Written Answers Nos. 179-196
179. Deputy Pádraig O'Sullivan asked the Minister for Finance for an update on the Programme for Government to bring in a targeted taxation regime to specifically discourage vaping and e-cigarettes; and if he will make a statement on the matter. [6430/23]
Amharc ar fhreagraThe taxation of tobacco products is harmonised across the EU and governed by the Tobacco Products Tax Directive 2011/64/EU. As the Directive has not been updated for a number of years, e-cigarettes (which do not contain tobacco) and other novel products are currently not provided for in the Directive.
In February 2021, the EU Commission launched ‘Europe’s Beating Cancer Plan’ with a commitment to take comprehensive action on tobacco to reduce tobacco consumption to less than 5% of the population by 2040. A review of the Tobacco Products Tax Directive, including a revision of EU tax rates and the inclusion of new products is a key action in the Plan. A review of the Directive has been undertaken and the Commission are due to present a proposed revision. Among many updates, the inclusion of e-cigarettes, vapes and novel tobacco products within the scope of the Directive is anticipated. The publication of the revised proposal was expected in December 2022 but has since been delayed. Ireland welcomes a proposal for a revised Directive to ensure that the rules remain fit for purpose, safeguard the proper functioning of the internal market and, very importantly, provide for a high level of health protection.
Domestically, the Programme for Government outlined plans to discourage ‘vaping’ and e-cigarettes through targeted taxation. The Department of Finance view is that tax policy in relation to novel products such as e-cigarettes and heated tobacco products may be best addressed in a harmonised fashion within the context of the revision to the EU Tobacco Products Tax Directive.
180. Deputy David Cullinane asked the Minister for Finance the number and details of compensation or redress schemes put in place by his Department since 1998, in tabular form; the number of claims made; the total cost of the scheme; and if he will make a statement on the matter. [6461/23]
Amharc ar fhreagraTaking into account the timeline specified and the resources required by my Department to research all relevant material, it is not possible to provide the information sought in the time available. Therefore, I will make arrangements to provide the information in a follow-up response.
181. Deputy Gino Kenny asked the Minister for Finance the position regarding the help-to-buy scheme; if there is any flexibility in the Revenue Commissioners clawback for someone who sells the property within five years; if he will outline the clawback appeals process; and if he will outline the details of any successful appeal to date. [6485/23]
Amharc ar fhreagraThe Help to Buy (HTB) incentive is a scheme to assist first-time purchasers (FTP) with the deposit they need to buy or build a new house or apartment. The incentive provides a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. Section 477C Taxes Consolidation Act 1997 (TCA) outlines the definitions and conditions that apply to the HTB scheme. Section 477C(17) TCA requires that a qualifying residence must be occupied for a minimum period of five years by the FTP as his or her only or main residence. Subsection 17(b)(i) provides that the FTP must notify Revenue that he/she has ceased to occupy the property and where the occupancy condition is breached, the HTB payment, or a proportion thereof, must be repaid to Revenue within three months of the residence ceasing to be occupied.
I am advised by Revenue that for group applications, i.e., where more than one FTP is a party to a HTB claim, no claw-back will apply where at least one of the FTP’s occupy the residence for the minimum five-year period.
The rate of claw-back due will depend on the year in which the residence ceases to be occupied. Section 17(b)(ii) provides that the applicable claw-back rate will be calculated as follows:
|
Year Occupation Ceases |
Rate of claw-back of HTB payment |
|
1 |
100% |
|
2 |
80% |
|
3 |
60% |
|
4 |
40% |
|
5 |
20% |
Paragraph 15 of Revenue's Tax and Duty manual 15-01-46 (Help to Buy) outlines the relevant claw-back provisions and sets out example scenarios. The manual is available on Revenue's website at www.revenue.ie/en/property/help-to-buy-incentive/index.aspx.
S. 477C of the TCA does not provide for any exceptions to the requirement that the property is occupied by the FTP for a minimum period of five years and Revenue does not have discretion in this regard.
