Written Answers Nos. 208-228
208. Deputy Liam Quaide asked the Tánaiste and Minister for Finance whether his plans to grant planning exemptions for modular homes will be accompanied by any changes to capital acquisitions tax in respect of individuals wishing to pay for the cost of building a modular home on another landowner’s property; and if he will make a statement on the matter. [32876/26]
View answerCapital Acquisitions Tax (CAT) is a tax which applies to both gifts and inheritances and is charged at a rate of 33%. For CAT purposes, the relationship between the person giving a gift or inheritance and the person who receives it determines the maximum amount, known as the “Group threshold”, below which CAT does not arise. It is important to say that the group thresholds were most recently increased in Budget 2025 as follows:
The Group A threshold, which in general applies where the beneficiary is a child of the disponer, increased to €400,000 from €335,000.
The Group B threshold increased to €40,000 from €32,500. This threshold applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer.
The Group C threshold increased to €20,000 from €16,250, with this threshold applying in all other cases.
These increases amounted to an increase of approximately 19.4% on Group A, while Group B and C Thresholds increased by 23%.
As the Deputy will be aware, my officials examined CAT as part of last year's annual Tax Strategy Group exercise. The resultant papers outlined the tax policy considerations for the Government including the background for the different thresholds, as well as the options available to it in forming last year's Budget . They were published in advance of the Budget and are the best means of considering issues such as inheritance tax in an analytical and transparent way. The Tax Strategy Group is not a decision-making body and the papers produced by my Department are simply a list of options and issues to be considered in the Budgetary process. The Tax Strategy Group paper relating to CAT also examined a number of cost modelling exercises, including proposals to amend the Group B threshold parameters which I am aware a number of Deputies have raised in the past year. My officials intend to include an update of this matter in the Tax Strategy Group papers this year.
As demonstrated by that exercise, there is a significant associated cost with further changes to the group thresholds.
I note the Deputy's particular query about modular homes and CAT and am not in a position to make a particular comment about this matter other than to say that any further changes to the thresholds and who falls within these thresholds must be considered among various other demands within the overall Budget package, as they have been in the past. In that regard, you should note that the CAT group thresholds are kept under review annually by my officials throughout the Finance Bill cycle.
209. Deputy Keira Keogh asked the Tánaiste and Minister for Finance if he will provide an update on the steps his Department is taking towards reform of the deemed disposal rules on ETFs, in an effort to level the playing field for ordinary investors; and if he will make a statement on the matter. [31857/26]
View answerThe Deputy has asked about the deemed disposal rules for Exchange Traded Funds (ETFs).
There is no separate taxation regime for ETFs. They are subject to the same rules as other investment funds. However, unlike most other investment funds where the fund calculates the tax due and returns it to Revenue, where an ETF is held on a recognised clearing system, investors are required to calculate and return the tax due in the self-assessment system.
Deemed disposal is an anti-avoidance measure that applies to investments in Irish domiciled investment funds and life assurance products , as well as equivalent offshore funds and certain foreign life assurance products, including relevant ETFs. It was introduced in Finance Bill 2006 to prevent the indefinite roll-up of income and gains, and the associated loss of tax to the Exchequer.
Under deemed disposal, tax is levied eight years after an investment is made, and every subsequent eight years, regardless of whether or not a disposal has in fact occurred. The tax is levied on any gain in the value of the investment from the date of acquisition to the date of the deemed disposal. On the ultimate disposal of the investment, any tax paid is allowed as a credit against the final tax liability.
I acknowledge the complexities associated with deemed disposal, particularly for ETFs, but as articulated in the Funds Review report, any changes to these rules require guardrails to protect the Exchequer and ensure that appropriate taxation is paid. A balance between supporting retail investment while retaining important and necessary anti-avoidance protections, taking account of potential Exchequer impacts is required.
I am committed to taking the necessary action to support retail investment in Ireland. Budget 2026 introduced a reduction in the taxation rate that applies to Irish and equivalent offshore funds and Irish and certain foreign life assurance products, from 41% to 38%. This change also applies to investments in Exchange-Traded Funds (ETFs) that are taxed under these regimes.
Budget 2026 also included a committed to publishing a roadmap for the taxation of retail investment, setting out an approach to simplify and adapt the tax framework to further support retail investment while retaining necessary and important anti-avoidance protections in a proportionate manner. The roadmap will be published in the coming months. The roadmap will take the Funds Review and the European Commission's Savings and Investment Account recommendation into consideration,. A key aspect of the roadmap is the development of a new Irish investment account that aims to reduce the complexities related to retail investment taxation and allows Irish people to grow their savings more efficiently.
210. Deputy Conor Sheehan asked the Tánaiste and Minister for Finance the number of people registered with the Revenue Commissioners for the rent-a-room tax relief in each of the years from its introduction in 2001 to date, in tabular form; and if he will make a statement on the matter. [31865/26]
View answerRent-a-Room relief, which is provided for in section 216A Taxes Consolidation Act 1997 (TCA), was introduced in Finance Act 2001 with the aim of increasing the availability of rented residential accommodation.
The relief acts as an incentive to encourage individuals to let rooms in their principal private residence as residential accommodation in order to bring about an increase in the availability of rental accommodation.
