Thursday, 6 Feb 2025

Illicit Trade

Ceisteanna (44, 57, 58)

Carol Nolan

Ceist:

44. Deputy Carol Nolan asked the Minister for Finance the steps being taken to combat the sale of illegal tobacco products in Ireland, particularly in light of the increased black-market activity seen in other EU states such as France and Spain; and if he will make a statement on the matter. [3673/25]

Amharc ar fhreagra

Carol Nolan

Ceist:

57. Deputy Carol Nolan asked the Minister for Finance the estimated tax revenue loss to the Irish Exchequer due to illicit tobacco trade; if this is expected to increase in the absence of clear EU tax policy guidance; and if he will make a statement on the matter. [3670/25]

Amharc ar fhreagra

Carol Nolan

Ceist:

58. Deputy Carol Nolan asked the Minister for Finance if his Department has assessed the impact of the EU’s delayed Tobacco Tax Directive on the Irish legal tobacco market; his views on whether uncertainty around taxation is increasing the prevalence of illicit tobacco trade in Ireland; and if he will make a statement on the matter. [3672/25]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions No. 44, 57 and 58 together.

Across the EU, the taxation of tobacco products is governed by the Tobacco Products Tax Directive (2011/64/EU) which sets out EU rules on the structure and rates of excise duty applied to manufactured tobacco. The Directive defines and classifies various manufactured tobacco products according to their characteristics and lays down the relevant minimum rates of excise duty to be applied by Member States for the different types of products. The Directive aims to ensure the proper functioning of the internal market and a high level of health protection, while also deterring tax fraud, tax evasion and illegal cross-border shopping.

Every four years, the European Commission is required to submit a report to the Council on the rates and the structure of excise duties, accompanied, where appropriate, by a proposal for the revision of the Directive. In 2021, the Commission and Council concluded that an upgrade of the EU regulatory framework was needed in order to tackle current and future challenges to the functioning of the internal market by harmonising definitions and tax treatment of novel products (such as liquids for e-cigarettes and heated tobacco products, including products that substitute for tobacco), and avoid legal uncertainty and regulatory disparities in the EU. They concluded that revision of the EU regulatory framework could also address the issue of tax-induced substitution across products and enable further measures to combat the illicit trade in tobacco to address tax control, revenue collection and health protection issues. A review of the Directive, including proposals for revision of EU minimum tax rates and the inclusion of new products was expected to be published by the Commission in December 2022.

However, such review and reform proposals is still awaited and, in light of this continuing delay, in December 2024 my Department, along with similar authorities in fifteen other Member States made a joint statement calling on the new Commission to make the modernisation of tobacco taxation legislation a key priority for its upcoming term, and to present its proposal for legislative action no later than spring 2025.

I believe that it is very important that the Tobacco Tax Directive is updated to reflect the changing nature of the market and the products on it. I also believe that minimum rates should be increased as part of any review as a means of reducing the high levels of non-Irish duty paid products being brought into the State legally through Duty Free.

As you are aware, Ireland is long committed to a policy of high taxation of tobacco to encourage people to quit smoking. Government health and social policy has focused on the further denormalisation of smoking generally as consumption of tobacco products remains one of the greatest avoidable and preventable health risks in our society. Similar considerations arise in respect of e-cigarette products and other alternative products which is why legislation providing for a tax on e-liquids used in e-cigarettes was included in Finance Act 2024 and that new tax is due to commence later this year.

For several years, Tobacco Products Tax (TPT) annual receipts remained fairly stable at over €1 billion per annum, with successive annual rate increases offsetting the impact of reductions in the volume of tobacco products released for consumption. However, in the last couple of years, the tax receipts have seen a noticeable decline. Forecasting yields has become increasingly difficult due to the prevalence of illicit tobacco products on the market, high levels of non-Irish duty paid products being brought into the State legally through Duty Free, market trends towards ‘big box’ cigarettes and the uptake of novel products, such as e-cigarettes. In this environment, Revenue have previously indicated that further increases in excise duties may not lead to stable or increased revenue.

Since 2009, Revenue and the HSE’s National Tobacco Control Office have jointly commissioned surveys among smokers to estimate the volume of non-Irish duty-paid cigarettes consumed in Ireland. Since 2013, this includes a separate survey on roll-your-own (RYO) tobacco. The results of these surveys along with the survey methodology are published on Revenue’s website. The most recent survey conducted by Ipsos MRBI indicates that 19% or 32.9 million cigarette packs consumed in Ireland in 2023 were illicit, based on the estimated total cigarette consumption of a pack of 20 cigarettes. This represents a notional loss to the Exchequer of approximately €422 million (Excise and VAT). This is viewed as a notional loss as it assumes that the illegal cigarettes consumed displaced the equivalent full tax paid quantity of cigarettes, which is unlikely to be the case.

