Written Answers Nos. 321-340
321. Deputy John Lahart asked the Minister for Finance further to Parliamentary Question No. 68 of 10 July 2024, the estimated available gains to the Exchequer from the schemes (details supplied); and if he will make a statement on the matter. [31649/24]
Amharc ar fhreagraAs the Deputy will be aware, Section 118(5G) of the Taxes Consolidation Act 1997 (TCA) provides for the Cycle to Work scheme. This scheme provides an exemption from benefit-in-kind (BIK) 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. Associated safety equipment may include items such as helmets, lights, bells, mirrors and locks.
One of three thresholds applies to the amount of exempted expenditure. The applicable threshold depends on the type of bicycle purchased and includes related safety equipment. Since 1 January 2023, the Cycle to Work scheme applies to the first:
• €3,000 of expenditure in relation to a cargo or e-cargo bike;
• €1,500 of expenditure in relation to a pedelec or e-bike; or
• €1,250 of expenditure in relation to any other type of bike.
The scheme operates on a self-administration basis. Relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. There is no notification procedure for employers involved. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers. Accordingly, there are no records available on the number of people availing of the scheme or the cost of the scheme. There are no gains to the Exchequer in relation to this scheme.
The Budget 2022 Tax Expenditure Report prepared by my Department estimated the cost of the scheme for 2020 at €4.5 million and notes that this figure is an estimate as separate returns are not required under the scheme. This estimate took account of the changes made to the scheme by Section 9 of the Financial Provision (Covid-19)(No. 2) Act 2020. This increased the allowable expenditure from €1,000 to €1,500 in respect of e-bikes and €1,250 in respect of bicycles and allowed the purchase of a new bicycle every 4 years instead of 5. The estimated costs for 2021 and 2022 were €5.5 million, respectively, with the full year impact of the changes.
Estimated costs for the scheme for 2023 will be provided in the Tax Expenditure Report for Budget 2025, which will be published later this year, will include estimates for 2023. An additional cost is anticipated on foot of an extension of the exemption limit of up to €3,000 in respect of cargo bikes which was introduced in Finance Act 2022.
Finally, the Deputy may also be aware that the Department of Transport published an examination of the scheme in November 2021 as part of the Spending Review series.
322. Deputy Robert Troy asked the Minister for Finance if consideration can be given to free car tax for people with a permanent disability and in receipt of a qualifying payment such as disability allowance or invalidity pension. [31654/24]
Amharc ar fhreagra370. Deputy Brendan Howlin asked the Minister for Finance when proposals for a revised disabled drivers and disabled passengers scheme, as recommended by the final report of the National Disability Inclusion Strategy Transport Working Group, will be brought to Government; when a modern, fit-for-purpose, vehicle adaptation scheme will be published; and if he will make a statement on the matter. [32441/24]
Amharc ar fhreagraI propose to take Questions Nos. 322 and 370 together.
The Deputy should note that my Department and I share concerns that the Disabled Drivers and Disabled Passengers Scheme or 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.
However, this is very much a matter for Government as whilst my Department has oversight of the DDS, I do not have responsibility for disability policy.
As the Deputy is aware the National Disability & Inclusion Strategy or NDIS Transport Working Group recommended that the DDS be replaced with a modern, fit-for-purpose vehicular adaptation scheme. This is in line with the general view that we need to move away from a medical criteria-based approach to a needs-based approach.
The next National Disability Strategy is currently under development, which will be a whole-of-government strategy that will advance the implementation of the United Nations Convention on the Rights of Persons with Disabilities. Transport has been identified as a strong point of focus and is intended to be a pillar therein.
Under the aegis of the Department of Taoiseach officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report including how the DDS can be replaced.
The Department of Finance submitted a note to the group with my predecessor's approval in mid-January 2024. This note outlines a proposal for a replacement scheme for the DDS which would be a needs-based, grant-led approach for necessary vehicle adaptations. Further consideration is being given to this matter through the establishment of sub-group of the Department of Taoiseach working group. This sub-group met in July 2024 and is expected to report in the Autumn.
