Written Answers Nos. 313-332
313. Deputy Michael Lowry asked the Minister for Finance if he will introduce legislative changes to exempt actively farmed land from the residential zoned land tax, given the concerns that the annual 3% tax on market value could force the sale of intergenerational land; the steps that will be taken to address the rejection of exemption submissions by local authorities; and if he will make a statement on the matter. [35656/24]
Amharc ar fhreagraResidential Zoned Land Tax (RZLT) applies to land zoned for residential development, which also has the necessary services in place for the development of housing. The aim of this tax is to increase the supply of land for building. It will be charged at 3% of the market value of the land every year. It is important to note that landowners will not have to pay the RZLT if they own a dwelling which appears on the local authorities’ RZLT Maps, but which is also subject to the Local Property Tax (LPT).
As part of Budget 2024, a decision was made to defer the initial liability date of the residential zoned land tax by one year, from February 2024 to February 2025. This allowed for another mapping cycle to be completed and it afforded landowners and third parties a further opportunity engage with local authorities. The RZLT liability date is 1 February 2025 with first returns and payments due in May 2025.
My officials are currently engaging with the Office of the Attorney General, the Department of Housing, Local Government and Heritage and the Department of Agriculture, Food and the Marine on RZLT and I will consider policy options on this measure in advance of Budget 2025.
314. Deputy Jim O'Callaghan asked the Minister for Finance if he will report on the implementation of the programme for Government commitments under the remit of his Department. [34008/24]
Amharc ar fhreagraMy Department’s Statement of Strategy reflects the national priorities outlined in the Programme for Government (PfG). In this regard, the Department’s mission is to lead in the achievement of the Government’s economic, fiscal and financial policy goals. In delivering this mission, the Department’s current Statement of Strategy 2023-2025 focuses on the role the Department plays in delivering the following priorities:
• Balanced, sustainable economic growth,
• Sound public finances,
• Well regulated, sustainable banking and financial sector,
• International leadership in economic, fiscal and financial decision making, and
• Promoting environmentally sustainable economic progress
Since the formation of the Government in June 2020, the Department of Finance’s policy focus has been on supporting households and businesses in the aftermath of significant economic shocks including the Covid-19 pandemic, the Russian invasion of Ukraine and the associated cost of living shock. Implementation of PfG commitments by my Department includes the following:
Covid-19 related support schemes: A range of unprecedented proactive and pro-cyclical interventions to support the economy during the pandemic, all of which were made possible by the prudent management of the public finances in the pre-Covid years. In continuing to work with the banking industry and nonbank lenders to support customers during and after the Covid-19 crisis, the Strategic Banking Corporation of Ireland (SBCI) launched the €1.2bn Ukraine Credit Guarantee Scheme in March 2023. The €500 million Growth and Sustainability Loan Scheme was launched in September 2023.
Budget 2021, 2022, 2023 and 2024: The unforeseen challenges of Ukraine, the ongoing recovery from the pandemic and the continuing fallout from Brexit were addressed from a position of strength with record levels of employment and a budget surplus. The Tax Debt Warehousing Scheme, as introduced in 2020, allowed certain debts, mainly VAT, PAYE (Employer) debts and certain self-assessed income tax liabilities, incurred during the period of restricted trading caused by Covid-19 to be ‘parked’ on an interest free basis. The Temporary Business Energy Support Scheme (TBESS) was introduced in Finance Act 2022 as part of a suite of Government measures to counteract the impact on businesses of increased energy costs which arose as a result of the invasion of Ukraine by Russia.
Cost of living challenges: By responding swiftly and decisively to the cost of living challenges, Government supports have helped to mitigate the impact of inflationary pressures on both businesses and households. Budget 2023 was a ‘Cost of Living Budget’ focused on mitigating inflationary pressures. Budget 2024 provided €2.7 billion in once-off cost of living measures for 2024, which built upon some €12 billion in direct relief made available to households and businesses since the beginning of 2022.
Retail Banking Review: The review of the Retail Banking sector was completed in 2022 and 2023 saw the move to work on implementation of its 34 recommendations, which are now Government policy. A key issue identified by the Retail Banking Review was access to cash, both the ability to withdraw and deposit cash, and a number of recommendations address this. There is a dedicated team in place working on this issue and the Finance (Provision of Access to Cash Infrastructure) Bill 2024 has been published.