Where a person liable to repay a HTB payment to Revenue fails to do so, Revenue may make an assessment or an amended assessment on that person. Where a person disagrees with the assessment, he or she may appeal the assessment to the Tax Appeals Commission (TAC) within thirty days of the date of the assessment. (The TAC is an independent statutory body tasked with managing appeals in relation to the adjudication of tax disputes. The TAC website outlines how the appeal process works.)
TAC has heard two appeals relating to the HTB claw-back provisions to date. Redacted versions of the determinations can be found on the TAC website (ref 145TACD2022 and ref 109TACD2022). Both appeals found in Revenue’s favour and held that a claw-back of the HTB payment was due.
182. Deputy Richard O'Donoghue asked the Minister for Finance the reason cohabiting couples are classed as single people when it comes to their taxes, but are classed as cohabiting and get a reduced rate of social welfare payments; and if he will make a statement on the matter. [6585/23]
Amharc ar fhreagraWhere a couple is cohabiting, rather than married or in a civil partnership, they are treated as separate and unconnected individuals for the purposes of income tax. Each partner is a separate entity for tax purposes, therefore, cohabiting couples cannot file joint assessment tax returns or share their tax credits and tax bands in the same manner as married couples.
The basis for the current tax treatment of couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980), which held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income as the married couple.
The treatment of cohabiting couples for the purposes of social welfare is primarily a matter for the Minister for Social Protection. However, it is based on the principle that married couples should not be treated less favourably than cohabiting couples. This was given a constitutional underpinning following the Supreme Court decision in Hyland v Minister for Social Welfare (1989) which ruled that it was unconstitutional for the total income a married couple received in social welfare benefits to be less than the couple would have received if they were unmarried and cohabiting.
To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage. Cohabitants do not have the same legal rights and obligations as a married couple or couple in a civil partnership which is why they are not accorded similar tax treatment to couples who have a civil status that is recognised in law. Any change in the tax treatment of cohabiting couples can only be addressed in the broader context of social and legal policy development in relation to such couples.
183. Deputy Michael Ring asked the Minister for Finance the updated position regarding the review of the Disabled Drivers’ and Disabled Passengers' Scheme, and in particular, the criteria for the primary medical certificate; the stage the review is at; if the Working Group completed its report; when the report will be available; and if he will make a statement on the matter. [6648/23]
Amharc ar fhreagraMy predecessor Minister Donohoe committed to a comprehensive review of the Disabled Drivers and Passengers Scheme (DDS) as part of a broader review of mobility supports. In order to achieve this objective, Minister O’Gorman agreed in September 2021 that the DDS review should be incorporated into the work of the National Disability Inclusion Strategy (NDIS) Transport Working Group (TWG).
The NDIS TWG was tasked, under Action 104 of the NDIS, with reviewing all Government-funded transport and mobility supports for those with a disability and for making proposals for transport and mobility solutions for those with a disability.
The Working Group, under the Chairpersonship of Minister of State Anne Rabbitte, held a number of meetings across 2022. A draft final report was considered at its final meeting on 8th December. It is expected the final report will be published soon by the Department of Children, Equality, Integration, Disability and Youth who led the work of the NDIS Transport Working Group.
As part of its engagement in this process, the Department of Finance established an information-gathering Criteria Sub-group (CSG) at the start of 2022. Its membership comprised of former members of the Disabled Drivers Medical Board of Appeal (DDMBA) and Principal Medical Officers (PMOs) in the HSE. Its purpose was to capture their experiences, expertise and perspectives in relation to the practical operational and administrative challenges of the DDS, as well as to explore what alternative vehicular arrangements were available for those with mobility issues based on international experience. The CSG work led to the production of five papers and a technical annex, submitted to the Department of Children, Equality, Disability, Integration and Youth in July 2022.
The main conclusion of the CSG is that the DDS needs to be replaced with a fit for purpose, needs-based vehicular adaptation scheme in line with best international practice.