In relation to free car tax for people with a permanent disability and in receipt of a qualifying payment such as disability allowance or invalidity pension, the Deputy should note that those who qualify for the DDS are exempted from motor tax already. Any further changes of this type would have to be considered as part of a broader review of this area such as the National Disability Strategy.
323. Deputy Alan Kelly asked the Minister for Finance the breakdown of new car sales in each VRT band in 2023 and for the first six months of 2024, in tabular form [31681/24]
Amharc ar fhreagraI am advised by Revenue that a breakdown of new and used Category A vehicle registrations by VRT band for 2023 and Quarter 1 2024, the latest period for which Revenue have compiled data, is available on the Revenue website at: www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/vrt/index.aspx.
Data in respect of Quarter 2 2024 are scheduled for publication in August of this year.
324. Deputy Éamon Ó Cuív asked the Minister for Finance the number of tax payers who are in employment that claim the flat rate expenses tax credit; the number estimated to be entitled to it; whether in Budget 2025 it is intended to simplify the number of rates of this tax credit and announce a publicity campaign to ensure the maximum number of eligible people claim it; and if he will make a statement on the matter. [31706/24]
Amharc ar fhreagraSection 114 of the Taxes Consolidation Act 1997 (TCA) provides for a tax deduction in respect of expenses incurred wholly, exclusively and necessarily by an individual in the performance of the duties of his or her employment.
Flat rate expenses (FRE) is not a tax credit, it is a 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 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.
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.
I am advised that Revenue that 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 is in contrast to the position today, whereby significant numbers of PAYE taxpayers routinely file an Income Tax Return to claim the range of tax reliefs and credits available to them, for example, medical expenses, the rent tax credit and remote working relief. In respect of the 2022 tax year, to date over one million Income Tax Returns have been filed with Revenue by PAYE taxpayers. This is in comparison to a figure of under 300,000 in respect of the 2018 tax year.
Where an FRE is not in place for an employment category, an employee retains his or her 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. For PAYE taxpayers, this return can be found in the PAYE Services tab in myAccount on the Revenue website.
The number of taxpayers with a PAYE employment on record that availed of an FRE in 2023 was 876,462. This figure is based on data currently available and is subject to change should additional claims for an FRE be made in respect of the 2023 tax year. Regarding the number of taxpayers estimated to be entitled to an FRE, it is not possible for Revenue to estimate this as a taxpayer must make a claim in order to avail of the FRE regime.
As noted above, the FRE regime is operated by Revenue on an administrative basis - an amount, that represents the common qualifying expenditure that is incurred across an employment category, is decided upon following detailed engagement between Revenue and the relevant representative body for the particular group of employees. I am advised by Revenue that there are no current plans to change the rates or the categories. Additionally, as noted above, a taxpayer retains their statutory right to claim a deduction for expenses incurred in employment where the conditions of section 114 TCA 1997 are met.
In January, Revenue, in conjunction with the Minister for Finance, launched a public information campaign to raise awareness among PAYE taxpayers about the range of tax credits and reliefs available, and how they can claim those credits and reliefs. The press release in relation to the Revenue information campaign for PAYE taxpayers is available on the Revenue website at www.revenue.ie/en/corporate/press-office/press-releases/2024/pr-012324-information-campaign.aspx
Further guidance on the general rule of deduction of expenses in employment is available on Revenue’s website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-20.pdf
325. Deputy Pádraig O'Sullivan asked the Minister for Finance if a person who has an American pension but is resident in Ireland must pay tax in both jurisdictions; and if he will make a statement on the matter. [31717/24]
Amharc ar fhreagraI am advised by Revenue that under general charging rules in Ireland, the extent to which a taxpayer is liable to tax on his or her US sourced income depends on his or her residence and domicile position for Irish tax purposes. An individual who is resident and domiciled for Irish tax purposes is liable to Irish income tax on their worldwide income. An individual who is resident, but not domiciled, for Irish tax purposes is liable to Irish income tax on Irish sourced income, but a liability to tax will only arise on their foreign sourced income only to the extent that this income is remitted to the State. This is known as the remittance basis of taxation.