Another related issue was a recommendation for the Department to lead on the development of a National Payments Strategy (NPS) that will take account of the changing landscape and determine how best to adapt to it. The NPS will set out a roadmap for the future evolution of the entire payments system, and will also take account of the EU legislative landscape, including existing proposals on instant payments, payment services, legal tender and the Digital Euro. One of the aims of the NPS is to ensure that the Irish payment system is resilient and it can be trusted both by its retail participants and consumers alike. The final strategy will be published in late summer 2024.
Taxation: The independent Commission on Taxation and Welfare (COTW) was established in 2021 and was tasked by Government to independently consider how best the taxation and welfare systems can support economic activity and promote increased employment and prosperity while ensuring that there are sufficient resources available to meet the costs of the public services and supports in the medium and longer term. “Foundations for the Future”, the Report of the COTW, was published on 14 September 2022. The report contains over 500 pages and 116 recommendations regarding the future of our taxation and welfare systems.
International Tax Reform: The agreement reached by Ireland with approximately 140 other jurisdictions through the OECD Inclusive Framework in 2021 represents an important step towards resolving the issues brought about by the digitalisation of the economy and is intended to provide certainty for multinational enterprises whose business models are so important for the Irish economy. There are two pillars to this agreement. The EU Minimum Tax Directive was implemented through the Finance (No.2) Bill 2023, making good on Ireland’s commitment to deliver Pillar Two of the OECD agreement. Ireland welcomed the publication of the Multilateral Convention (MLC) by the OECD, demonstrating the substantial progress made on all aspects of Pillar One. I look forward to that work being finalised shortly and the opening of the MLC for signature in due course.
Credit Unions: A review of the policy framework within which Credit Unions operate has been completed. The review included extensive stakeholder engagement and the Credit Union Amendment Act 2023, which was signed into law in December 2023, and implements the proposals emanating from the review. The Act represents a very significant piece of legislation that will have far-reaching positive implications for the credit union sector in the years to come.
State’s Shareholding in the Banking Sector: The Department of Finance manages the State’s remaining investments in the banking sector. In relation to the shareholdings in the three domestic banks, the State exited its shareholding in Bank of Ireland during 2022 recovering almost €6.7bn in cash from its €4.7bn investment in and support for the bank. In the case of AIB, share sales resumed at the beginning of 2022 for the first time since the IPO in 2017 and since then the State’s shareholding in AIB has reduced from c. 71.1% to c. 25.5% currently, a total of c. €16.1bn has been recovered from the State’s investment in AIB so far. The shareholding in PTSB has reduced from 75% to 57.4% currently.
NAMA: The National Asset Management Agency (NAMA) transferred €350 million to the Exchequer in December 2023. This brings the Agency transfers to the State to a cumulative total of €4.25 billion; €3.85 billion cash from its lifetime surplus and over €400 million in corporation tax payments.
Housing: Home Building Finance Ireland (HBFI) was established to increase the supply of new homes for owner-occupiers, renters and social housing by providing funding on commercial terms to house builders for commercially viable developments throughout Ireland. It has grown total loan approvals to €1.66bn at the end of December 2023, an increase of 33% on the €1.25bn at the end of 2022. HBFI has exceeded the 5-year target set by the Government at its inception in 2019, approving funding for 8,495 homes over that period versus a target of 7,500. A second strategic review of HBFI was published in May 2023 and found that HBFI has had a positive impact on access to development finance.
The Help to Buy scheme was extended in Finance (No.2) Act 2023 for a further year to the end of 2025. In addition, an amendment was made to the scheme in 2023 to enhance the interaction of the scheme with the Local Authority Affordable Purchase (LAAP) Scheme. This amendment will enable the use of the affordable dwelling contribution received through the LAAP scheme for the purposes of calculating the 70 per cent loan-to value requirement, thereby facilitating access to a greater number of LAAP purchasers to the Help to Buy scheme.
Climate: My Department is committed to contributing to the Government’s Climate agenda. A dedicated Climate Unit was established in 2021. The unit manages the Department’s overall engagement on climate at national and international level, including inputting to the development of the Climate Action Plan.
Insurance Reform: A key focus has been the implementation of the pro-consumer Action Plan for Insurance Reform, which set out actions across several departmental policy areas. The vast majority of the actions are now complete, including all 13 principle actions, and all those assigned to the Department of Finance.
Developing the fintech sector: ‘Ireland for Finance’ is the strategy for the development of Ireland’s international financial services sector to 2025. At the end of 2023, IDA Ireland and Enterprise Ireland estimated that direct employment in the sector – the primary tool by which the strategy measures the benefit of the international financial services sector to Ireland – stood at around 57,600. This is an increase of approximately 2,000 in the estimated numbers employed compared with at the end of 2022.