In accordance with section 216A TCA, an individual who lets a room or rooms in their sole or main residence as residential accommodation may be exempt from income tax, PRSI and USC in respect of income from the letting where the aggregate of the gross rents and any sums for meals or other services supplied with the letting does not exceed the threshold at present of €14,000 per year. Although the income is exempt it must be included in the individual’s tax return for the year in question.
Further details in respect of rent-a-room relief can be found in Tax and Duty Manual Part 07-01-32 on the Revenue's website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf.
I am advised by Revenue that the number of taxpayer units who availed of the ‘Rent-a-Room Relief’ up to an including 2023 is as set out in the table below. The 2024 data will be available in the coming months.
Table: Rent-a-Room Claimants (Taxpayer Units)
|
Year |
Claimants (Taxpayer Units*) |
|
2023 |
16,580 |
|
2022 |
14,180 |
|
2021 |
10,730 |
|
2020 |
9,310 |
|
2019 |
9,810 |
|
2018 |
9,240 |
|
2017 |
8,160 |
|
2016 |
7,350 |
|
2015 |
6,460 |
|
2014 |
5,710 |
|
2013 |
5,730 |
|
2012 |
5,250 |
|
2011 |
3,920 |
|
2010 |
3,770 |
|
2009 |
3,770 |
|
2008 |
3,600 |
|
2007 |
3,180 |
|
2006 |
3,560 |
|
2005 |
2,820 |
|
2004 |
2,300 |
|
2003 |
2,000 |
|
2002 |
1,440 |
*A taxpayer unit refers to an individual except in the case of jointly assessed couples who are counted as one taxpayer unit.
211. Deputy Paul Donnelly asked the Tánaiste and Minister for Finance if the Government will consider reducing VAT on new builds to 9% and put measures in place to ensure developers do not increase prices even more as a result. [31866/26]
View answerAs the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
The deputy should note that it is not possible to ensure that developers will pass any or all of a VAT reduction to the final consumer.
212. Deputy Thomas Gould asked the Tánaiste and Minister for Finance whether the Revenue Commissioners can fast-track resolution of outstanding local property tax payments for those seeking the fair deal scheme or local authority grants. [31937/26]
View answerI am advised by Revenue that Local Property Tax is administered in accordance with the provisions set out in the Finance (Local Property Tax) Act 2012 (as amended). The legislation outlines the obligations for all residential property owners. LPT is a self-assessed tax and, in common with other self-assessed taxes, certain responsibilities rest with the property owner (liable person), and all property owners must ensure the annual LPT charge is paid on time.
Revenue’s longstanding approach is to make compliance with tax obligations as straightforward as possible. The LPT online service provides a simple and efficient means for property owners to access their records and to complete and submit returns and payments. Available 24 hours a day, the service allows users to check liabilities and balances due, and to make or amend payment options at their convenience. It also enables property owners to print a statement confirming LPT compliance for grant purposes by selecting ‘View Payment History’.
Revenue offers a range of payment options to assist property owners meet their LPT obligations in a way that best suits individual circumstances. Property owners can opt to make one single payment or spread payments over the year. They can also authorise another person to make payments on their behalf.
Further information and guidance regarding LPT payment options is also available on Revenue’s website at: www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx.
In addition, a dedicated LPT Helpline Service operates to assist property owners who cannot avail of online facilities, or who require assistance in meeting their LPT obligations. This Helpline operates from 9:30 to 16:30, Monday to Friday. Property owners can contact the Helpline to make a payment for LPT, through one of the single, or phased payment options.
Revenue engages with property owners who wish to enter into phased payment arrangements to clear outstanding LPT liabilities over time. Property owners with arrears are encouraged to contact Revenue, either through the LPT Helpline or via the secure MyEnquiries facility, to agree a mutually acceptable payment arrangement. Once such an arrangement is agreed, LPT compliance is met for the purposes of the fair deal scheme and/or local authority grants.
If the Deputy is aware of a specific taxpayer that requires assistance, he can provide the details through the Oireachtas Helpline telephone number and Revenue will make direct contact with the taxpayer.
213. Deputy Robert O'Donoghue asked the Tánaiste and Minister for Finance the rationale for limiting the forthcoming 9% VAT rate reduction, due to take effect in July 2026, to hairdressers and barbers, excluding the wider beauty sector; whether any consideration was given to extending the 9% VAT rate to beauty service providers; if so, the outcome of that consideration; and if he will make a statement on the matter. [32017/26]
View answer214. Deputy Robert O'Donoghue asked the Tánaiste and Minister for Finance the basis on which distinctions were made between hairdressing/barbering services and other personal care services within the beauty sector for the purposes of VAT policy; if he is aware of the financial pressures currently facing businesses in the beauty sector; whether these were taken into account in the decision to exclude them from the reduced VAT rate; and if he will make a statement on the matter. [32018/26]
View answer215. Deputy Robert O'Donoghue asked the Tánaiste and Minister for Finance if any engagement has taken place with representative bodies from the beauty industry regarding VAT rates; if so, the nature of such consultations; and if he will make a statement on the matter. [32019/26]
View answer239. Deputy Keira Keogh asked the Tánaiste and Minister for Finance to consider extending the VAT reduction that is applied to the hospitality sector to include the beauty industry, given that beauty salons were classified under hospitality during the Covid-19 closures, and also taking into account that the 9% VAT rate applied to hairdressers will not be applicable to beauty salons who do not offer this service; and if he will make a statement on the matter. [33029/26]
View answerI propose to take Questions Nos. 213, 214, 215 and 239 together.
The VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they are exempt from VAT or fall within the categories of goods and services listed in Annex III of the EU VAT Directive, to which Member States are permitted to apply lower VAT rates subject to certain rules.
Beauticians are not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT, and therefore they would fall to be taxed by Member States at their standard rate of VAT – which in Ireland is currently 23%. However, the Directive allows that a Member State may retain certain long-standing VAT arrangements that they had in place, subject to strict conditions including that the terms of the historic arrangement cannot be extended.
On this basis, Ireland is permitted to retain its long-standing application of its reduced VAT rate – which is currently 13.5% – to services related to the care of the human body, which includes beautician services. In accordance with the Directive this arrangement is treated as a ‘parked’ rate, which means that it cannot be reduced below 12%. If Ireland were to cease the application of the parked rate to these supplies, then under the terms of the Directive these services would have to be subject to the standard rate of VAT.
As hairdressing services are specifically included in Annex III and are not a ‘parked’ item, it is possible to apply the 9% rate to them. Therefore, in accordance with Finance Act 2025 the 9% rate will apply to hairdressing services from 1 July 2026. This measure includes hairdressing services provided by beauticians but does not extend to other beauty services.
As the position is as outlined and there is no possibility of extending the reduced rate of VAT as requested.
216. Deputy Paul Nicholas Gogarty asked the Tánaiste and Minister for Finance the full cost to the Exchequer of the disabled drivers scheme in 2025, to include all tax exemptions under the scheme and the fuel grant element; whether regular Tax Expenditure Evaluation Reports have been carried out on the scheme as required under his Department's Tax Expenditure Evaluation Guidelines 2014 and 2024; and if he will make a statement on the matter. [32024/26]
View answerI am advised by Revenue that the cost of the Disabled Drivers and Passengers Scheme (DDS) in 2025 including all tax exemptions under the scheme and the fuel grant element was €97.7 million. This total cost is comprised of VRT of €49.1 million, VAT of €36.8 million and the Fuel Grant of €11.8 million.
The Deputy should note that my Department and I share concerns that the DDS is no longer fit-for-purpose and believe it should be replaced with a needs-based, grant-led approach for necessary vehicle adaptations that could serve to improve the functional mobility of the individual.
Under the aegis of the Department of the Taoiseach, the sub-group convened to progress the National Disability Inclusion Strategy proposals for a needs-based, grant-aided, modern vehicle adaptation supports to replace the DDS, generated a report that was submitted to the Department of the Taoiseach. Analysis on the cost to the exchequer of the DDS scheme was included in this report and has been carried out through the review process. In considering this report, it has been proposed that a new grant-based scheme be developed and led by the Department of Transport.
The Department of Transport is beginning the development of this new scheme. The existing DDS remains with the Department of Finance and will continue to be reviewed in the context of new scheme developments by the Department of Transport.
As the Deputy will be aware, when this government took office, we committed to a step change in the delivery of supports and services for people with disability and their families.
Budget 2026 is the first step in delivering on this ambition, providing some €3.83 billion to specialist disability services next year, an unprecedented increase of €618 million, or almost 20%.
This funding will be vital in delivering the National Human Rights Strategy for Disabled People. The commitment to develop a new scheme by the Department of Transport, and in this context review the Disabled Drivers and Disabled Passengers Scheme, are strong commitments in this strategy.
217. Deputy Darren O'Rourke asked the Tánaiste and Minister for Finance the reason the bike-to-work scheme is not available to those who are retired, on a pension and continue to pay tax; if he plans to change this position; and if he will make a statement on the matter. [32059/26]
View answerAs the Deputy may be aware, section 118(5G) of the TCA provides for the Bike-to-Work Scheme. This scheme offers an exemption from Benefit-in-kind where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work.
The scheme was introduced as an incentive to increase the number of people commuting to work by bicycle.
Under section 118B TCA, an employer and employee may enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a benefit such as those provided under the scheme.
A Benefit-in-kind is a charge to tax which arises where an employer provides an employee with a benefit, such as a bicycle, car or accommodation. These benefits have monetary value and are treated as taxable income. The Bike-to-work scheme provides for an exemption from this charge.
Therefore, the Bike-to-Work scheme is only applicable where the bicycle and/or related safety equipment is provided by an employer to either their director or someone in their employment.
Where an employer-employee relationship does not exist. Therefore, the scheme does not apply in the case of retired or self-employed individuals.
Likewise, salary sacrifice arrangements can only be entered into between an employer and a director or employee.
The scheme was implemented as tax-exempt benefit-in-kind in order to keep the implementation as simple as possible and reduce administrative burden for employers and employees.