Further information regarding the above is available at the following link:
www.revenue.ie/en/jobs-and-pensions/tax-residence/index.aspx
Therefore, the extent to which the payments are chargeable to Irish income tax depends on the residence and domicile position of the taxpayer. The USA tax rules will determine whether the payments will also be taxable in the USA. If the pension payments are chargeable to tax in the US and Ireland under the domestic tax rules of each country, then double tax relief may be available under the terms of the Ireland-US Double Taxation Treaty (DTT).
The Ireland-US DTT provides relief from double taxation, either by providing that a particular source of income is taxable in one country or that where income is taxable in both countries, one country (usually the country where the individual is resident) will give credit for tax deducted in the other country.
With respect to the US private occupational pension, Article 18(1)(a) of the DTT provides that pensions and other similar remuneration derived and beneficially owned by a resident of a Contracting State (in this case, the USA) in consideration of past employment are taxable only in the State of residence (in this case, Ireland) of the beneficiary. However, the US ‘saving clause’ in Article 1(4), may allow the US to tax a pension received by an Irish resident individual who is also a US citizen.
With respect to pensions derived from government service, in summary, Paragraph 2 of Article 19 allows the taxing rights to remain with the USA unless a taxpayer is both tax resident in and a national of Ireland.
I am further advised by Revenue that under domestic tax rules, section 200 of the Taxes Consolidation Act (TCA) 1997 provides for a tax exemption for certain foreign pensions which are paid to Irish resident taxpayers. Where these pensions are disregarded for income tax purposes in the hands of a resident of the country of source (in this case the USA), they are also disregarded for income tax purposes in this State, provided the country of source has a similar income tax system to Ireland. This means that, in general, a US pension (for example an occupational pension) that would not be subject to tax in the USA if it was received by a US resident taxpayer, will therefore not be subject to Irish Income Tax if paid to an Irish resident taxpayer.
There is an exception to this general rule in relation to United States social security pensions, which are excluded from the scope of the section. The specific treatment of United States social security pensions is dealt with under Article 18(1)(b) of the Ireland-US DTT. The DTT provides that United States social security pensions paid to Irish residents are exempt from tax in the United States, on the basis that they are subject to tax in Ireland. Revenue guidance material on section 200 is available in Tax and Duty Manual Part 07-01-09 Certain Foreign Pensions, which is available on Revenue’s website - www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-09.pdf.
In cases, where double taxation arises, the provisions of Article 24 on relief from double taxation will apply.
Without further specifics, the foregoing is a general overview of the position based on the information provided.
326. Deputy Rose Conway-Walsh asked the Minister for Finance to provide the general Government revenue and expenditure projections out to 2030 that underpin the summer economic statement; and if he will make a statement on the matter. [31755/24]
Amharc ar fhreagra327. Deputy Rose Conway-Walsh asked the Minister for Finance to provide the net spending and revenue projections out to 2030 that underpin the summer economic statement; and if he will make a statement on the matter. [31756/24]
Amharc ar fhreagra328. Deputy Pearse Doherty asked the Minister for Finance the estimated general Government balance and Exchequer balance in the years 2025 to 2030, respectively, under the summer economic statement; and if he will make a statement on the matter. [31886/24]
Amharc ar fhreagra329. Deputy Pearse Doherty asked the Minister for Finance to clarify the variance between the general Government surplus of just under €6 billion for 2025 referenced in the summer economic statement and projected general Government surplus of €9.7 billion for 2025 in the stability programme update; the reason for this variance; and if he will make a statement on the matter. [31887/24]
Amharc ar fhreagra330. Deputy Pearse Doherty asked the Minister for Finance the projected tax revenue in each of the years 2025 to 2030, under the summer economic statement. [31888/24]
Amharc ar fhreagra380. Deputy Ged Nash asked the Minister for Finance the projected updated general Government balance (GGB) for 2024 and 2025 respectively, after the publication of the summer economic statement and the allocation of €1.5 billion to the health vote; the projected end-of-year surplus or deficit, in light of the most recent Exchequer returns; if he will confirm that his Department does not have prepared updated GGB figures to hand; if not, the reason therefor; if he will furnish those projections for 2025 to 2030; and if he will make a statement on the matter. [32894/24]
Amharc ar fhreagraI propose to take Questions Nos. 326, 327, 328, 329, 330 and 380 together.