Legislative agenda: In advancing the Government’s legislative agenda, and while not a fully comprehensive list, legislation enacted since 2020 includes the following:
- Future Ireland Fund and Infrastructure, Climate and Nature Fund Act 2024
- Finance (State Guarantees, International Financial Institution Funds and Miscellaneous Provisions) Act 2024
- Central Bank (Individual Accountability Framework) Act 2023
- Credit Union (Amendment) Act 2023
- Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022
- Insurance (Miscellaneous Provisions) Act 2022
- Finance (Local Property Tax) (Amendment) Act 2021
- Finance (European Stability Mechanism and Single Resolution Fund) Act 2021
- Financial Provisions (Covid-19) Act 2020
- Investment Limited Partnerships (Amendment) Act 2020
Additional information on my Department’s achievements each year is available in its annual reports which are available on the gov.ie website. Further detail on the strategic framework that underpins the policy achievements is available in the Department of Finance Statement of Strategy 2023-2025 on the gov.ie site. In this regard, it should be noted that, following my recent appointment as Minister for Finance, a new Strategy Statement is being developed.
315. Deputy Michael McGrath asked the Minister for Finance if he will examine a matter raised in correspondence by a person (details supplied) about a specific taxation issue; and if he will make a statement on the matter. [34068/24]
Amharc ar fhreagraI am advised by the Revenue Commissioners that if an individual wishes to claim a refund of Capital Acquisitions Tax, they are required to file an amended Capital Acquisitions Tax (“CAT”) return Form IT38.
To qualify for a refund of CAT, an individual must file the amended CAT IT38 return within the period of 4 years commencing on 31 December in the year that the tax was due. This in in accordance with section 57(3) of the Capital Acquisitions Tax Act 2003, as amended.
The individual in question filed their original CAT IT38 return on 24 January 2019 with payment of the tax due by 31 October 2019. Any claim for a refund of CAT required the submission of an amended CAT IT38 return by 31 December 2023.
Revenue is bound by the legislation, as the individual has not submitted an amended return within the legislatively required period, a refund of CAT cannot be processed. If the person concerned has any questions or require any further information, they can contact Revenue's National CAT Helpline on 01-738 3673.
316. Deputy Jennifer Murnane O'Connor asked the Minister for Finance to consider a change in capital gains tax (details supplied), in the upcoming Budget; and if he will make a statement on the matter. [34086/24]
Amharc ar fhreagraI assume the Deputy's question relates to Capital Acquisitions Tax (CAT) and the thresholds provided for within CAT as outlined in the details supplied.
CAT is a tax which applies to both gifts and inheritances. For CAT purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise.
The Group A threshold is currently set at €335,000 and applies where the beneficiary is a child, including adopted children, stepchildren and certain foster children, of the disponer.
The Group B threshold is currently set at €32,500 and applies where the beneficiary is a brother, sister, nephew, niece or lineal ancestor or lineal descendant such as a grandchild of the disponer.
The Group C threshold is currently set at €16,250 and applies in all other cases.
While the thresholds were reduced during the economic downturn, the Government has made changes to the CAT thresholds in recent years. The thresholds have been increased to the extent allowable by the available resources. In Budget 2019, the Group A threshold which applies primarily to gifts and inheritances from parents to their children was increased from €310,000 to €320,000 and again to €335,000 in Budget 2020.
You should be aware that there would be a significant cost in making further substantial changes to the CAT thresholds. As with all areas of tax policy, CAT is reviewed as part of the annual budgetary and Finance Bill cycle.
317. Deputy Mairéad Farrell asked the Minister for Finance if the introduction of tax incentives for philanthropic activities is being considered as outlined in the national philanthropy policy; and if he will make a statement on the matter. [34104/24]
Amharc ar fhreagraAs the Deputy will be appreciate, it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.
318. Deputy Ged Nash asked the Minister for Finance the cost in each year since 2016 of the relief for increase in carbon tax on farm diesel, and the number of claimants in each year, in tabular form; to confirm that farmers can claim a double relief on this cost as it will already be deducted against profits for expenditure on farm diesel; if such a relief for carbon tax applies to any other sector; and if he will make a statement on the matter. [34123/24]
Amharc ar fhreagraSection 664A of the Taxes Consolidation Act 1997 provides for relief in the form of a deduction for the expenditure on the carbon tax incurred on the purchase of farm diesel. The relief is available to those persons carrying on a trade of farming (an individual or a company) and is not available in respect of expenditure on carbon tax on fuels other than farm diesel. Finance Act 2012 provided for the “double deduction” procedure.