While, at present, I am satisfied with the operation of the scheme, the Deputy should note that the Programme for Government 2025, "Securing Ireland's Future", does contain a commitment to, within the lifetime of this Government, conduct a review of the Bike-to-Work scheme, to boost take-up among all workers.
218. Deputy Sean Fleming asked the Tánaiste and Minister for Finance to respond correspondence (details supplied); and if he will make a statement on the matter. [32194/26]
View answerThe flat rate expense (“FRE”) regime is operated by Revenue on an administrative basis, where both a specific commonality of expenditure exists across an employment category and the statutory requirement for the tax deduction as set out in section 114 of the Taxes Consolidation Act (“TCA”) 1997 is satisfied, namely, that the expenses are wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment by the employee concerned and that such expenses are not reimbursed by his or her employer.
Revenue have advised that the FRE regime was established to apply a uniformity of approach to tax deductibility for expenses of large groups of employees and to facilitate ease of administration for both Revenue and employees. The expense should apply to all employees in that category and not be discretionary.
The FRE regime developed incrementally over the last 40 to 50 years and was established at a time when the numbers of employees/PAYE taxpayers filing an Income Tax Return was relatively low. This contrasts with the position today, whereby due to significant IT developments in Revenue systems in recent years, as well as the promotion of online channels, Revenue is now providing an easy to use, free, on-line Income Tax Return filing solution for taxpayers. For example, the number of PAYE taxpayers that filed an Income Tax Return for the 2023 tax year was over 1,100,000, when compared to the figure of under 300,000 in 2018.
Revenue have advised that the FRE is generally determined following engagement between Revenue and the relevant representative body. I am advised by Revenue that they have not received any formal application from a representative body on behalf of individuals working as paramedics for the National Ambulance Service or pre-hospital emergency care workers. I am further advised by Revenue that should the representative bodies for these groups wish to engage with Revenue further on the matter, Revenue will be happy to do so and will provide guidance on the supporting information required to enable the request to be considered.
Notwithstanding that an FRE is not available to either paramedics or pre-hospital emergency care workers, as for all employees, they retain their statutory right to claim a deduction under section 114 TCA 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent to which the expenses are not reimbursed by the employer.
The quickest and easiest way to claim tax relief for qualifying employment expenses is to complete an online Income Tax Return. This return can be found in the PAYE Services tab in myAccount on the Revenue website.
Further guidance on the general rule of deduction of expenses in employment, including how to make a claim, is available on Revenue’s website at the following link: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-20.pdf.
219. Deputy Carol Nolan asked the Tánaiste and Minister for Finance to list each occasion that he and his predecessor travelled outside of the State from 23 January 2025 to date in 2026; to specify on which occasions the Government jet was used; and on which occasions a commercial airline was used; and if he will make a statement on the matter. [32219/26]
View answerBelow is a table setting out the occasions when the Minister for Finance has travelled out of the State on an aircraft since 23 January 2025.
|
Date |
Destination |
Description |
|
17-19 February 2025 |
Brussels |
Commercial airline |
|
24 - 28 February 2025 |
South Africa |
Commercial airline |
|
10-11 March 2025 |
Brussels |
Commercial airline |
|
12-15 March 2025 |
Germany |
Commercial airline |
|
20-21 March 2025 |
Brussels |
Commercial airline |
|
10-12 April 2025 |
Warsaw |
Commercial airline |
|
14-16 April 2025 |
Cyprus/Greece |
Commercial airline |
|
22-26 April 2025 |
Washington |
Commercial airline |
|
12 - 13 May 2025 |
Brussels/London |
Commercial airline |
|
19 May 2025 |
Amsterdam |
Commercial airline |
|
3-5 June 2025 |
Frankfurt |
Commercial airline |
|
12 - 15 June 2025 |
Stockholm |
Commercial airline |
|
19 - 20 June 2025 |
Luxembourg |
Commercial airline |
|
4 - 6 July 2025 |
Aix-en-Provence |
Commercial airline |
|
7 - 8 July 2025 |
Brussels |
Commercial airline |
|
18 - 21 September 2025 |
Copenhagan |
Commercial airline |
|
22 - 23 September 2025 |
Zurich |
Commercial airline |
|
8 - 10 October 2025 |
Luxembourg |
Air Corp |
|
14 - 18 October 2025 |
Washington |
Commercial airline |
|
23 - 24 October 2025 |
Brussels |
Commercial airline |
|
12 - 14 November 2025 |
Brussels/Frankfurt |
Commercial airline |
|
4 - 5 December 2025 |
Cardiff |
Air Corp |
|
11- 12 December 2025 |
Brussels |
Air Corp |
|
11 - 15 January 2026 |
San Francisco |
Commercial airline |
|
19 - 20 January 2026 |
Brussels |
Air Corp |
|
16 - 17 February 2026 |
Brussels |
Air Corp |
|
9 - 11 March 2026 |
Brussels/Paris |
Air Corp |
|
14 - 16 March 2026 |
London |
Air Corp |
|
4 - 5 May 2026 |
Brussels |
Air Corp - Government jet |
220. Deputy Cathal Crowe asked the Tánaiste and Minister for Finance the Government's position on the proposed Multiannual Financial Framework (MFF) 2028-2034, specifically regarding the inclusion of dedicated health-related funding windows and earmarked resources for EU-wide cancer prevention and research initiatives; and if he will make a statement on the matter. [32240/26]
View answerNegotiations are ongoing at EU-level since the European Commission’s initial publication of proposals for the next Multiannual Financial Framework (MFF) 2028-2034 in July and September of last year. These negotiations are expected to continue through Ireland’s term holding Presidency of the Council of the European Union in the second half of 2026.