My Department has not produced updated fiscal projections as part of the Summer Economic Statement (SES) and accordingly the most recent projections remain those published as part of the Stability Programme Update (SPU), which extend to 2027.
The SES noted an implied General Government Balance for 2025. This is a purely indicative, high-level, technical assumption. This is broadly consistent with the surplus set out in the SPU after accounting for the additional expenditure announced in the SES, suggesting a General Government surplus of just under €6 billion for next year. It should be emphasised that this does not constitute a revised comprehensive fiscal forecast.
My Department will produce a full set of fiscal projections as part of Budget 2025 in the autumn. It is intended that these updated projections will extend to 2030. In addition, Government will produce its medium-term fiscal plan, as required under the EU fiscal framework.
331. Deputy Pearse Doherty asked the Minister for Finance the estimated impact of pillars 1 and 2 of the OECD agreement on tax revenue on each of the years 2025 to 2030, under the stability programme update and summer economic statement; and if he will make a statement on the matter. [31889/24]
Amharc ar fhreagra333. Deputy Pearse Doherty asked the Minister for Finance if the banking levy is in the tax base, under the summer economic statement, in each of the years 2025, 2026, 2027, 2028, 2029 and 2030, respectively; and the amount in the base in each of those years. [31923/24]
Amharc ar fhreagra344. Deputy Pearse Doherty asked the Minister for Finance the revenue provided in the tax base under the stability programme update and Summer Economic Statement with respect to the defective concrete products levy in the years 2025, 2026, 2027, 2028 and 2029; and the revenue forgone in each of those years by removing the levy. [31997/24]
Amharc ar fhreagra346. Deputy Pearse Doherty asked the Minister for Finance the revenue provided in the tax base under the stability programme update and the summer economic statement with respect to the special assignee relief programme in the years 2025, 2026, 2027, 2028 and 2029 respectively, and the revenue in the base in each of those years. [32073/24]
Amharc ar fhreagra398. Deputy Pearse Doherty asked the Minister for Finance the revenue provided in the tax base under the stability programme update and Summer Economic Statement with respect to the mortgage interest tax credit in the years 2025, 2026, 2027, 2028 and 2029 respectively; and the revenue in the base in each of those years. [33191/24]
Amharc ar fhreagra399. Deputy Pearse Doherty asked the Minister for Finance the money allocated to the rent tax credit and within the base under the Stability Programme Update and Summer Economic Statement for 2024, 2025, 2026, 2027 and 2028 respectively; and if there is €288 million in the tax base for the rent tax credit in 2024 given €200 million was allocated to it in Budget 2023 and a further €88 million was allocated to it in Budget 2024. [33208/24]
Amharc ar fhreagraI propose to take Questions Nos. 331, 333, 344, 346, 398 and 399 together.
My Department has not produced updated projections for tax revenue as part of the Summer Economic Statement (SES). As such the most recent fiscal projections remain those published as part of the Stability Programme Update (SPU) in April, which extend until 2027.