A summary of the illegal cigarette survey for the last number of years is provided below.

Year	Illegal Packs (Millions)	Estimated Value of Loss (€m)
2023	32.9	422
2022	31.7	384
2021	22.7	264
2020*	NA	NA
2019	24.0	242

*No survey was carried out in 2020 due to Covid-19 restrictions

I am advised that Revenue uses a range of measures to tackle the sale of illicit cigarettes on the black market. At the core of these measures is identifying and targeting the smuggling of illicit tobacco products into the State, with a view to disrupting the supply chain, seizing the products and, where possible, prosecuting those involved. Revenue’s strategy involves developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources on a risk-focused basis.

The smuggling of tobacco products has a transnational and cross border dimension and in addition to Revenue’s ongoing cooperation with An Garda Síochána in this area, Revenue also works closely with its counterparts in other jurisdictions including colleagues in Northern Ireland through the Cross Border Joint Agency Task Force (JATF) and international bodies including OLAF (the EU’s anti-fraud agency), Europol and the World Customs Organisation. Additionally, it works with Northern Ireland agencies to address cross-border smuggling and dismantle organized crime networks involved in the illegal tobacco market. Revenue monitors trends in the illicit tobacco trade, both nationally and internationally, on an ongoing basis and adjusts its actions and redeploys its resources in response to new developments or methodologies employed by the criminal gangs involved in that trade.

I am pleased to say that Revenue has achieved considerable success in tackling the illicit tobacco trade. Each year Revenue publishes in its annual report the volume and market values of tobacco seizures. A summary of cigarette seizures is provided in the table below.

Year	Number of Seizures	Quantity of Cigarettes Seized (Millions)	Value of Seizures (€m)
2024	4,920	112.3	95.6
2023	5,164	69.5	55.7
2022	5,431	51.6	39.5
2021	4,889	60.7	43.5
2020	3,132	48.2	32.8
2019	3,263	13.4	8.6

In addition, Revenue seized 39,407kgs of tobacco with a value of €32.6 million in 2024 and there were 75 summary convictions and €189,277 in fines relating to tobacco offences imposed by the courts in 2024.

Revenue optimises media engagement in terms of successful prosecutions, significant seizures and enforcement initiatives, ensuring the general public is aware of the commitment by Revenue to tackling the illicit cigarette and tobacco trade and to deter those involved. To further encourage the general public to engage with Revenue in its efforts targeting the shadow economy and the supply of illegal tobacco products, Revenue includes a message on all press releases relating to tobacco products notifying that businesses or members of the public can contact Revenue in confidence on the free phone number 1800 295 295.

I am satisfied that Revenue is very conscious of the threat that tobacco smuggling and the sale of illicit tobacco products poses to health, to legitimate business interests and to the Exchequer. I commend Revenue and all the relevant State agencies for their work in this important area and I am satisfied that there is an appropriate focus on tackling this form of criminality.

Tax Reliefs

Ceisteanna (45)

Paula Butterly

Ceist:

45. Deputy Paula Butterly asked the Minister for Finance the steps he is taking to fulfil the programme for Government commitment to extend the help-to-buy scheme to second-hand homes; and if he will make a statement on the matter. [3675/25]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

The Help to Buy (HTB) incentive, is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. It also has as a key aim of the encouragement of additional supply of new houses by supporting demand. The incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation.

In addition to the conditions laid down in section 477C Taxes Consolidation Act 1997 (TCA), including that the property is occupied as the sole or main residence of a first time purchaser, section 477C(2) defines a ‘qualifying residence’. The legislation is very specific as to the definition of a qualifying residence. It must be a new building which was not, at any time, used or suitable for use as a dwelling. If the property was non-residential, but has been converted for residential use, it may qualify for HTB. Renovation or refurbishment of old houses to either upgrade or reinstate them for habitation does not qualify for HTB.

In relation to second-hand properties generally, an increase in the supply of new housing remains a priority aim of Government policy. As mentioned above, the HTB scheme is specifically designed to encourage an increase in demand for affordable new build homes in order to encourage the construction of an additional supply of such properties.