In computing profits of a farming trade, a farmer may claim an income tax or corporation tax deduction for farm diesel that is equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at the rate of €41.30 per 1,000 litres (this was the rate applicable from 1 May 2010 when carbon tax was introduced and applied until 30 April 2012). The farmer is also entitled to claim a deduction for expenditure on the farm diesel (including the carbon tax charged in respect of the diesel).
By way of example, for the accounting period ended 31 December 2024, a farmer carrying on a trade of farming is entitled to a deduction for the cost of 10,000 litres of farm diesel used in the course of the trade. The farm diesel cost €7,500 and this included carbon tax of €1,518.10 (based on the rate of €151.81 per 1,000 litres). In accordance with the relief for increase in carbon tax on farm diesel, the farmer is entitled to a deduction in the amount €1,105.10, which is the difference between the carbon tax included in the cost of the farm diesel (i.e. €1,518.10) and the carbon tax that would have been included in the cost if the rate had remained at €41.30 per 1,000 litres (i.e. €413). In computing profits of the farming trade, the farmer is also entitled to a deduction in the amount €7,500 for the cost of the farm diesel.
The first year in which data is available in respect of the relief is 2020; I am advised by Revenue that data for the 2023 tax year is not yet available. The cost of the relief claimed and the number of claimants per year is as follows:
|
- |
2022 |
2021 |
2020 |
|
Number of taxpayer units |
5,600 |
5,800 |
5,900 |
|
Tax cost |
€0.3M |
€0.2M |
€0.1M |
Further information on the relief is available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-23/23-01-36.pdf
In relation to the final part of the Deputy's question, a relief for carbon tax of this type does not apply to non-farm sectors.
319. Deputy Frankie Feighan asked the Minister for Finance the supports available to people with disabilities who purchase a motor car and qualify for a primary medical certificate; if there is support under the motorised transport grant for the purchase of a motor vehicle (including a designated passenger); if there are assistance measures around the purchase of fuel and motor tax for applicants (as in previous measures); and if he will make a statement on the matter. [34135/24]
Amharc ar fhreagraThe Deputy should note at the outset that the Department of Finance has oversight of the Disabled Drivers and Disabled Passengers Scheme (DDS), however the Motorised Transport Grant which has been closed to new applicants since 2013 comes under the aegis of my colleague the Minister for Health.
The DDS is open to severely and permanently disabled persons as defined, as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Principal Medical Officer (PMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant. To qualify for a Primary Medical Certificate an applicant must be permanently and severely disabled by satisfying at least one of six medical criteria which are set out in the Finance Act, 2020.
In relation to the supports available under the DDS, the scheme provides relief from VRT and VAT on an adapted car, as well as an exemption from motor tax and an annual fuel grant.
The allowable limits for tax reliefs differ, for a disabled driver or a disabled passenger as defined. Limits also differ by the types of adaptations. The owners of the DDS vehicle receive DDS tax reliefs, motor tax exemption and fuel grant payments. An owner may be a disabled driver or a disabled passenger and thus Primary Medical Certificate holders (PMCH); a family member transporting a PMCH; or an organisation transporting PMCHs. Limits for organisations differ according to the number of PMCHs they are transporting.
97% of DDS vehicles qualify for reliefs under the ‘ordinarily adapted’ category. This category provides up to €16,000 (for passengers) and €10,000 (for drivers) in reliefs for a DDS vehicle, as well as the motor tax exemption and fuel grant payment. The vehicle must be retained for 2 years.
The three other adaptation categories and reliefs provided are listed below:
* Specific Adaptations, for Drivers; €16,000 limit, retention period 3 years
* Extensive Adaptations, for Drivers, Passengers and Organisations transporting fewer than 5 PMCHs; €22,000 limit; retention period 6 years
* Wheelchair-specific adaptations, limits of €48,000 for Drivers and €32,000 for Passengers; retention period 6 years
* Organisations transporting more than 5 PMCHs have no limits on available reliefs.
Vehicles may be new, imported (not previously registered in the State) or used (previously registered in the State). Where applicable VRT exemption or repayment is first provided, then VAT repayment on adaptation and purchase costs, up to the allowable limit.