A first estimate of the net cost of implementation of the overall OECD agreement, i.e. taking into account the loss of tax revenue from Pillar One and expected increase from Pillar Two, was published by my Department in 2020. Annual corporation tax receipts were assumed to decline by €2 billion or approximately 20 per cent of corporation tax revenue at that time. Since then, corporation tax receipts have increased substantially and accordingly, the cost of implementation of the agreement is also likely to have increased significantly.
Estimating the potential impact of the OECD agreement represents a considerable and on-going challenge, not least due to the fact that the negotiations are still ongoing. Given this uncertainty, the original assumption was retained in the SPU projections, with a net loss of €2 billion from both pillars of the agreement incorporated from 2026 onwards.
In respect of the SARP, this measure was extended as part of Budget 2023 and is reflected in the SPU fiscal projections. The measure is scheduled to expire at end-2025. The SPU projections also incorporate revenue raised from the bank levy. This measure is due to expire at end-2024.
The mortgage interest tax relief was a one year temporary relief introduced as part of Budget 2024 and is incorporated in the SPU projections.
The cost of the rent tax credit introduced in Budget 2023 and the additional cost of the amendment to the measure in Budget 2024 are incorporated within the tax base as part of the SPU projections and are assumed to expire at end-2025.
If these measures were to be extended beyond their current expiration date, estimates would be subject to revision based on the latest available data at the time.
The Defective Concrete Products Levy was initially introduced as part of Budget 2023 and subsequently amended in Budget 2024 . As a permanent measure, the levy is considered to form part of the tax base and is incorporated in the SPU fiscal projections.
The costings of tax policy measures at the time of their introduction are available in the Tax Policy Changes booklet published as part of the Budget Day documentation. The Tax Policy Changes publications for Budgets 2023 and 2024 are available at the below links respectively.
www.gov.ie/en/publication/ccc22-budget-2023-taxation-measures/
www.gov.ie/en/publication/de3d4-budget-2024-taxation-measures/
My Department will publish its Annual Report on Tax Expenditures, providing further detail on tax expenditures in the Irish tax system, alongside Budget 2025 .
332. Deputy Niall Collins asked the Minister for Finance further to Parliamentary Question No. 245 of 14 May 2024, if he will address issues which have arisen (details supplied); and if he will make a statement on the matter. [31900/24]
Amharc ar fhreagraI cannot comment on matters of rural transport but I can discuss the Disabled Drivers and Disabled Scheme for which my Department has governance and oversight.
The Deputy should note that my Department and I share concerns that the Disabled Drivers and Disabled Passengers Scheme or 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.
However, this is very much a matter for Government as whilst my Department has oversight of the DDS, I do not have responsibility for disability policy.
As the Deputy is aware the National Disability & Inclusion Strategy or NDIS Transport Working Group recommended that the DDS be replaced with a modern, fit-for-purpose vehicular adaptation scheme. This is in line with the general view that we need to move away from a medical criteria-based approach to a needs-based approach.
The next National Disability Strategy is currently under development, which will be a whole-of-government strategy that will advance the implementation of the United Nations Convention on the Rights of Persons with Disabilities. Transport has been identified as a strong point of focus and is intended to be a pillar therein.
Under the aegis of the Department of Taoiseach officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report including how the DDS can be replaced.
The Department of Finance submitted a note to the group with my predecessor's approval in mid-January 2024. This note outlines a proposal for a replacement scheme for the DDS which would be a needs-based, grant-led approach for necessary vehicle adaptations. Further consideration is being given to this matter through the establishment of sub-group of the Department of Taoiseach working group. This sub-group met in July 2024 and is expected to report in the Autumn.
334. Deputy Pearse Doherty asked the Minister for Finance the estimated first-year and full-year cost of removing residential stamp duty with respect to the purchase of residential property by first-time buyers for property purchase values of €500,000 or less, €450,000 or less and €400,000 or less, respectively. [31940/24]
Amharc ar fhreagraI am advised by Revenue that, based on stamp duty returns for 2023, the latest year for which fully analysed data is available, the estimated cost of abolishing stamp duty for first-time buyers of residential properties valued at €500,000 or less, €450,000 or less and €400,000 or less, respectively are provided in the table below.