The 2025 Programme for Government includes the following commitments in relation to the HTB scheme:

• Retain and revise the scheme,

• Extend the scheme until 2030, and

• Continue to support one-off self-builds through the scheme.

As the Deputy will appreciate, decisions regarding taxation measures are 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.

Tax Avoidance

Ceisteanna (46, 47, 48, 49, 50, 51, 52, 53, 54)

The following table sets out the 16 SAARs, as contained in Schedule 33 of the Taxes Consolidation Act 1997, together with the full title of relevant section.

No	Rule	Section title
1	Section 381B	Restriction of loss relief — passive trades
2	Section 381C	Restriction of loss relief — anti-avoidance
3	Section 546A	Restrictions on allowable losses
4	Section 590	Attribution to participators of chargeable gains accruing to non-resident company
5	Section 806	Charge to income tax on transfer of assets abroad
6	Section 807A	Liability of non-transferors
7	Section 811B	Tax treatment of loans from employee benefit schemes
8	Section 812	Taxation of income deemed to arise from transfers of right to receive interest from securities
9	Section 813	Taxation of transactions associated with loans or credit
10	Section 814	Taxation of income deemed to arise from transactions in certificates of deposit and assignable deposits
11	Section 815	Taxation of income deemed to arise on certain sales of securities
12	Section 816	Taxation of shares issued in place of cash dividends
13	Section 817	Schemes to avoid liability to tax under Schedule F
14	Section 817A	Restriction of relief for payments of interest
15	Section 817B	Treatment of interest in certain circumstances
16	Section 817C	Restriction on deductibility of certain interest

The GAAR is contained in Chapter 2, Part 33 of the Taxes Consolidation Act 1997. Section 811 applied for transactions commenced up to 23 October 2014 and section 811C applies to transactions commenced after 23 October 2014. The general principles as to what constitutes a tax avoidance transaction are broadly the same under both sets of provisions. Section 811 required Revenue to issue a Notice of Opinion for transactions considered to represent tax avoidance. Section 811C does not require Revenue to issue a Notice of Opinion, instead a Notice of Assessment is issued. The intention of the GAAR is to challenge tax avoidance transactions which have little or no commercial purpose and are primarily entered into to obtain a tax advantage.

A compliance intervention may not always be opened under GAAR or SAAR, the applicability of these issues may be identified as the case progresses. For this reason, it is not possible to accurately present the number of actions taken under each of the SAARs or the number of potential tax avoidance cases opened. However, in response to the Deputy's question, Revenue has advised me that as at 1 January 2025, it was challenging 228 tax avoidance cases, relating to 33 transactions.

Tax avoidance is applying tax legislation in a way that inappropriately obtains a tax advantage. Tax avoidance can involve the misuse of tax reliefs and allowances or the re-characterisation of a transaction. It involves transactions which are undertaken primarily to claim a tax advantage and not for genuine business reasons. Often, it involves contrived, artificial transactions that serve little or no purpose other than to gain a tax advantage.

Table 2 below sets out the number of tax avoidance cases closed from 2015 – 2024:

Year	No Avoidance cases closed	Yield (€m)
2015	160	42
2016	40	10
2017	1,352*	3.8
2018	22	5.7
2019	127	29
2020	104	18.4
2021	125	11.7
2022	104	16.1
2023	86	16.5
2024	256	46

*I am advised by Revenue that of the 1,352 avoidance cases settled in 2017, 1,332 were closed following the Supreme Court’s decision in the Hans Droog case, in which it was successfully argued by the appellant that time limits set out in legislation relating to the self-assessment system apply to anti-avoidance legislation. As a result of the Supreme Court decision and acting on legal advice, Revenue closed similar cases involving time limit issues which it was no longer possible to pursue as a result of the application of the time limit.

As regards interest paid on interventions opened under GAAR, I am advised by Revenue that in the time available it has not been possible to finalise all of this data. Revenue is finalising the data and it will be provided to Deputy Doherty directly, by Revenue as soon as possible.

The avoidance surcharge is an additional penalty applied under Section 811C of the Taxes Consolidation Act 1997 to deter taxpayers from engaging in tax avoidance transactions. A tax avoidance surcharge applies where a person seeks to obtain the benefit of any tax advantage which is withdrawn by Section 811C or one of the Specific Anti Avoidance Rules. The surcharge can be up to 30%.

