Header Item Written Answers Nos. 87-97
 Header Item Tax Code
 Header Item Departmental Expenditure
 Header Item Tax Reliefs Cost
 Header Item Tax Yield
 Header Item Bank Guarantee Scheme Bond Repayments
 Header Item Black Economy Issues
 Header Item Intellectual Property Management
 Header Item Tax Reliefs Availability
 Header Item Ministerial Correspondence
 Header Item Consultancy Contracts Issues
 Header Item Departmental Legal Costs

Wednesday, 17 October 2012

Dáil Éireann Debate
Vol. 779 No. 1
Unrevised

First Page Previous Page Page of 91 Next Page Last Page

Written Answers Nos. 87-97

Tax Code

 87. Deputy Michael Healy-Rae Information on Michael Healy-Rae Zoom on Michael Healy-Rae asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will level the playing field by instituting betting tax reform to be fair and equitable and to capture all betting and gaming streams; and if he will make a statement on the matter. [44992/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan It was announced in Budget 2011 that the necessary arrangements are being made to ensure that bets placed on the internet by domestic punters are subject to the same level of betting duty as applies to high street betting shops. This will serve to broaden the tax base and increase betting duty receipts. The Finance Act 2011 provides for the taxation of bets that remote bookmakers enter into with persons in the State. This means, for example, that a business which engages in online bookmaking and which accepts bets from people in this country will be liable for betting duty on those bets, irrespective of where that business is based. The existing betting duty (1%) will be applied to such bets. The Finance Act also provides for the taxation of Betting Exchanges under the new arrangements; however the calculation of the tax will take account of their particular business model, in other words a 15% tax on the commission charged. In addition, excise duties are being applied to the granting and renewal of remote bookmakers’ and remote betting intermediaries’ licences.

The Betting (Amendment) Bill, which was published in July, will establish the regulatory framework for these licences. The tax changes provided for in the Finance Act can only be implemented once the Betting (Amendment) Bill is enacted.

Departmental Expenditure

 88. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide in tabular form, in respect of 2011, the number of payments issued by his Department and each agency within the remit of his Department to suppliers in respect of the supply of goods and services; splitting the payments between those issued within 30 days of receipt of the invoice; between 30 and 60 days of receipt of the invoice; between 60 and 90 days of receipt of the invoice; between 90 and 120 days of receipt of the invoice; and in excess of 120 days of receipt of the invoice. [45018/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The information requested by the Deputy is contained in the following table. The Department of Finance and its agencies adhere to Government policy that payments to suppliers be made within 15 days. However, payments are conditional on the supplier holding a valid Tax Clearance Certificate. In addition, there can be delays in processing payments in situations where an invoice has been presented by a supplier in advance of all the goods/services being furnished satisfactorily.


Department or Office Number of payments issued within 30 Days Number of payments issued between 30-60 days Number of payments issued between 60-90 days Number of payments issued between 90-120 days Number of payments issued in excess of 120 days
Department of Finance 3,016 67 15 7 10
Office of the Revenue Commissioners 15,619 8 0 0 1
Comptroller and Auditor General 605 95 13 3 0

Tax Reliefs Cost

 89. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will set out in tabular form the cost to the Exchequer of reducing the excise rate on fuel per litre by one cent; two cent; three cent; four cent; five cent; six cent; seven cent; eight cent; nine cent and ten cent. [45105/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Assuming that the Deputy is referring to auto-fuels, I am informed by the Revenue Commissioners that the costs requested by the Deputy are set out in the table below:

Decrease (VAT Inclusive) Unleaded Petrol – Cost to Exchequer Auto-Diesel – Cost to Exchequer
1c -15.7m -19.4m
2c -31.7m -38.9m
3c -47.8m -58.4m
4c -63.9m -78.0m
5c -80.1m -97.6m
6c -96.3m -117.3m
7c -112.6m -137.1m
8c -128.8m -156.9m
9c -145.2m -176.7m
10c -161.5m -196.6m

Tax Yield

 90. Deputy Joanna Tuffy Information on Joanna Tuffy Zoom on Joanna Tuffy asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the estimated tax yield for a full year if the universal social charge was reformed; and if he will make a statement on the matter. [45113/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that the full year yield, estimated by reference to 2013 incomes, from extending the additional universal social charge of 3%, which is currently applicable to self-employed income in excess of €100,000, to all income earners at this level of income would be of the order of €71 million. The Universal Social Charge is an individualised charge and as such, the estimate of yield is based on individual incomes of more than €100,000.

The estimated yield is based on confining the extension of the 3% rate to the portion of income which is in excess of €100,000, that is, the increase is not applied to the portion of total income earned up to €100,000.

The figure is an estimate from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. It is, therefore, provisional and likely to be revised.