This estimate is arrived at by taking the stamp duty returns for residential property purchases made by persons identifying themselves as first-time buyers, where the consideration was less than the suggested threshold, and taking the associated tax liability as the potential cost of exempting them from the duty.
|
Property Value |
Estimated Cost €m |
|
€500,000 or less |
43.0 |
|
€450,000 or less |
39.5 |
|
€400,000 or less |
33.5 |
335. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue in the years 2025, 2026, 2027, 2028 and 2029, respectively, by increasing the rate of commercial stamp duty from 7.5% to 12.5%, excluding agricultural property and land. [31945/24]
Amharc ar fhreagra336. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue in the years 2025, 2026, 2027, 2028 and 2029, respectively, by increasing the rate of commercial stamp duty from 7.5% to 10 %, excluding agricultural property and land. [31946/24]
Amharc ar fhreagraI propose to take Questions Nos. 335 and 336 together.
I am advised by Revenue that the estimated revenue from increasing the rate of commercial Stamp Duty from 7.5% to 10%, and from 7.5% to 12.5%, excluding the rate charged on transfers of agricultural land, is provided in the table below.
There is no information available on the Stamp Duty returns made to Revenue which would enable it to exclude transfers of agricultural property (other than agricultural land) in the preparation of these estimates.
The estimates do not take account of behavioural changes that may arise from changing the rates. I am further advised that Revenue do not provide estimates for later years due to the uncertainty surrounding such estimates.
|
Proposed Change |
Estimated yield €m |
|
Increase to 10% |
128.5 |
|
Increase to 12.5% |
257 |
It is important to be aware that the estimates of tax policy changes for Stamp Duty are provided on the basis of the current Budget year (2024) rather than the next Budget year (2025). The Budget year costings for 2025 are prepared for the party costings service and are used to feed into costings requested by the Department of Finance in advance of the Budget. The Revenue Pre-Budget Ready Reckoner (published end August) will also be on the basis of Budget year 2025.
337. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised from restricting the employers’ PRSI exemption scheme for share-based remuneration to micro, small and medium-sized enterprises in 2025, 2026, 2027, 2028 and 2029, respectively. [31955/24]
Amharc ar fhreagraI am advised by Revenue that the additional revenue associated with the removal of the existing employer’s PRSI exemption, that may apply to share-based remuneration schemes operated by employers, is now estimated to be in the region of €310 million for all employers. This latest estimate is based on 2023 data, being the most recent year in respect of which Revenue has full data for.Whilst a complete breakdown of this €310 million figure by employer size is not available, a breakdown by employer size for share based remuneration that has been reported through payroll is available. The total PRSI exemption in respect of this cohort is estimated to be €237 million, of which approximately €198 million relates to large enterprises and €39 million relates to micro, small and medium enterprises.With regards the revenue that would be raised from restricting the employers’ PRSI exemption for tax years 2025 to 2029 inclusive, as it is not possible to predict the uptake on share-based remuneration schemes, an estimation cannot be provided.
338. Deputy Pearse Doherty asked the Minister for Finance the estimated annual revenue forgone as a result of stamp duty not being applied to share buybacks not effected by means of a stock transfer form; and if he will make a statement on the matter. [31960/24]
Amharc ar fhreagra339. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue raised in each of the years 2025, 2026, 2027, 2028 and 2029 by applying a 1% rate of stamp duty on all forms of share buybacks, including those effected by means other than a stock transfer form. [31961/24]
Amharc ar fhreagraI propose to take Questions Nos. 338 and 339 together.
With respect to the Deputy’s first question, I am advised by Revenue that the Stamp Duty treatment of share buybacks depends on the form in which the shares are held and the method by which the buybacks are effected.
For shares held in certificated (i.e., paper) form, the shares may be bought back in two ways. The first is by means of a standard stock transfer form. The second is where the shareholder and the company enter into a contract or share purchase agreement for the sale of the shares, following which the shareholder hands over the share certificates to the company.