Any vehicle, including electric vehicles, can avail of DDS reliefs subject to meeting qualifying conditions in respect of the individual and of the vehicle.
DDS Scheme recipients with a petrol or diesel vehicle may claim payment of a fuel grant. The fuel grant covers the excise tax elements of petrol, diesel and liquefied petroleum gas (LPG).
As electricity supplied for household use is not subject to excise tax, there is no provision under the DDS to cover electricity used to recharge electric vehicles.
320. Deputy Neasa Hourigan asked the Minister for Finance the reason there was not a single gaming licence issued for the city of Dublin, as of Revenue's register of gaming licences dated 3 July 2024, in spite of the prevalence of gaming premises in the city; and if he will make a statement on the matter. [34162/24]
Amharc ar fhreagraI am advised by Revenue that under current legislation, the Gaming and Lotteries Act, 1956 (as amended), an operator of gaming machines must apply annually to the District Court for a certificate in respect of a gaming licence. This is required for each premises where it is intended to make gaming machines available for play. Where the District Court grants this certificate, the operator must then apply to Revenue for a Gaming Licence for each premises concerned.
Local government resolutions (under Section 12/13 of the Gaming and Lotteries Act) prohibit the operation of gaming machines in Dublin city and as such no gaming licence can be issued to an operator in Dublin city.
Gaming operators are not entitled to operate without a licence in Ireland. Compliance of gaming operators is divided between An Garda Síochána and Revenue under current legislation. Compliance in respect of failure to hold a Gaming Licence for any place where gaming machines are available for play is a matter for An Garda Síochána. Revenue’s enforcement of the law in relation to gaming licensing is based on detecting machines that are unlicensed and detecting gaming machines that have been licensed improperly as amusement machines.
Revenue adopts a risk-based approach to all interventions and continues to work closely with the Department of Justice on the upcoming Gambling Regulation Bill, which will consolidate and modernise gambling legislation, including legislation relating to the gaming sector.
321. Deputy Damien English asked the Minister for Finance his plans to review the local property tax scheme; if such a review would allow for public consultation; and if he will make a statement on the matter. [34197/24]
Amharc ar fhreagraThe Local Property Tax (LPT) was introduced in 2013 to provide a stable and sustainable source of funding for local authorities. For the valuation period 2022-2025, the tax is payable annually on the self-assessed market value of residential properties as of 1 November 2021.
The Programme for Government 2020 – “Our Shared Future” – included a commitment to bring forward legislation in relation to LPT on the basis of fairness, such that most homeowners would not face an increase in their LPT liability. A commitment was also made to bring new homes, which had been excluded from the LPT, into the LPT system.
The Finance (Local Property Tax) (Amendment) Act 2021 was enacted in July 2021 and provided for a number of changes to LPT, including a revised method for calculating liabilities. This allowed Revenue to make the essential technical and administrative preparations for the valuation of residential properties and revised charging structure in advance of the valuation date of 1 November 2021.
The Act provides for the property valuations to be reviewed every four years, and facilitates the regular addition of new properties into the LPT. All new properties built between valuation dates are retrospectively valued as if they had existed on the preceding valuation date and become liable on the next liability date (1 November).
The next valuation period is set to commence in 2026 for a duration of four years, with reference to the self-assessed market value of residential properties as of 1 November 2025. The LPT will be reviewed in advance of that date. The format of that review has yet to be decided.
322. Deputy Fergus O'Dowd asked the Minister for Finance to review the concerns raised in correspondence (details supplied) relating to depreciation as a factor in BIK calculations; and if he will make a statement on the matter. [34206/24]
Amharc ar fhreagraAs 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. However some general background information is provided below.
Section 121 of the Taxes Consolidation Act (“TCA ”) 1997 provides that where a car is made available for the private use of an employee then the employee is chargeable to benefit in kind tax (“BIK”). Where such a benefit is provided to an employee by his or her employer, the employer is required to include that notional payment as part of the employee’s emoluments and to deduct tax via the PAYE system accordingly.
At present, the amount taxable as a BIK is determined with reference to the cars original market value (“OMV”), the annual business kilometres driven, and the CO2 emissions of the vehicle in question.
Electric cars that fall into ‘Category A’ vehicles, i.e., vehicles with CO2 emissions between 0g/km and 59g/km inclusive, benefit from a preferential rate of BIK, ranging from 9% – 22.5% depending on business mileage.