Revenue has dedicated Anti-Avoidance branches in their High Wealth and Financial Services Division. These branches have responsibility for challenging tax avoidance nationally under both general and specific anti-avoidance legislation. Avoidance may be challenged using a number of sections of the Taxes Consolidation Act 1997. Settlements in cases can consist of yield relating to avoidance transactions and non-avoidance transactions. I am advised by Revenue that while Revenue’s case management system uses taxpayer unit level data, yield broken down by percentage is not generated as part of the recording process. Therefore, it is not possible to provide the data requested by the Deputy.

Protective Notifications (PNs) are available for taxpayers who enter a transaction that they do not believe to be a tax avoidance scheme. If concerned that Revenue may challenge a transaction under the GAAR, taxpayers can file a PN using Form PN1. This will ensure that if Revenue successfully challenges the scheme under the GAAR, the taxpayer may not have to pay the tax avoidance surcharge of 30%. Where Revenue receives a valid PN, interest will not accrue until 30 days after any assessment is made under the GAAR.

I am advised by Revenue that the following table sets out the PNs received since 2015:

Year	Number ofPN1 Forms Submitted	No of PN1 Forms Accepted	Invalid PN1 Forms *
2015	4	4	0
2016	0	0	0
2017	0	0	0
2018	0	0	0
2019	0	0	0
2020	1	0	1
2021	1	0	1
2022	0	0	0
2023	0	0	0
2024	0	0	0
Total	6	4	2

*This column represents PN1 forms where the submission made to Revenue did not meet the requirements to be deemed a valid protective notification within the meaning of Chapter 2, Part 33, TCA 1997.

In respect of the Deputy's question on the total number of agreements entered into by Revenue to reduce the tax liability, interest, or surcharge resulting from tax avoidance transactions, I am advised by Revenue that they do not reduce tax liabilities. At the conclusion of a compliance intervention, the final liabilities are determined. If these are not agreed, taxpayers may appeal and the final liability may be determined in the courts. Liabilities are reviewed in line with the full information available. Additional information may become available which leads to a revised tax liability in line with legislation and Revenue’s Compliance Intervention Framework before the conclusion of a case. Therefore, it is not possible to provide the specific information requested.

Finally, Revenue have advised me that the provisions of Chapter 3A of Part 47 of the Taxes Consolidation Act, 1997, as they apply to penalties, applies to surcharges imposed by Section 811D(3) of the Taxes Consolidation Act 1997. To date, no court applications have been brought by Revenue under the provisions of Chapter 3A of Part 47 as they apply to these surcharges.

Question No. 47 answered with Question No. 46.

Question No. 48 answered with Question No. 46.

Question No. 49 answered with Question No. 46.

Question No. 50 answered with Question No. 46.

Question No. 51 answered with Question No. 46.

Question No. 52 answered with Question No. 46.

Question No. 53 answered with Question No. 46.

Question No. 54 answered with Question No. 46.

Tax Credits

Ceisteanna (55)

Michael Cahill

Ceist:

55. Deputy Michael Cahill asked the Minister for Finance if he will prioritise the introduction of a new regional AV tax credit in 2026; and if he will make a statement on the matter. [3645/25]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

Finance Act 2018 introduced a short-term, tapered regional uplift under the section 481 film tax credit for productions being made in areas designated under the State aid regional guidelines (among other criteria). The purpose of the regional uplift was to support the development of new, local pools of talent in areas outside the current main production hubs, to support the geographic spread of the audio-visual sector.

The uplift provided an increased level of credit for five years, with 5% available in years 1 to 3 (2019, 2020 and 2021), 3% available in year 4 (2022), and 2% available in year 5 (2023). The uplift has now ceased.

As the regional uplift was an approved State aid, any restoration of the uplift would require approval from the European Commission. It should be noted that a further extension of the uplift in its previous form may not be possible. While it was not a Regional Aid, the relief operated by reference to the regional aid map applicable at the time it was introduced. A new regional aid map, covering a smaller geographic area, was introduced from April 2021.

There are presently no plans for the introduction of a regional uplift or any other regionally-targeted tax-based supports for the audiovisual sector. However, the Deputy will be aware that, as part of Budget 2024, the cap on eligible expenditure for audio-visual productions was increased from €70 million to €125 million. In addition, two further new measures were introduced for the audiovisual sector as part of Budget 2025. The section 481 film tax credit has been amended to provide for an uplift of 8% to the existing rate of 32% for small to medium sized productions with a maximum qualifying expenditure of €20 million, and a new audiovisual credit has also been introduced for Unscripted Productions, this provides for a 20% credit on eligible expenditure of up to €15 million per production. Both measures have been introduced subject to commencement orders, pending receipt of State aid approval from the European Commission.

