Written Answers Nos. 349-350
349. Deputy Ruth Coppinger asked the Minister for Finance to consider an alternative system for local property tax for those estates that have not been taken in charge by a council, given issues that have arisen (details supplied); and if he will make a statement on the matter. [62972/25]
View answerThe Government decided upon the introduction of the Local Property Tax (LPT), that a liability to the tax should apply to all owners of residential properties with a limited number of exemptions and no deductions. Limiting the exemptions and deductions available allows the rate to be kept low for those liable persons who do not qualify for an exemption.
Local authorities put the proceeds of the LPT towards infrastructure and services in their areas, such as the maintenance and provision of public roads, footpaths, lighting, open spaces, surface water drainage and other public amenities. All property owners benefit from this expenditure in their locality, regardless of whether they are obliged to pay management fees or not.
There is no exemption from, or reduction in, LPT for those paying management or apartment fees under the Finance (Local Property Tax) Act 2012 as amended. When a person pays a management fee, they receive services such as bin collection, maintenance of common areas and a sinking fund for repairs. These are costs that property owners or occupiers who do not pay management fees must meet from their own means.
The 2019 LPT Inter-Departmental Review Group looked at this matter but did not recommend that persons paying management fees be afforded relief in respect of LPT. Moreover, the review did not consider that there was a case for deductibility of such management fees against LPT.
A requirement to pay a management fee or service charge to property management companies is not relevant in determining whether a property is subject to the LPT. Accordingly, whilst those who are liable for these payments may be exempt from LPT for another reason, or may be entitled to avail of a deferral arrangement under the provisions contained in the legislation, there is no specific exemption for the payment of management fees, nor is there provision to offset the amount paid on management fees against LPT. I have no plans to change this.
350. Deputy James Geoghegan asked the Minister for Finance the steps his Department has taken to review or renegotiate Ireland's obligations under the Foreign Account Tax Compliance Act, particularly in relation to the requirement for Irish residents to complete US tax forms when opening bank accounts; if he will consider measures to reduce the administrative burden on non-US persons; and if he will make a statement on the matter. [62996/25]
View answerIreland signed an Intergovernmental Agreement with the United States (US) in December 2012 to implement the US Foreign Account Tax Compliance Act (FATCA). This Agreement provides for a bilateral, and reciprocal, exchange of financial account information with the US.
As this is a reciprocal agreement, US financial institutions report details of accounts held by Irish [tax residents while] Irish financial institutions report details of accounts held by US citizens and US tax residents. In the case of accounts held by Irish tax residents in US financial institutions, FATCA specifically requires that certain information be obtained by the US financial institution, including the name, address and Irish Tax Identification Number (TIN) of the account holder as well as details of income credited to the account. This information is then exchanged by the US with Ireland (Revenue).
In the case of accounts held by US citizens and US residents in Irish financial institutions, Irish financial institutions must obtain comparable information and report that information annually to Revenue by 30 June regarding the previous calendar year. Revenue exchanges this information with the US by 30 September each year. The first exchange of information between the US and Ireland happened in 2015.
The automatic exchange of information is regarded as the best system for ensuring that tax authorities can assess and collect the taxes they are due on income and capital that their residents have abroad. FATCA is one of many automatic exchange of information tools available to tax authorities including Revenue. The data provided through FATCA is used by Revenue to cross-reference with tax returns filed in Ireland, allowing for highly targeted compliance interventions and audits of non-compliant taxpayers.
The existence of the information exchange agreement also acts as a significant deterrent to individuals attempting to hide income, profits, or gains in US financial institutions to evade Irish tax obligations.
FATCA has served as a highly valuable tool in significantly enhancing tax transparency and compliance, and I do not plan to direct my officials in the Department of Finance to review or renegotiate this agreement with the US.