This conclusion, together with design principles and parameters for the new scheme as based on international practice, were incorporated into a response to three questions posed in September 2022 to members of the NDIS Transport Working Group, in respect of proposals for enhanced, new and/or reconfigured supports to meet the transport and mobility needs for those with a disability. I hope my Department's views with respect to introducing a new vehicular adaptation scheme, will be incorporated into the Working Group's final report.
184. Deputy Alan Kelly asked the Minister for Finance if funding will be provided this year to purchase two additional mobile X-ray scanners for the Revenue Commissioners; and if he will seek EU funding to cover some of these costs. [6682/23]
Amharc ar fhreagraI am advised by Revenue that mobile x-ray scanners, which are an integral component of Revenue’s response framework targeting fraud, illicit trade, smuggling and organised crime, are just one component of a suite of resources, detection equipment and technologies deployed by them, in addition to the application of the comprehensive legal framework in place as set out in relevant tax and customs legislation. Intelligence development, electronic risk analysis tools, deployment of x-ray scan technology and maritime cutters are deployed as part of Revenue’s overall suite of measures.
I am advised by Revenue that a tender process to purchase an additional mobile baggage scanner van will commence shortly. EU funding for 80% of the cost of this scanner is in place.
Revenue keeps its operational requirements under continuous review, having regard to ongoing risk evaluation and evolving operational needs. I remain open to consider any proposals from Revenue that will support its work in combatting fraud, illicit trade and smuggling.
185. Deputy Cathal Crowe asked the Minister for Finance if her officials will assist a community group (details supplied) that is struggling to get insurance. [6785/23]
Amharc ar fhreagraThis Government recognises the fact that a number of outdoor/high-footfall activity sectors, including equestrian pursuits, are facing difficulty in terms of affordability and availability of insurance. It has therefore prioritised the implementation of the Action Plan for Insurance Reform. The latest Action Plan Implementation Report demonstrates that significant progress has been made, with 90 percent of the actions contained therein either delivered or initiated. Work remains ongoing on a whole-of Government basis to ensure the timely implementation of the remaining elements of the Action Plan. Of particular relevance are the proposed amendments to the duty of care. The policy intent is that these measures will have a significant impact on the issue of slips, trips and falls, and thus should assist the sporting and outdoor activity sector as a whole.
Officials in the Department of Finance have engaged with stakeholders in the equestrian industry to ascertain the scale and scope of the issue. I understand that a group insurance scheme for hunt clubs has been in operation for some time, which is centrally organised by a broker, and which covers a range of activities. However, this scheme does not provide cover for non-members taking part in events organised by such clubs. In this regard, it is important to note that neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis. Therefore, I am not in a position to direct insurance companies as to how they price their policies or what terms and conditions they apply in those policies.
Securing a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government. Therefore I would like to emphasise that it is my intention to work with my Government colleagues and ensure that the implementation of the Action Plan will continue to have a positive impact on the affordability and availability of insurance for all individuals, businesses and community groups across the country.
186. Deputy Eoin Ó Broin asked the Minister for Finance if he will provide an itemised breakdown of his Department's voted capital and current expenditure for 2020, 2021, 2022 and 2023 and to itemise the actual expenditure for each of these programmes for 2020, 2021 and 2022, in tabular form. [6865/23]
Amharc ar fhreagraI wish to advise the Deputy that the Appropriation Account 2020 and 2021 shows the breakdown of expenditure for each program in the relevant years. Vote 7 had the following spend across current and capital:
|
2020 |
2021 |
2022 |
|
|
Gross current expenditure |
€35.738m |
€36.049m |
€40.173m |
|
Gross capital expenditure |
€0.239m |
€0.329m |
€0.452m |
|
Total gross expenditure |
€35.977m |
€36.378m |
€40.625m |
*The 2022 figures are provisional and are subject to change as part of the annual Appropriation account audit.
The Vote has also carried €100,000 of unspent capital allocation from 2022 into 2023.