My colleague the Minister for Foreign Affairs and Trade and I in my role as Minister for Finance jointly lead the development of Ireland’s positions in relation to the EU’s Multiannual Financial Framework (MFF). As such it is my role to update Government regularly on negotiations, in close cooperation with the Minister for Foreign Affairs and Trade and the Minister of State for European Affairs.
Ireland’s priorities in negotiations most notably but not limited to, are a strong and ring-fenced Common Agricultural Policy and Common Fisheries Policy; continued support for the PEACE PLUS programme in Northern Ireland and the border counties of Ireland; funding for competitiveness and excellent research; sustained support for Ukraine; continued development and humanitarian assistance; and a revenue system that is fair, equitable, simple and transparent, primarily based on Gross National Income. As part of the wider simplification drive, we must ensure reduced administrative burden for beneficiaries of EU funds.
As part of the Commission’s proposals, a new European Competitiveness Fund (ECF) aims to be a major initiative that consolidates existing financial instruments and funding streams into a single, streamlined mechanism. The European Competitiveness Fund, negotiations on which are led by the Department of Enterprise, Tourism and Employment, is structured along four policy windows including a specific window for Health, Biotech, Agriculture and Bioeconomy’.
Support for this policy window is proposed to be implemented in particular by improving and protecting health, including cross-border health, by prioritising health promotion and disease prevention across the life course, by fostering early detection and treatment, by strengthening innovation, and through health-in-all and One Health policies, with a special emphasis on communicable and non-communicable diseases.
The fund is proposed to be highly flexible, with specific priorities determined by annual work programmes. The European Commission has advised that under its proposal, all actions previously funded under EU4Health - including those for cancer and rare diseases - will remain eligible for funding under the ECF.
To deliver on the objective of translating research results into markets and strengthening Union’s industrial presence in strategic technologies and sectors, the Framework Programme for Research and Innovation (Horizon Europe), on which negotiations are led by the Department of Further and Higher Education, Research, Innovation and Science, is proposed to be tightly linked to the ECF and will support research and innovation activities.
221. Deputy Mairéad Farrell asked the Tánaiste and Minister for Finance to clarify where liability lies for the tax owed under Karshan settlements; if workers who were reclassified as employees as a result of the Karshan ruling are compelled to reimburse their employers as a result of the tax paid by those employers for 2024 and 2025 as part of a Karshan settlement; and if he will make a statement on the matter. [32273/26]
View answerThe disclosure initiative announced by Revenue in September 2025, provided employers with an opportunity to correct payroll tax issues for 2024 and 2025 arising from bona-fide classification errors, without imposition of interest and penalties. Employers who, acted in good faith relying on the case law and guidance available prior to the Supreme Court judgment, but who may have misclassified employees as contractors were encouraged to take the opportunity to regularise their tax affairs.
An employer is required to deduct Income Tax, USC and PRSI from their employee’s gross wages before paying them. The employer’s obligation to deduct and remit the relevant tax under the PAYE system is set out in Chapter 4 of Part 42 ‘Collection and recovery of income tax on certain emoluments (PAYE system)’of the Taxes Consolidation Act 1997 (TCA 1997).
Section 984B of Chapter 4 of Part 42 TCA 1997 sets out that employers are required to remit the relevant Income Tax, USC and PRSI directly to Revenue, regardless of whether or not the deduction is actually made from the payments made to the employees. The liability in relation to the deduction of the relevant taxes under the PAYE system from the wages of employees and the payment of those taxes to Revenue is that of the employer.
Employees who were included in this settlement arrangement have been paid “gross” in 2024 and 2025 without deduction of payroll withholding taxes. Employers were requested to advise employees not to declare income which was included in the disclosure when filing their income tax returns for 2024 and 2025.
Where an individual has already filed a return for 2024, there will be “credit” available for tax paid through the self-assessment system by those employees. This is to avoid a situation where the income is taxed twice.
Settlement for 2025 was required before the self-assessment deadline for that year. This means that there may be no “credit” for tax paid through the self-assessment system by employees available to employers who were availing of these settlement terms, as the employees will not have paid tax under self-assessment on this income.
The disclosure initiative was intended for employers to regularise their position with Revenue in relation to these employer liabilities. There is no requirement for individuals who were reclassified as employees to reimburse their employers for the tax paid as part of the disclosure initiative by those employers for 2024 and 2025.
Guidance on the disclosure initiative is set out in Tax and Duty Manual ‘Settlement arrangement arising from Revenue v Karshan (Midlands) Ltd. trading as Domino’s Pizza’ which is available at: www.revenue.ie/en/tax-professionals/tdm/compliance/audit-and-other-compliance-interventions/karshan-settlement-guidance/karshan-disclosure-opportunity-guidance.pdf.