Bank Guarantee Scheme Bond Repayments

 91. Deputy Stephen S. Donnelly Information on Stephen Donnelly Zoom on Stephen Donnelly asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Leaders' questions on 3 October 2012, where the Minister for Education and Skills stated the Government was forced to repay €1 billion to the holders of unsecured bonds in Allied Irish Bank at the insistence of the EU IMF Troika, if he will provide documentation to substantiate this assertion; and if he will make a statement on the matter. [45214/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Deputy will be aware that when this Government took office it attempted to implement burden sharing with senior unguaranteed bondholders in particular institutions that were no longer core elements of the Irish financial system. Intensive discussions were held with our European partners and particularly President Trichet of the ECB in the run-up to the announcement of our stress tests on 31st March last year. At that time the President believed that such action was not in the interests of Ireland or the Euro Area. This matter was discussed again with President Trichet on a number of occasions including the Ecofin meeting in Poland in September 2011. As already indicated to the Deputy, AIB has an important mandate to supply credit and essential banking services across the nation. It is important that its business model remains intact so that it can eventually regain access to international funding markets in a meaningful way and eliminate its dependence on the Irish state.

Nevertheless, I would like to again reiterate that this Government is currently in discussions with our European colleagues in relation to securing a deal on the Irish bank debt and further detailed work will continue to ensure that the positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer.

Black Economy Issues

 92. Deputy Seán Ó Fearghaíl Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on concerns raised in correspondence (details supplied); if he will consider the plights of persons operating in the tyre industry here; and if he will make a statement on the matter. [45254/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that they are very mindful of the unfair competitive advantage to be gained by those businesses that do not fulfil their tax obligations. As is noted in the correspondence supplied by the Deputy, there is already a strong focus on cash businesses, given their potential high-risk nature. Revenue uses a wide range of methodologies to identify those who under-declare their income and/or are operating in the shadow/hidden economy, and deploys the full range of compliance interventions to tackle those risks. Activities undertaken can include covert surveillance, cold calls to businesses and venues as well as pre-arranged aspect queries on specific items. I am further advised by the Commissioners that regarding the retail and wholesale motor vehicle parts and accessories sector, 17 Audits have been carried out so far in 2012, yielding €331,165. In 2011, 37 audits were carried out in this sector, yielding €483,070. These statistics are compiled from Revenue’s records and I am informed that for the purpose of their records, the motor vehicle parts and accessories sector includes the tyre distributor industry.

Revenue holds meetings with trade and representative bodies nationally and locally through the Hidden Economy Monitoring Group where the risks posed by shadow/hidden economy activities are discussed. Furthermore, Revenue encourages anyone who has specific information regarding any business that is engaged in tax evasion, to submit the details to their local Revenue office.

The Commissioners also advise that their tax and duty compliance programmes are under constant review to ensure that they are focussed on the areas of greatest risk, including risks from the shadow/hidden economy.

Lastly, regarding VAT registration, the Deputy should be aware that a trader supplying goods is not required to register for VAT unless their annual turnover exceeds €75,000.

Intellectual Property Management

 93. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to a report in a British publication which claims that a company (details supplied) has transferred US$7 billion of costs for intellectual property from Switzerland via Luxemburg to this State and is being given tax relief in this State equivalent to US$7 billion overtime, if the Revenue Commissioners are aware of same and have approved any such scheme. [45258/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am precluded from commenting on the tax affairs of any taxpayer, as these are confidential between the taxpayer and the Revenue Commissioners. However, I wish to advise the Deputy that, under section 291A of the Taxes Consolidation Act 1997, a company can claim allowances for capital expenditure incurred on the provision of intangible assets for the purposes of its trade. These allowances apply to expenditure on a broad range of assets (e.g. patents, copyright, trademarks, know-how) that are recognised as intangible assets under generally accepted accounting practice. The allowances, in providing relief for this expenditure, are intended to encourage companies to manage and develop the intellectual assets of their business.

Allowances for an accounting period are computed by reference to the amount charged to the profit and loss account in respect of amortisation of the intangible asset relative to its cost. Companies can alternatively opt for a write-down of expenditure over 15 years at a rate of 7 per cent per annum and 2 per cent in the final year. As the expenditures concerned - and, accordingly, the allowances - can be for very substantial amounts, the set-off of the allowances against the related income is restricted. In particular, the aggregate amount of allowances and deductible interest on borrowings, if any, in respect of intangible assets may not exceed 80% of trading income (before the set-off of allowances and any such interest) related to those intangible assets. This ensures that at least 20% of the relevant income will continue to be chargeable to corporation tax in an accounting period. Any unused allowances and interest can be carried forward to subsequent accounting periods for offset against trading income related to the intangible assets (subject to the 80% restriction) .