2022 Expenditure
|
Current expenditure |
|
|
i SALARIES, WAGES, PENSIONS AND ALLOWANCES |
22,887 |
|
ii TRAVEL AND SUBSISTENCE |
557 |
|
iii TRAINING AND DEVELOPMENT |
306 |
|
iv PROFESSIONAL, CONSULTANCY AND OTHER SERVICES |
12 |
|
v OPERATING EXPENSES |
3,484 |
|
vi ASSET AND EQUIPMENT EXPENSES |
343 |
|
vii PREMISES AND ACCOMMODATION EXPENSES |
555 |
|
viii COMMUNICATION AND MARKETING EXPENSES |
258 |
|
A.3 COMMITTEE AND COMMISSIONS (A) |
215 |
|
A.4 CONSULTANCY SERVICES AND OTHER SERVICES (A) |
511 |
|
A.5 FUEL GRANT |
9,760 |
|
B.3 COMMITTEE AND COMMISSIONS (B) |
25 |
|
B.4 CONSULTANCY SERVICES AND OTHER SERVICES (B) |
769 |
|
B.5 OFFICE OF THE FINANCIAL SERVICES OMBUDSMAN |
491 |
|
Capital expenditure |
|
|
vi ASSET AND EQUIPMENT EXPENSES |
428 |
|
vii PREMISES AND ACCOMMODATION EXPENSES |
24 |
187. Deputy Mairéad Farrell asked the Minister for Finance if it is a requirement for aircraft to also be registered for tax purposes in Ireland, given that, according to the Irish Aviation Authority, "an aircraft may be registered in the State subject to the condition that it be managed and operated from a place within the State and based therein or that it be managed and operated by an air transport undertaking holding an Air Operator Certificate issued by the Authority"; and if he will make a statement on the matter. [6912/23]
Amharc ar fhreagraI am advised by Revenue that there is no requirement for specific aircraft to be registered in Ireland for tax purposes.
Where persons within the scope of Irish tax are engaged in activities relating to aircraft, such as the leasing of aircraft, they are required to register and account for any taxes due in relation to that activity. This might include, for example, corporation tax in relation to income and profits earned in respect of that activity or payroll taxes in connection with the employment of staff.
In scenarios where an aircraft is physically imported into Ireland, a customs declaration will need to be lodged with the Automated Import System (AIS). Any customs duties/import VAT that may apply on physical importation would be charged then. In scenarios where the aircraft is registered with an aviation association in the EU or a third country, a 0% Customs Duty charge applies.
188. Deputy Pearse Doherty asked the Minister for Finance the excise rate, and its components, applied to natural gas for household use, in terms of both euros per gigajoule and per MWH at GCV, in the years 2016 to 2022 inclusive; and the scheduled rates for 2023 to 2025 inclusive. [6992/23]
Amharc ar fhreagra189. Deputy Pearse Doherty asked the Minister for Finance the minimum excise rate that may be applied to natural gas for household use, in terms of both euros per gigajoule and per MWH at GCV, under the Energy Tax Directive. [6993/23]
Amharc ar fhreagraI propose to take Questions Nos. 188 and 189 together.
Ireland's taxation of fuel is subject to European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. The ETD allows for differentiated rates of tax to be applied to natural gas used for motor purposes and for heating in both business and non-business settings. The ETD minimum rate that must be applied to natural gas for business use heating is €0.15 per gigajoule (GJ) at gross calorific value (GCV) which equates to €0.54 per MegaWatt hour (MWh). Natural gas used for non-business heating purposes must be taxed at a minimum rate of €0.30/GJ or €1.08/MWh. Notwithstanding the ETD minimum rate for non-business use, Member States may partially or fully exempt natural gas used in households.