222. Deputy Mairéad Farrell asked the Tánaiste and Minister for Finance if his attention has been drawn to the effect of the Karshan judgement on freelance and self-employed workers; the information and guidance his Department has made available to freelance and self-employed workers to navigate the impact of the judgement on their work; and if he will make a statement on the matter. [32274/26]
View answerAs the Deputy will be aware, on 20 October 2023, the Supreme Court delivered a unanimous judgment in the Revenue Commissioners v Karshan (Midlands) Ltd. t/a Domino’s Pizza case. The case was concerned with whether delivery drivers were independent contractors under a “contract for service” and taxable under Schedule D of the Taxes Consolidation Tax 1997, or employees under a “contract of service”, and taxable under Schedule E of the Act (PAYE). The Supreme Court upheld the Tax Appeals Commission determination that the delivery drivers were employees of the company.
While the judgment related to a company engaging individuals as delivery drivers, as a decision of the Supreme Court, the judgment has application across all sectors, including for freelance workers.
While there has been no recent change to tax policy or tax treatment in this area, as a decision of the Supreme Court, the judgment is binding and must be applied to all sectors and all businesses operating in Ireland. Revenue cannot disregard the implications of a Supreme Court judgement, nor would they seek to. Following the judgment, Revenue published detailed guidance in May 2024 in its Tax And Duty Manual Revenue Guidelines for Determining Employment Status for Taxation Purposes Part 05-01-30. This guidance explains the five step framework that is required to be applied by all businesses who engage individuals to carry out work and provides a number of practical examples to assist businesses and organisations in this regard.
Within this guidance, Revenue encouraged all businesses to “comprehensively review arrangements with all workers and determine their employment status for taxation purposes”. The guidance applies to all sectors, including businesses engaging workers on a freelance basis. The decision of the Supreme Court sets out a five-step framework that must be applied by reference to the facts and circumstances of an individual case, to ascertain whether an individual is an employee, or self-employed, for the purpose of taxation.
Revenue recognised that prior to the judgment in October 2023, some employers, acting in good faith, may have misclassified employees for tax purposes as persons engaged in contracts for services. It was in this context that on 11 September 2025, Revenue announced a disclosure opportunity to incentivise such employers to make a disclosure in respect of 2024 and 2025 arising from bona-fide classification errors.
The Karshan disclosure opportunity was available to all employers in the State and across all sectors, provided that they meet the terms as outlined in the disclosure initiative. To avail of the settlement terms outlined, all disclosures were to be submitted to Revenue no later than 30 January 2026.
In addition, Revenue had engaged via the Tax Administration Liaison Committee (TALC) Audit with the professional tax advisor, accounting and legal bodies who are members of TALC on the Karshan disclosure initiative and also participated in an Irish Tax Institute (ITI) Tax Talks podcast to discuss the initiative.
223. Deputy Peadar Tóibín asked the Tánaiste and Minister for Finance the number of protected disclosures that have gone missing or have been compromised that have been submitted to his Department or State bodies that are responsible to his Department over the past ten years. [32287/26]
View answerI can confirm to the Deputy that, in respect of my Department, I am not aware of any reports received under the Protected Disclosures Act 2014 at any time over the past ten years, that have gone missing or been compromised. All such reports have been managed in accordance with established procedures and the relevant legislation.
The Bodies under the Aegis of my Department have also confirmed that they are not aware of any instances where a disclosure has gone missing, or any instances where the identity of a reporting person has been compromised.
The Deputy may be aware that the Protected Disclosures Act was amended in 2022, with section 22 providing for the annual publication of a report on disclosures received, while maintaining the confidentiality of reporting persons. In compliance with this provision, my Department has submitted its report for 2025 to the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation and published the report on its website. Where applicable, the Bodies under the Aegis of my Department also publish relevant information on their websites.
224. Deputy Peadar Tóibín asked the Tánaiste and Minister for Finance the number of staff that are currently inactively employed by his Department or any organisation with responsibility to his Department. [32307/26]
View answerThere are currently 35 staff inactively employed in my Department.
The table below sets out the breakdown by the type of leave.
|
Type of Leave |
Number of staff |
|
Career Break |
16 |
|
Special Leave Unpaid |
1 |
|
Unpaid leave to accompany spouse abroad |
1 |
|
Special Leave work in EU/Int Org |
9 |
|
Staff Seconded Out to other Departments |
8 |
|
Total |
35 |
The below sets out information provided by the Bodies under the Aegis of my Department.
The Office of the Comptroller and Auditor General (OCAG)
OCAG has two staff that are currently inactively employed due to being on short or long-term leave.
Financial Services and Pensions Ombudsman (FSPO)
FSPO has six staff that are currently inactively employed due to being on short or long-term leave.
The Central Bank (CBI)
The total inactive Full Time Equivalent (FTE) in the Central Bank of Ireland was 157.5 at end April 2026, and can be broken down as follows:
|
Inactive FTE |
Apr-26 |
|
Secondment |
42.0 |
|
Career Break |
33.0 |
|
Long Term Sick Absence |
24.5 |
|
Parental Leave |
11.0 |
|
Parents Leave |
8.0 |
|
Paternity Leave |
0.0 |
|
Maternity Leave |
35.0 |
|
Adoption Leave |
0.0 |
|
Carers Leave |
4.0 |
|
Inactive FTE Total |
157.5 |
Note: Inactive FTE values fluctuate on a monthly basis.
