
|
Decentralisation Sites |
7 |
|
Miscellaneous Properties |
12 |
|
Miscellaneous Sites |
18 |
As a matter of policy, no property or site is disposed of until there is absolute certainty that there is no alternative State use for that property.
In a case where the OPW does not need to retain a property, and has deemed it surplus to requirements, the office follows a strict procedure. The OPW's Disposal Policy (consistent with the Department of Public Expenditure and Reform circulars on disposals of properties) with regard to vacant State property, is to:
1. Identify if the property is required/suitable for alternative State use by either Government Departments, Local Authorities or the wider public sector.
2. If there is no other State use identified for a property, the OPW will then consider disposing of it on the open market if and when conditions prevail, in order to generate revenue for the Exchequer.
3. If no State requirement is identified or if a decision is taken not to dispose of a particular property, the OPW may consider community involvement (subject to detailed written submission, which would indicate that the community/voluntary group has the means to insure, maintain and manage the property and that there are no ongoing costs for the Exchequer).
When a property is deemed surplus to the requirements of the Commissioners, the OPW notifies all relevant stakeholders as part of the disposal policy. This includes notifying the Land Development Agency and the relevant local authorities who may be interested in acquiring the property for housing purposes. While the provision of social/affordable and emergency residential accommodation is a function of the Local Authorities and the Department of Housing, Planning and Local Government, the OPW has in recent years provided:
- eight residential units in Dublin City Centre that were transferred to Dublin City Council for use by the Peter McVerry Trust.
- A building in Crumlin, Dublin that is now licensed to Dublin City Council for use as a Family Hub.
- The former Central Mental Hospital, Dundrum which will be transferring to the Land Development Agency for housing purposes.
- A further seven buildings are being transferred to Cork County Council for social housing and a site in Cork is transferring to Cork County Council for the construction of 24 social housing units.
Buildings owned or managed by the OPW are primarily commercial offices, Garda stations, warehouses or others that are not suited to residential use. However, the OPW has actively engaged with the Department of Housing, Planning and Local Government in providing information on any non-operational, vacant buildings owned. The Department then assesses those buildings in terms of what might be suitable for residential use.
In the case of the limited number of vacant Garda Stations, the OPW has notified all the relevant Local Authorities that these are vacant and available for transfer. The Commissioners have also similarly informed the Department of Housing of such availability on a number of occasions. To-date, the OPW has transferred five former station properties to Local Authorities with ten former Garda stations in the process of being transferred. In addition, the OPW is in the process of leasing three former Garda stations to Local Authorities for community use.
The OPW has also engaged with the Land Development Agency on any suitable land in our ownership, as well as the Department of Children, Equality, Disability, Integration and Youth in relation to housing persons arriving in Ireland as a result of the war in Ukraine.
Where either the local authorities or other State bodies do not want the properties in question they are prepared for sale through public auction.
Valuations are available when the properties and sites are valued either by the appointed auctioneer, (if proceeding to auction), or by the Valuation Office, (if proceeding by intra State transfer).
A list of the current vacant properties (buildings and sites), with an indication of their status and future plans, is attached at Schedule A.
The Office of Public Works does not have any leased buildings that are fully vacant at this time.
The OPW is not in a position to provide data on any leased buildings that may be held by other State bodies where those bodies have entered into an agreement directly with a landlord.