In addition electric cars, are further incentivised under section 121(4A)(aa) TCA 1997. This provides that the cash equivalent of an electric vehicle made available for an employee’s private use during the years 2024 to 2027, is calculated based on the OMV of the vehicle reduced by:
• €35,000 in respect of vehicles made available in the 2024 and 2025 years of assessment,
• €20,000 in respect of vehicles made available in the 2026 year of assessment, and
• €10,000 in respect of vehicles made available in the 2027 year of assessment.
This tapering relief is in addition to a €10,000 temporary reduction to OMV that applies to all employer provided cars, with CO2 emissions of 179g/km or less, for the 2023 and 2024 years of assessment. Therefore, the total reduction in OMV for an electric vehicle for 2024 is €45,000 (i.e., €35,000 plus the €10,000 temporary reduction that applies for 2024), on the basis that the CO2 emissions do not exceed 179g/km.
The reductions above apply irrespective of the actual OMV of the vehicle or when the vehicle was first provided to the employee. If the reduction reduces the OMV to nil, a BIK charge will not arise. Any portion of OMV remaining, after the reduction is applied, is chargeable to BIK at the prescribed rates.
Further information in regard to the tax treatment applicable where an employer makes a vehicle available to an employee for his or her private use can be found at the links below:
• Revenue website: www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-company-cars/index.aspx
• Tax and Duty Manual Part 05-01-01b: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01b.pdf
323. Deputy Ruairí Ó Murchú asked the Minister for Finance if he intends to make any changes to the current benefit-in-kind taxation situation for company cars; and if he will make a statement on the matter. [34257/24]
Amharc ar fhreagraFrom 1 January 2023, new rates of benefit-in-kind (BIK) were applied to the provision of an employer provided car, which take into account the CO2 emissions of the car. The amount taxable as a BIK remains determined by the car's original market value (OMV) and the annual business kilometres driven, with new CO2 emissions bands used to determine whether a standard, discounted, or surcharged rate applies.
This new structure with CO2-based discounts and surcharges is designed to incentivise employers to provide employees with low-emission cars. Electric cars that fall into ‘Category A’ vehicles, i.e., vehicles with CO2 emissions between 0g/km and 59g/km inclusive benefit from a preferential rate of BIK, ranging from 9% - 22.5% depending on business mileage.
Due to the impact the new emissions based BIK system has on certain petrol and diesel cars, Finance Act 2023 provided as a temporary measure a €10,000 reduction to be applied to the OMV of cars in Category A, B, C and D for 2023 in order to reduce the amount of BIK payable. This was not applicable to cars in Category E - the highest emission category. This treatment also applied to vans and electric vehicles (EVs). This meant that for the purposes of calculating the BIK liability on an employer-provided car, employers could reduce the OMV by €10,000. Additionally, the lower limit in the highest mileage band was amended by way of a 4,000km reduction, so that the highest mileage band was entered into at 48,001km. Finance (No.2) Act 2023 extended these measures to 31 December 2024.
For EVs, the OMV deduction of €10,000 is in addition to the existing relief of €35,000 that is currently available for such vehicles, meaning that the total relief for EVs in 2024 is €45,000. Finance (No.2) Act 2023 also extended the existing BIK tapering regime that is available for EVs to 2027.
In relation to whether any changes to the current BIK taxation situation for company cars will be considered, the Deputy will be aware that 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.
324. Deputy Ged Nash asked the Minister for Finance his plans, if any, to maintain the current relief of €10,000 on the original market value of eligible cars for the purposes of calculating benefit-in-kind liability in Budget 2025; and if he will make a statement on the matter. [34262/24]
Amharc ar fhreagraAs 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.
325. Deputy Sean Sherlock asked the Minister for Finance the engagement he had on the recent stock market crisis; and if any engagement is being held with his officials on the use of artificial intelligence in the Irish stock exchange. [34264/24]
Amharc ar fhreagraAs the Deputy will be aware, while I have no specific role regarding the performance of the Irish, or international, stock markets or the means (including involving the use of artificial intelligence) by which trading takes place on stock markets. That said, I am mindful of the recent stock price movements during the early August trading period and the various market sentiments that have been expressed regarding these developments and potential impacts on the wider macroeconomic situation.
As for the use of artificial intelligence (AI) in the Irish Stock Exchange, the Deputy will be aware that the market operator of the Exchange, Euronext Dublin, is regulated by the Central Bank of Ireland. The regulatory framework for stock exchanges and for trading in financial instruments is EU based, with the Markets in Financial Instruments Directive (or MiFID) governing the authorisation and operation of stock exchanges and investment firms.