Natural Gas Carbon Tax (NGCT) was introduced in Ireland on 1 May 2010 and applies to all natural gas supplied to consumers. NGCT is a “pure” carbon tax so there is no non-carbon component to it and the rate is directly proportionate to the amount of CO2 emitted when natural gas is combusted. Finance Act 2020 introduced a 10-year trajectory for carbon tax increases to reach levels based on charging €100 per tonne of CO2 by 2030. Current and previous rates of NGCT are published on the Revenue website at www.revenue.ie/en/tax-professionals/tdm/excise/excise-duty-rates/energy-excise-duty-rates.pdf. Irish natural gas consumers are billed based on supplies measured in MWh at GCV and NGCT rates are expressed to align with this.
The same NGCT rate currently applies to natural gas used for business and non-business heating purposes and there is no exemption for natural gas supplied to households. The table below sets out current and historic NGCT rates in both GJ and MWh units of measurement. It also includes the amount charged per tonne of CO2 which is the basis of the NGCT rates. Finally, the table also includes future NGCT rates as already legislated for in section 67(1) of Finance Act 2010 (as amended).
|
NGCT rate effective from |
Carbon charge per tonne of CO2 emitted |
NGCT rate per MWh at GCV |
NGCT rate per GJ at GCV |
|
01/05/2010 to 30/04/2012 |
€15.00 |
€2.77 |
€0.77 |
|
01/05/2012 to 30/04/2020 |
€20.00 |
€3.70 |
€1.03 |
|
01/05/2020 to 30/04/2021 |
€26.00 |
€4.71 |
€1.31 |
|
01/05/2021 to 30/04/2022 |
€33.50 |
€6.06 |
€1.68 |
|
01/05/2022 to 30/04/2023 |
€41.00 |
€7.41 |
€2.06 |
|
01/05/2023 to 30/04/2024 |
€48.50 |
€8.77 |
€2.44 |
|
01/05/2024 to 30/04/2025 |
€56.00 |
€10.13 |
€2.81 |
|
01/05/2025 to 30/04/2026 |
€63.50 |
€11.48 |
€3.19 |
190. Deputy Violet-Anne Wynne asked the Minister for Finance the status of a review into the primary medical certificate; and if he will make a statement on the matter. [6999/23]
Amharc ar fhreagraMy predecessor Minister Donohoe committed to a comprehensive review of the Disabled Drivers and Passengers Scheme (DDS) as part of a broader review of mobility supports. In order to achieve this objective, Minister O’Gorman agreed in September 2021 that the DDS review should be incorporated into the work of the National Disability Inclusion Strategy (NDIS) Transport Working Group (TWG).
The NDIS TWG was tasked, under Action 104 of the NDIS, with reviewing all Government-funded transport and mobility supports for those with a disability and for making proposals for transport and mobility solutions for those with a disability.
The Working Group, under the Chairpersonship of Minister of State Anne Rabbitte, held a number of meetings across 2022. A draft final report was considered at its final meeting on 8th December. It is expected the final report will be published soon by the Department of Children, Equality, Integration, Disability and Youth who led the work of the NDIS Transport Working Group..
As part of its engagement in this process, the Department of Finance established an information-gathering Criteria Sub-group (CSG) at the start of 2022. Its membership comprised of former members of the Disabled Drivers Medical Board of Appeal (DDMBA) and Principal Medical Officers (PMOs) in the HSE. Its purpose was to capture their experiences, expertise and perspectives in relation to the practical operational and administrative challenges of the DDS, as well as to explore what alternative vehicular arrangements were available for those with mobility issues based on international experience. The CSG work led to the production of five papers and a technical annex, submitted to the Department of Children, Equality, Disability, Integration and Youth in July 2022.
The main conclusion of the CSG is that the DDS needs to be replaced with a fit for purpose, needs-based vehicular adaptation scheme in line with best international practice.
This conclusion, together with design principles and parameters for the new scheme as based on international practice, were incorporated into a response to three questions posed in September 2022 to members of the NDIS Transport Working Group, in respect of proposals for enhanced, new and/or reconfigured supports to meet the transport and mobility needs for those with a disability.
I hope my Department's views with respect to introducing a new vehicular adaptation scheme, will be incorporated into the Working Group's final report.