For shares held in uncertificated/dematerialised (i.e., electronic form), the shares may be bought back via an electronic settlement system. Euroclear Bank operates the settlement system for trading in Irish shares on Euronext Dublin.
Revenue has always maintained that shares bought back by means of a stock transfer form are chargeable to Stamp Duty.
Where a company enters into a contract or share purchase agreement, Revenue accepts that there is no Stamp Duty chargeable on the transaction by virtue of section 31(1)(b) of the Stamp Duties Consolidation Act 1999. This section provides for Stamp Duty to be charged in respect of any contract or agreement for the sale of any estate or interest in any property as if it were an actual conveyance on sale of the estate, interest or property. However, it specifically excludes from its scope the sale of certain property, including shares.
For shares bought back via an electronic settlement system, it has been a long-standing Revenue practice to confirm that Stamp Duty does not apply to such transactions.
I am advised that Revenue does not have comprehensive data on share buybacks as there is no statutory requirement in place for such data to be provided to them by way of a Stamp Duty return.
However, based on information provided to Revenue in relation to the Stamp Duty treatment of such transactions and on publicly available information, Revenue tentatively estimates that the annual revenue foregone as a result of share buybacks not being effected by means of a stock transfer form is as follows:
2019: €8.07million
2020: €1.75 million
2021: €11.27million
2022: €19.07 million
2023: €39.1 million
2024 YTD: €32.43 million
It is important to note that, as there is no requirement to provide Revenue with specific data on share buyback transactions, the estimates provided by Revenue are provisional in nature and subject to change.
The wide variation in the estimated annual revenue forgone is because share buyback programmes are implemented on an irregular basis by a limited number of companies.
With respect to the Deputy’s second question, I am advised by Revenue that as details of share buybacks are not required to be reported on a Stamp Duty Return, there is no available data on which to base an accurate estimate of the potential revenue raised by applying a 1% rate of Stamp Duty on all forms of share buybacks for the years he has requested. I am further advised that Revenue cannot provide estimates for later years due to the uncertainty surrounding such estimates, particularly given the discretionary nature with which share buybacks are carried out.
It should be noted that estimates in respect of changes to the rate of Stamp Duty applied to shares more generally is included in Revenue’s Ready Reckoner, which is published on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf. An update of the Ready Reckoner is due to issue in the coming weeks.
340. Deputy Paul Murphy asked the Minister for Finance if a rejected application transfer and exemption will be re-examined for a person (details supplied). [31970/24]
Amharc ar fhreagraAs the Deputy is aware all motor vehicles in the State must be registered within 30 days of their date of entry into the State at which point Vehicle Registration Tax (VRT) is charged. In certain cases, a full or partial exemption from VRT may apply, if the person registering the vehicle is transferring their residence to the State.In order to qualify for Transfer of Residence (TOR) relief, the person registering the vehicle must have had normal residence abroad and is now taking up normal residence in the State. In addition, the vehicle is required to have been in the person’s possession for a minimum of six months before the transfer of residence to the State and brought into the State within 12 months of transferring residence. I am advised by Revenue that in the case of the application concerned, the person has not provided sufficient evidence to support having usage of the vehicle for six months outside of the State, prior to taking up normal residence in the State. In the event that the person concerned has additional information to support their application they can contact Revenue via MyEnquiries or by contacting Revenue’s VRT Helpline on 01-7383619. Further guidance in relation to VRT exemptions and reliefs, including the exemption from VRT on the basis of a ‘Transfer of Residence’ (TOR), can be found on the Revenue website at www.revenue.ie/en/vrt/reliefs-and-exemptions/index.aspx. A person has the right to appeal Revenue’s decision to refuse a Transfer of Residence (TOR) exemption, further details on that process can be found at www.revenue.ie/en/vrt/appeals/index.aspx.