Tax Reliefs Availability

 94. Deputy Aengus Ó Snodaigh Information on Aengus Ó Snodaigh Zoom on Aengus Ó Snodaigh asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the tax reliefs available to a person who has their jeep adopted with a swivel chair to allow access by a person with a disability with the work done by a HSB recommended person; and if where the jeep was originally purchased has any bearing on the entitlement to relief. [45262/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that Section 134(3) of the Finance Act 1992 (as amended) and Statutory Instrument No. 353 of 1994 (Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994 (as amended) provide for permanent relief from the payment of specified maximum amounts of VAT and VRT for persons registered under the scheme. In respect of a disabled driver, where a person satisfies the Revenue Commissioners that they have paid taxes on a vehicle or on the adaptation of a vehicle that is specially constructed or adapted to take account of that person’s disablement, the vehicle has been purchased by that person, has been registered in that person’s name and has an engine size of less than 2,000cc, that person is entitled to be repaid taxes subject to a limit of €9,525. I am advised by the Revenue Commissioners that a disabled driver must, due to the nature of their disability, be unable to drive a vehicle unless it is specially constructed or adapted for that purpose. A vehicle will not be regarded as meeting the adaptation requirement solely on the basis that it contains optional extras that are readily available from manufacturers or assemblers. For example, automatic transmission is not regarded as an adaptation. If a driver can drive an unadapted vehicle they do not come within the scope of the scheme.

In respect of a disabled passenger, where a person satisfies the Revenue Commissioners that they or a family member residing with them and responsible for their transportation, have paid taxes on a vehicle or on the adaptation of a vehicle that is specially constructed or adapted for use by the disabled passenger, the vehicle has been purchased by the disabled passenger or by the family member and has an engine size of less than 4,000cc, the person who has paid the taxes is entitled to be repaid taxes subject to a limit of €15,875. Additionally, in the case of a qualifying passenger, the cost of the modifications must amount to at least 10% of the tax free cost of the vehicle. I am advised by the Revenue Commissioners that the vehicle purchased must be for the use of the passenger and the vehicle must need to be specially constructed or adapted for the passenger to travel in it. If the passenger can travel in an unadapted vehicle they do not come within the scope of the scheme. A vehicle will not be regarded as having been adapted for the purposes of the scheme solely on the basis that it contains optional extras that are readily available from manufacturers or assemblers.

Regulation 8 (Disabled Drivers) and Regulation 10 (Disabled Passengers) of the S.I. outline the conditions under which VRT and VAT will be repaid and this includes a provision that the vehicle must be purchased from an “authorised person”. I am advised by the Revenue Commissioners that an authorised dealer is a person who is authorised under section 136 of the Finance Act 1992 (as amended) “to manufacture, distribute, deal in, deliver, store, repair or modify unregistered vehicles and to convert registered vehicles ”. Authorisation brings a number of responsibilities concerning the management and record keeping in relation to vehicles, responsibilities that are subject to control and scrutiny by the Commissioners. Because of the significant amount of relief from both VRT and VAT available to purchasers of vehicles under the Disabled Drivers and Passengers scheme, it is appropriate that vehicles provided under this scheme should be provided by authorised dealers to facilitate the monitoring of various elements of the scheme.

The Deputy may also wish to note that comprehensive information relating to the relief scheme is available on the Revenue website

(http://www.revenue.ie/en/tax/vrt/leaflets/drivers-passengers-with-disabilities-tax-relief-scheme.html ).

Ministerial Correspondence

 95. Deputy Arthur Spring Information on Arthur Spring Zoom on Arthur Spring asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he has been in contact with the Northern Ireland Secretary for State, Theresa Villiers, recently regarding the corporate tax rate in Northern Ireland; if there will be any change in the near future; and if he will make a statement on the matter. [45266/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Neither my department nor I have recently been in contact with Northern Ireland Secretary of State Theresa Villiers regarding their corporate tax rate, either formally or informally. The Northern Ireland Assembly is seeking a devolution of powers from HM Treasury for the imposition and collection of corporation tax. The Joint Ministerial working group examining the issues involved in devolving responsibility for the rate of corporation tax to the NI Executive has met on three occasions, most recently on 25 June 2012. I understand that the working group meets again in London on 18 October.

As the Deputy will be aware, taxation is a matter of national competence and the issues raised in the Joint Ministerial working group are first and foremost a matter for the UK Authorities.

Consultancy Contracts Issues

 96. Deputy Mary Lou McDonald Information on Mary Lou McDonald Zoom on Mary Lou McDonald asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide details in tabular form for the years 2008, 2009, 2010, 2011 and to date in 2012 the total amount of expenditure on consultancy by his Department, any body under his aegis or State agency for which he has responsibility; the names of the consultancy companies awarded contracts; the nature of the work concerned; the fees paid to each consultant; if the matter was advertised for competitive tender; and if he will make a statement on the matter. [45297/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The information requested by the Deputy could not unfortunately be collated in the time available. My Department will respond directly to the Deputy as soon as possible.

Departmental Legal Costs

 97. Deputy Mary Lou McDonald Information on Mary Lou McDonald Zoom on Mary Lou McDonald asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide details in tabular form for the years 2008, 2009, 2010, 2011 and to date in 2012 inclusive, of the arrangements entered into by him, any body under his aegis or State agency for which he has responsibility for the obtaining of advice from a senior or junior counsel and or a firm of solicitors; the subject matter for which advice was sought; the names of the barristers' and solicitors' firms concerned and the fees paid; the nature of the work concerned; if in each case the matter was advertised for competitive tender; and if he will make a statement on the matter. [45314/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The information requested by the Deputy could not unfortunately be collated in the time available. My Department will respond directly to the Deputy as soon as possible.


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