191. Deputy Pearse Doherty asked the Minister for Finance if any measures are in place to require payment service providers to reimburse victims of authorised push payment fraud or scams; if any code is in place regarding reimbursement or compensation by payment service providers to victims of authorised push payment fraud or scams; if the Central Bank of Ireland has regulatory powers under legislation to require payment service providers to reimburse or compensate victims of authorised push payment fraud or scams; and if he will make a statement on the matter. [7020/23]
Amharc ar fhreagraThe revised Payment Services Directive (2015/2366/EU or PSD2) was transposed into Irish law, with effect from 13 January 2018, by the European Union (Payment Services) Regulation 2018 (S.I. No.6 of 2018, hereafter referred to as the PSRs). The PSRs set out the industry requirements concerning liabilities for unauthorised payment transactions and the applicable security requirements to help protect consumers against payment fraud.
As set out in Part 1 of the PSRs, all payment service providers (PSPs) are required to adhere to the requirements set out in the EBA’s Regulatory Technical Standards for strong customer authentication and common and secure open standards of communication (RTS on SCA & CSC). PSPs must apply strong customer authentication (SCA) when a payer: (i) accesses payment accounts online, (ii) initiates an electronic payment, or (iii) carries out any action through a remote channel.
SCA is defined in PSD2 as “an authentication based on the use of two or more elements categorised as knowledge (something only the user knows), possession (something only the user possesses) and inherence (something the user is) that are independent, in that the breach of one does not compromise the reliability of the others, and is designed in such a way as to protect the confidentiality of the authentication data”. The overall purpose of SCA is to make payments safer and more secure.
SCA has mitigated the threat of social engineering fraud to some extent, through the use of the transaction monitoring mechanisms set out in Article 2 of the RTS on SCA&CSC. This allows PSPs to better identify unauthorised and fraudulent transactions due to unusual patterns, however, the risks of authorised push payment fraud are not fully mitigated by SCA.
During the recent PSD2 review, the European Commission issued a call for advice to the EBA and the matter of authorised push payment fraud/social engineering was addressed. The EBA in their response outlined that they have “identified the increased risk of social engineering fraud as an area where further improvements in the legal framework are needed to address the increase of fraudulent transactions, in particular authorised push payment fraud where fraudsters use social engineering scams (i.e. phishing) in combination with more sophisticated online attacks”.
I have been informed by the Central Bank of Ireland that it fully recognises the need to better address the issue of authorised push payment fraud in the legal framework and will continue to actively engage on this matter through the European legislative process.
192. Deputy Darren O'Rourke asked the Minister for Finance the reason commercial bus operators here cannot claim VAT back on fuel and spare parts when their counterparts in other jurisdictions can; if he plans to address this anomaly; and if he will make a statement on the matter. [7046/23]
Amharc ar fhreagraThe 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.
In relation to other jurisdictions, the UK continues to apply the zero rate of VAT to the supply of passenger transport, with the exception of a taxi service which is standard rated. 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. This was a historic standstill provision for only the UK and could not be availed of by Ireland or other Member States. In addition, as the UK is no longer part of the EU, their VAT rates are not subject to the VAT Directive.
193. Deputy Donnchadh Ó Laoghaire asked the Minister for Finance if a write-off is available to businesses struggling to repay VAT debt built up through debt warehousing during the Covid-19 pandemic. [7098/23]
Amharc ar fhreagraDuring the COVID-19 pandemic, Revenue strongly supported businesses by suspending normal debt collection activities and implementing the Debt Warehouse Scheme to provide businesses with vital liquidity support. I am advised by Revenue that over 66,000 individual customers are currently availing of the Debt Warehousing facility with €2.338 billion warehoused, of which €1.120 billion is VAT debt.
In October 2022, Revenue announced an important and significant extension to the Debt Warehousing scheme in light of the challenging economic situation that businesses continue to face. Under the scheme, most businesses with warehoused debt were due to enter into an arrangement with Revenue to commence repaying that debt by the end of 2022. This timeline has been extended to 1 May 2024. This means that businesses no longer have the challenge of making arrangements to repay their warehoused debt until 1 May 2024 and this significant additional time should greatly support businesses and prevent business failure.