I am informed by my officials and the Central Bank of Ireland that the European Securities and Markets Authority (ESMA) has recently issued a statement that detailed that it expected all investment firms employing the use of AI to comply to MiFID requirements when providing services to retail clients. This statement clarifies that ESMA and national competent authorities (NCAs) will keep monitoring the evolution of AI in investment services and of the relevant EU legal framework on AI to determine if further action is needed in this area.
I am further informed by the Central Bank of Ireland that it is developing policy work and supervisory expectations related to the use of AI in financial services, including preparing for the implementation of the EU’s Artificial Intelligence Act.
Finally, it may also interest the Deputy that both my Department and the Department of Enterprise, Trade and Employment published some work that officials have done regarding AI more generally and the relevant document can be found on my Department's website.
326. Deputy Ged Nash asked the Minister for Finance if he has any plans to review the tax treatment of redundancy payments; and if he will make a statement on the matter. [34324/24]
Amharc ar fhreagraThe matter of whether a payment made to an individual is a redundancy or termination payment, and a statutory or ex-gratia element of same, depends on the specific circumstances of each individual case and may sometimes give rise to tax implications.
The Redundancy Payment Acts 1967 – 2014 impose a statutory obligation on employers to recompense employees dismissed for reasons of redundancy, laid off or kept on part time for a minimum period. This includes statutory redundancy, which is calculated on the basis of two weeks’ pay per year of service, plus one additional week, subject to a maximum weekly pay figure of €600. Section 203 Taxes Consolidation Act 1997 (TCA) exempts from income tax any payment arising in respect of statutory redundancy.
A taxpayer might also receive a lump sum payment as part of a redundancy. A liability to tax arises on the amount of the payment that exceeds either the:
• Basic exemption and increased exemption, if due, or
• Standard Capital Superannuation Benefit.
The Basic Exemption is €10,160 plus €765 for each complete year that a taxpayer worked for their employer. A termination payment will be tax free if it does not exceed the Basic Exemption.
A taxpayer may be entitled to an increase of €10,000 on the basic exemption if:
• they have not received an amount in excess of the basic exemption in the previous ten years, and,
• they are a not a member of an occupational pension scheme, or, if they are a member of an occupational pension scheme, but they revoke their entitlement to receive a tax-free lump sum from that scheme.
Standard Capital Superannuation Benefit (SCSB) is an additional relief taxpayers may be entitled to and is provided in Schedule 3 of of the TCA. SCSB is computed at 1/15th of a taxpayer’s average annual pay for the last 36 months in employment. This is then multiplied by the number of complete years of service with the employer. Any tax-free lump sum payments received, or which the taxpayer is entitled to receive, from their work pension, are subtracted from this benefit.
The basic exemption, increased exemption and the SCSB are subject to a lifetime limit of €200,000 and the individual may apply whichever of the three exemptions is most beneficial. This lifetime limit is only applicable to ex-gratia lump sum payments which might arise as part of a redundancy package and if any individual receives an amount exceeding the €200,000, the balance would be subject to income tax.
Section 201 TCA contains the provisions which provide for the basic exemption, increased exemption, and lifetime exemption limit of €200,000, in respect of additional ex-gratia payments which might arise as part of a redundancy.
If a person is in a marriage or civil partnership, his or her entitlement to exemption against a lump sum payment is calculated independently of their spouse or civil partner. This applies whether the person is taxed under joint assessment, separate assessment, or separate treatment.
The Department of Enterprise, Trade and Employment (DETE) provides guidance on an individual’s statutory redundancy entitlements, and further information on same can be found on their website at: enterprise.gov.ie/en/what-we-do/workplace-and-skills/redundancy-payments/
In addition, the Revenue website sets out further information on the tax treatment of lump sum termination payments in the hands of the employee, and that information is accessible at: www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/index.aspx
The current rules in relation to the tax treatment of redundancy and termination payments are well established. While it is the case that all tax measures are kept under review, I do not currently have any plans to make changes to the position set out in the TCA.
327. Deputy Paul Murphy asked the Minister for Finance to outline the audit process for Prize Bond draws. [34356/24]
Amharc ar fhreagraThe National Treasury Management Agency (NTMA) have informed me that the the Prize Bond draw is conducted using a computer based, software-driven, random number generation system. The operation of the Prize Bond scheme including the weekly draw is subject to regular internal and external audit.
In addition, a representative of the NTMA attends every draw to review adherence to the operational procedures set down for the conduct of the draw.