Investor Compensation Company Limited (ICCL)
ICCL has nine staff assigned from the Central Bank of Ireland, of which 1 staff member is currently "inactive".
The Office of the Revenue Commissioners (Revenue)
As of 1 May 2026, there are 323 individuals on leave who are not actively working, based on the latest data extract.
A summary of the key leave categories is set out below:
• Leave of Absence (134): Primarily career breaks; typically unpaid.
• Shorter Working Year (SWY) (1): One individual currently on SWY exceeding 8 weeks.
• Paid Leave (76): Includes sick leave, maternity leave, parental leave and carer’s leave.
• Temporary Rehabilitation Remuneration (TRR) / Temporary Rehabilitation Pay (TRP) (86): Applies to individuals who have exhausted standard paid sick leave (full and half pay). This support mechanism is intended for long-term illness recovery and generally requires a minimum of two years’ service for eligibility.
• Other leave of absence (LOA) active status (26): Predominantly extended maternity leave and unpaid carer’s leave.
Absence Overview:
|
Absence Type |
Headcount |
|
Leave of Absence |
134 |
|
SWY (8 Wks +) |
1 |
|
Paid Leave |
76 |
|
TRR or TRP |
86 |
|
Leave of Absence (LOA) Active Status |
26 |
|
Total |
323 |
National Treasury Management Agency (NTMA)
The NTMA currently has 27 inactive employees, referring to those individuals who remain employed but are not actively working, including those on short or long term leave (including career break). Of note, this figure excludes employees currently on annual leave.
The NTMA assigns staff to Home Building Finance Ireland, the National Asset Management Agency and the Strategic Banking Corporation of Ireland.
For each of the remaining Bodies under the Aegis of my Department, this is a Nil return.
225. Deputy John Paul O'Shea asked the Tánaiste and Minister for Finance the impacts the EU proposal for regulation on the legal tender of banknotes and coins will have on businesses in Ireland; if businesses that specify that payment must be in a form other than cash will be in a position to continue that stance unaffected, based on the common law contractual principles of offer and acceptance; the latest anticipated timeframe for progress on the matter; and if he will make a statement on the matter. [32602/26]
View answer242. Deputy John Paul O'Shea asked the Tánaiste and Minister for Finance if the Irish Government will seek and/or support an exemption from the EU proposal for regulation on the legal tender of banknotes and coins in respect of enterprises where the use of cash could present law enforcement risks, risks to public safety and overall security risks, where the value of an asset taken into temporary possession by a customer exceeds ten thousand euro; and if he will make a statement on the matter. [33211/26]
View answerI propose to take Questions Nos. 225 and 242 together.
On 28 June 2023, the European Commission published the proposal for a regulation of euro banknotes and coins as part of the Single Currency Package. The regulation aims to protect European citizens’ right to pay with euro cash by introducing a general obligation of mandatory cash acceptance across the euro area. The regulation will also place an obligation on Member States to monitor and assess access to cash on an annual basis.
The proposal is progressing as part of the Single Currency Package, with the Danish Presidency reaching Council agreement on the package in December 2025. The European Parliament is finalising its position on the proposals, with trilogue negotiations expected to begin later this year under the Irish EU Council Presidency.
At present in Ireland, businesses are legally permitted to limit how they accept payments by displaying signs such as ‘no cash’ or ‘card payments only’. The mandate agreed at Council will prevent retailers or service providers from refusing cash as a form of payment, where they offer goods and services in public premises and the consumer is physically present.
The regulation will allow for exceptions to the general obligation of mandatory cash acceptance, such as if the refusal is made in good faith (for example, if the payee does not have the denominated change required to give the payer) or if both parties agree to use an alternative payment method. The Council mandate also provides an exception for unmanned points of sale.
In addition to this, the Council mandate also recognises that it should be possible for companies such as utility providers, who receive large payments on an infrequent basis, to exclude cash as a means of payment through pre agreed written contractual terms with the payer.
However the final details of the package have yet to be finalised and are subject to change during trilogue negotiations.
The provisions of the legal tender regulation will be without prejudice to existing anti-money laundering rules covered by the EU Anti-Money Laundering Regulation, allowing for refusals of cash in situations where sufficient AML requirements cannot be satisfied.
226. Deputy John Lahart asked the Tánaiste and Minister for Finance if he has considered increasing the rate of tax relief on qualifying health expenses not covered by private health insurance in light of rising healthcare costs and cost-of living pressures; and if he will make a statement on the matter. [32787/26]
View answerSection 469 of the Taxes Consolidation Act (“TCA”) 1997 provides for tax relief where an individual proves that he or she has incurred costs in respect of qualifying health expenses. Only “health expenses” incurred in the provision of “health care”, which has been carried out or advised by (in certain circumstances) a “practitioner”, will qualify for tax relief. Health care is defined as the “prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability”.