It is also important to note, businesses are still able to avail of the reduced 3% interest rate from 1 January 2023, as opposed to the general interest rate of 10% when they come to pay the debt.
It is a key condition of the Debt Warehousing Scheme that current liabilities are filed and paid on time. Revenue is actively engaging with businesses in the scheme to ensure they are complying with this key condition in order to retain the benefits of the scheme. However, where there is persistent non-compliance with current tax obligations, businesses will lose the benefit of the scheme and their debt warehouse status will be revoked. Where this happens, all warehoused debts become payable immediately and will no longer have the benefit of the interest free period of 0% up to 31 December 2022 and the 3% rate from 1 January 2023. If the debt remains unpaid, it will be subject to enforcement action with an interest rate of 10% applied.
Where payment difficulties arise, particularly in relation to current tax obligations, I am assured that Revenue will work proactively with businesses who engage early to resolve these payment difficulties. Revenue has a proven track record in agreeing flexible Phased Payment Arrangements to allow for the repayment of debt over a period of time.
A write-off of warehoused debt is not being considered as this would be unfair to those businesses who continued to pay their tax liabilities during the Covid-19 pandemic and did not avail of the warehousing scheme. Over 250,000 customers were eligible for the scheme with declared debt eligible to be warehoused of €31 billion. More than 92% of these eligible taxes have been paid to date with the balance of €2.338 billion warehoused at end January 2023. To date, almost 2,000 warehoused customers have voluntarily agreed payment arrangements for warehoused debt of €72m. Furthermore, in the case of VAT and PAYE (Employer) liabilities, both are fiduciary taxes collected by the employer or accountable person. Similarly, TWSS and EWSS are payments which employers received on behalf of their employees.
Revenue’s expectation is that the extended timeline to 1 May 2024 for entering into arrangements for repaying warehoused debt, together with flexible payment arrangements, will assist most businesses to work through any difficulties and will satisfactorily address the repayment of their tax debt, including any warehoused debt, over an acceptable period of time.
194. Deputy Sean Sherlock asked the Minister for Finance if he will provide an update under Housing for All to collection of data on vacancy levels with a view to introducing a new vacant property tax to ensure empty properties are used. [7131/23]
Amharc ar fhreagraAddressing vacancy and dereliction, and maximising the use of existing housing stock, is a priority objective of the Government. Housing for All outlines a suite of measures aimed at addressing vacancy in a coordinated, robust manner, and specifically includes an action for the Department of Finance to collect data on vacancy with a view to introducing a vacant property tax.
Provisions included in the Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information on vacant properties in the Local Property Tax return forms submitted by residential property owners in respect of the new LPT valuation period 2022-2025. This information included whether the properties were unoccupied at 1 November 2021, the reason why and whether the properties had been vacant for 12 months or more. Vacancy data on LPT returns has not been verified by Revenue and was collected for informational purposes only. A preliminary analysis of this data was published by Revenue on 6 July 2022, and is available at: www.revenue.ie/en/corporate/information-about-revenue/statistics/local-property-tax/lpt-stats-2022/index.aspx.
The preliminary analysis published by Revenue includes a breakdown of the various reasons provided for vacancy. It indicates that the most frequent reasons for properties reported as vacant, were “Undergoing Refurbishment” (22.2%), “Other” (21.7%) and “Holiday Home” (20.4%). Other reasons for vacancy were reported as a property being for sale or between lettings, subject to a probate application or other legal proceedings, or where the owner is in long-term care. The analysis also indicated that levels of vacancy among LPT liable properties are low across all counties and lie within a range that is considered to be in line with a normal functioning housing market.
Following this work, the Minister for Finance, Paschal Donohoe T.D. announced the introduction of a new vacant homes tax (VHT) on Budget Day last year. This new measure seeks to achieve an appropriate balance between incentivising owners of vacant homes to bring their properties back into use and not penalising home-owners for normal, temporary vacancy.