Insight Statistical Consulting, Dublin, acting as Independent consultants analyse the results of every draw to check for randomness and their reports are submitted to, and evaluated by, the NTMA on a regular basis.
328. Deputy Pearse Doherty asked the Minister for Finance the revenue in 2024, 2025, 2026 and 2027 provided in the tax revenue projections in table 10 of the stability programme update 2024 that was generated through the fiscal multiplier as a result of the €1.76 billion increase in gross voted current expenditure in 2024 compared to 2023, disaggregated by tax head; and if he will make a statement on the matter. [34392/24]
Amharc ar fhreagra329. Deputy Pearse Doherty asked the Minister for Finance the revenue in 2024, 2025, 2026 and 2027 provided in the tax revenue projections in table 10 of the stability programme update 2024 that was generated through the fiscal multiplier as a result of the €1.76 billion increase in gross voted current expenditure in 2024 compared to 2023, disaggregated by tax head; and if he will make a statement on the matter. [34393/24]
Amharc ar fhreagra330. Deputy Pearse Doherty asked the Minister for Finance the revenue in 2025, 2026 and 2027 provided in the tax revenue projections in table 10 of the stability programme update 2024 that was generated through the fiscal multiplier as a result of the €3,020 million increase in gross voted current expenditure in 2025 compared to 2024, disaggregated by tax head; and if he will make a statement on the matter. [34394/24]
Amharc ar fhreagra331. Deputy Pearse Doherty asked the Minister for Finance the revenue in 2026 and 2027 provided in the tax revenue projections in table 10 of the stability programme update 2024 that was generated through the fiscal multiplier as a result of the €4,310 million increase in gross voted current expenditure in 2026 compared to 2025, disaggregated by tax head; and if he will make a statement on the matter. [34395/24]
Amharc ar fhreagra332. Deputy Pearse Doherty asked the Minister for Finance the revenue in 2024, 2025, 2026 and 2027 provided in the tax revenue projections in table 10 of the stability programme update 2024 that was generated through the fiscal multiplier as a result of the €600 million increase in gross voted capital expenditure in 2024 compared to 2023, disaggregated by tax head; and if he will make a statement on the matter. [34396/24]
Amharc ar fhreagra333. Deputy Pearse Doherty asked the Minister for Finance the revenue in 2025, 2026 and 2027 provided in the tax revenue projections in table 10 of the stability programme update 2024 that was generated through the fiscal multiplier as a result of the €1,390 million increase in gross voted capital expenditure in 2025 compared to 2024, disaggregated by tax head; and if he will make a statement on the matter. [34397/24]
Amharc ar fhreagra334. Deputy Pearse Doherty asked the Minister for Finance the revenue in 2026 and 2027 provided in the tax revenue projections in table 10 of the stability programme update 2024 that was generated through the fiscal multiplier as a result of the €990 million increase in gross voted capital expenditure in 2026 compared to 2025, disaggregated by tax head; and if he will make a statement on the matter. [34398/24]
Amharc ar fhreagra335. Deputy Pearse Doherty asked the Minister for Finance the revenue raised in 2025, 2026, 2027, 2028 and 2029, through the fiscal multiplier of a €1 billion increase in capital expenditure in 2025, which remains in the capital expenditure ceiling in 2026, 2027, 2028 and 2029; and if he will make a statement on the matter. [34399/24]
Amharc ar fhreagra336. Deputy Pearse Doherty asked the Minister for Finance the revenue raised in 2025, 2026, 2027, 2028 and 2029, through the fiscal multiplier of a €1 billion increase in current expenditure in 2025, which remains in the capital expenditure ceiling in 2026, 2027, 2028 and 2029; and if he will make a statement on the matter. [34400/24]
Amharc ar fhreagraI propose to take Questions Nos. 328 to 336, inclusive, together.
My Department publishes two sets of forecasts each year in the spring and autumn as part of the Stability Programme Update and Budget, respectively. The macroeconomic forecasts incorporate the latest high frequency data, the impact of any revisions, changes in external demand, commodity prices, interest rates etc. as well as any changes in fiscal policy in the projections. The macroeconomic forecasts are then used a key input to prepare the fiscal projections.
When producing the forecasts, my Department assess the impact of these changes on a holistic basis i.e. assessing the combined impact of these factors rather than isolating the specific elements. As a result, while the second round effects of fiscal policy are incorporated in the projections, my Department does not publish estimates of the specific impact of changes in current and capital expenditure on tax revenue.