Health expenses are defined as “expenses in respect of the provision of health care” and may include, but are not limited to, the following:
• the services of a practitioner,
• diagnostic procedures carried out on the advice of a practitioner,
• maintenance or treatment necessarily incurred in connection with the services of a practitioner or diagnostic procedures carried out on the advice of a practitioner, and
• drugs or medicines supplied on the prescription of a practitioner.
A practitioner is defined as "any person who is:
• registered in the register established under section 43 of the Medical Practitioners Act 2007,
• registered in the register established under section 26 of the Dentists Act, 1985, or,
• in relation to health care provided outside the State, entitled under the laws of the country in which the care is provided to practice medicine or dentistry there".
Income tax relief in respect of qualifying health expenses, with the exception of relief in relation to nursing home expenditure, is granted at the standard rate of tax (20%).
I would note that the relief currently provides a significant level of support, and in 2023 the latest year for which data is available, the cost of tax relief for health expenses (excluding nursing home expenses) was €223.3 million and it was availed of by 706,300 claimants.
Further guidance on tax relief for qualifying health expenses can be found in Revenue’s Tax and Duty Manual Part 15-01-12, which can be accessed at the following link: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-12.pdf.
Finally, and as the Deputy will appreciate, decisions regarding taxation measures are normally made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances.
227. Deputy Colm Burke asked the Tánaiste and Minister for Finance Ireland's position on the application of excise duties to novel nicotine products at EU level, in the context of the anticipated revision of both the Tobacco Products Directive and the Tobacco Taxation Directive; whether Ireland supports a risk-proportionate approach to the taxation of such products relative to combustible tobacco; and if he will make a statement on the matter. [32835/26]
View answerNew novel products, such as nicotine pouches and heated tobacco products (non-combustible cigarettes), are outside the scope of the existing Tobacco Tax Directive (2011/64/EU) and currently not subject to excise duty.
On 16 July 2025, the EU Commission officially adopted a proposal for a recast of the Tobacco Tax Directive. The revision proposes an increase in minimum tax rates for traditional tobacco products, the expansion of the Directive to include new products (such as e-liquids and nicotine pouches), and the extension of the scope of the Directive to include raw tobacco to help in the fight against illicit manufacturing.
I very much welcome the proposal to include novel products in the scope of the revised Directive. Harmonising definitions and the tax treatment of novel products, such as nicotine pouches, will help to avoid legal uncertainty and regulatory disparities across the EU. Additionally, increasing minimum tax rates will help to reduce the significant price differentials that currently exist between Member States and reduce the affordability of new novel products.
Ireland is largely supportive of the measures included in the revised Directive and looks forward to constructive engagement on the Directive over the coming months.
228. Deputy Sean Fleming asked the Tánaiste and Minister for Finance if a response will issue to matters raised in correspondence regarding the cost of home heating oil and kerosene which is used for approximately 700,000 Irish homes (details supplied); and if he will make a statement on the matter. [32849/26]
View answerThe Government is very conscious of the substantial price increases in home heating oil as a result of the conflict in the Middle East.
It is important to note that the spikes in the price of home heating oil are not as a result of taxes, nor Government policy, but due to the wholesale market price of oil. Mineral Oil Tax is charged on a volumetric basis. It does not change when the wholesale price increases or decreases.
With regard to Kerosene, there is no non-carbon component of Mineral Oil Tax applying to heating oil. The Mineral Oil Tax applying to Kerosene is fully comprised of the carbon charge (carbon tax).
To protect those most at risk of fuel poverty, Government extended the fuel allowance season, which would have normally run for 28 weeks, by a further four weeks in order to ease the financial burden on households. This will result in additional payments of €152 to more than a quarter of all households.
For reference, a typical household receiving the fuel allowance will have received €1,216 over the course of the fuel allowance season.
Furthermore, conscious of the pressure being experienced by households owing to the conflict in the Middle East, the Government has announced the deferral of the next planned increase in carbon tax on home heating fuels, which was scheduled for 1 May, until 14 October.
Carbon tax remains an important part of Ireland’s overall commitment to tackling climate change and to lessen Ireland's dependence on fossil fuels, with successive annual budgets providing additional funds for targeted social protection payments, residential and energy efficiency measures, as well as funding to encourage green farming practices.
As of Budget 2026, the Government has allocated over €4.2 billion in carbon tax revenue for these purposes since 2020. ESRI analysis consistently shows the lower income deciles are better off as a result of the social protection measures funded by the increased carbon tax.
Our need to decouple from fossil fuel dependence and achieve energy security is even more apparent now given the levels of volatility in international fuel markets. Ireland’s long-term commitment to tackling climate change remains strong.
Policy options with regard to excise duty rates on energy products are considered as part of the annual Budgetary cycle which includes the presentation of tax policy options to the Tax Strategy Group. This involves consideration of policy rationale behind tax rates including relevant social, environmental and economic factors. Previous Tax Strategy Group Papers are available online: www.gov.ie/en/department-of-finance/collections/budget-2026-tax-strategy-group-papers/.
Policy options as regards energy supports, such as energy credits, are for consideration by the Minister for Climate, Energy, and the Environment.