A property will be considered vacant for the purposes of the tax if it is in use as a dwelling for fewer than 30 days in a 12-month chargeable period. VHT will be charged at a rate equal to three times the property’s existing base local property tax (LPT) rate. VHT must be paid in addition to a property’s LPT.
The first chargeable period for VHT commenced on 1 November 2022, and owners of vacant properties will be required to file a return in November 2023. Payment of the tax will be due on 1 January 2024. The number of properties in scope and VHT payable will depend on the self-assessed returns submitted by property owners, the number of properties declared as liable and the number of property owners entitled to claim exemption from the tax.
The primary objective of the VHT is to increase the supply of homes for rent or purchase to meet demand rather than increasing tax revenues. As this is a new measure, it is important to see how the tax operates after coming into effect, then make an assessment as to whether it is working. My Department will monitor and review the tax as to its effectiveness in bringing more properties into use.
195. Deputy Michael Collins asked the Minister for Finance if he will provide an update in relation to the claim by a person (details supplied) for the rent tax credit; and if he will make a statement on the matter. [7139/23]
Amharc ar fhreagraThe rent tax credit was introduced under Finance Act 2022 and is, subject to a number of conditions, broadly available in the following three circumstances:
1. where the claimant makes a qualifying payment in respect of a residential property which he or she uses as his or her principal private residence;
2. where the claimant makes a qualifying payment in respect of a residential property which he or she uses to facilitate his or her attendance at or participation in his or her employment, office holding, trade, profession or an approved course; and
3. where the claimant makes a qualifying payment in respect of a residential property which his or her child uses to facilitate his or her child’s attendance at or participation in an approved course.
One of the conditions attached to the credit relates to the relationship between the claimant, tenant and landlord.
Where the relationship between the claimant and the landlord is that of parent and child, or vice versa, the rent tax credit will not be available in any instance. This will be the case irrespective of the nature of the tenancy concerned and its Residential Tenancy Board registration status.
The rationale behind the prohibition on tenancies of this nature is that if such arrangements were allowed to qualify for the relief, it would leave the tax credit open to possible manipulation where parents and their children could collude to create a tax advantage for either party, which was not warranted. While there is no suggestion of collusion or manipulation in this case, it is not possible to legislate for a relief of this type which caters for every specific situation.
Further details in respect of the rent tax credit, including comprehensive guidance on the eligibility criteria, can be found in Tax and Duty Manual Part 15-01-11A at the link below:
www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11A.pdf
The operation of the Rent Tax Credit will be closely monitored by my Department in conjunction with Revenue in the coming months and the question of whether any further adjustments are needed will be considered in the context of the Budget and Finance Bill process later this year.
196. Deputy James O'Connor asked the Minister for Finance his response to concerns over benefit-in-kind change (details supplied). [7207/23]
Amharc ar fhreagraRecent Government policy has focused on strengthening the environmental rationale behind company car taxation. Until the changes 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, a CO2-based BIK regime for company cars was legislated for from 1 January 2023. From the beginning of this year, the amount taxable as BIK is determined by the car’s original market value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands determines whether a standard, discounted, or surcharged rate is taxable.
In certain instances, this new regime will provide for higher BIK rates, for example in relation to above average emissions and high mileage cars. It should be noted, however, that the rates remain largely the same in the lower to mid mileage ranges for the average lower emission car. Additionally, EVs benefit from a preferential rate of BIK, ranging from 9 – 22.5% depending on mileage. Fossil-fuel vehicles are subject to higher BIK rates, up to 37.5%. This new structure with CO2-based discounts and surcharges is designed to 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. 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 that are 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 number 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 brings 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 means that the quantum of the relief is phased down from €50,000 in 2022, to €35,000 in 2023, €20,000 in 2024, and €10,000 in 2025. This 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 €5,000, 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 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 recent implementation.