There are no geographic restrictions on the availability of these supports, so they be available to projects taking place in all regions of the State.

Tax Yield

Ceisteanna (56)

Carol Nolan

Ceist:

56. Deputy Carol Nolan asked the Minister for Finance if the revenue accruing from the issuance of excise licenses is ring-fenced for expenditure on measures specific to the sector subject to the licence; and if he will make a statement on the matter. [3665/25]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

The Deputy should note that with limited exceptions such as the treatment of the carbon tax receipts, hypothecation is not a feature of the Irish tax system as it reduces the flexibility of the Government to prioritise and allocate funds as necessary at a particular time. Such reduced flexibility could act as a constraint on expenditure decisions and could also distort the allocation of resources resulting in the potential for reduced value for money and sub-optimal outcomes.

Question No. 57 answered with Question No. 44.

Question No. 58 answered with Question No 44.

Tax Code

Ceisteanna (59)

Seán Ó Fearghaíl

Ceist:

59. Deputy Seán Ó Fearghaíl asked the Minister for Finance if he will address the concerns raised in correspondence (details supplied) concerning inheritance tax; and if he will make a statement on the matter. [3674/25]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

Capital Acquisitions Tax (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.

In Budget 2025, the Group A threshold was increased from €335,000 to €400,000, Group B from €32,500 to €40,000 and Group C from €16,250 to €20,000.

You should be aware that there would be a significant cost in making substantial changes to the CAT thresholds such as the one referenced in the question. Therefore any consideration of this type must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.

Tax Avoidance

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I am advised by Revenue that the transfer of deferred benefits may be made from an occupational pension scheme or a Personal Retirement Savings Account (PRSA) to an overseas pension arrangement, once such a transfer complies with the Occupational Pension Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations 2003, available at www.irishstatutebook.ie/eli/2003/si/716/made/en/print. The Regulations are under the remit of the Minister for Social Protection and prescribe the conditions for transfers to pension arrangements established outside the State.

Such conditions must therefore be satisfied to ensure that a transfer to an overseas pension scheme is a bone fide transfer. When facilitating the transfer of an occupational pension scheme or PRSA to an overseas pension scheme, the trustees or PRSA provider must be satisfied that:

(a) the member or PRSA contributor has requested a transfer,

(b) the overseas arrangement provides relevant benefits as defined by section 770 Taxes Consolidation Act 1997 (TCA), and

(c) the overseas arrangement has been approved by the appropriate regulatory authority in the country concerned.

To comply with (b) and (c) above, the trustees or PRSA provider should also obtain written confirmation from the administrator of the overseas arrangement to which the transfer is to be made.

Transfers from an Irish pension scheme to a pension scheme in another EU Member State, must be to a scheme which is operated or managed by an Institution for Occupational Retirement Provision (IORP) within the meaning of the EU Pensions Directive, and must be established in a Member State of the EU which has implemented the Directive in its national law. Transfers are also permitted from an Irish pension scheme to a pension scheme in the United Kingdom which is subject to governance and regulatory requirements similar to those under the IORP Directives. The scheme administrator must be resident in an EU Member State or the UK as appropriate. Transfers that comply with the above may be made without prior Revenue approval.

I am further advised by Revenue that moving pension funds overseas in an effort to circumvent the requirements of Irish pension tax legislation may fall foul of the conditions under which a pension scheme was approved by Revenue as an exempt approved scheme or the conditions under which a PRSA product received Revenue approval. This could result in the withdrawal of the approval of an occupational pension scheme in accordance with the provisions of section 772(5) of the Taxes Consolidation Act (TCA) 1997 or the withdrawal of the approval of the PRSA product under section 787K (3) and (4) TCA 1997. Any such withdrawal of approval could trigger significant tax liabilities on the sums moved overseas and the withdrawal or claw back of tax reliefs. Moreover, in such cases and depending on the circumstances and the motivation of the individual concerned the possibility also arises that such transactions may also fall foul of the legislation designed to counter tax avoidance transactions.

In relation to the transfer of occupational pensions to other EU jurisdictions under the IORP II Directive (Institutions for Occupational Retirement Provision Directive) and to the UK, the number of declarations signed by the individual concerned that have been submitted each year since 2012 to 2024 and to date in 2025 are set out below:

Year	Declarations
2012	102
2013	147
2014	121
2015	63
2016	64
2017	65
2018	81
2019	58
2020	50
2021	67
2022	68
2023	48
2024	47
2025	<10

Revenue approval is required in advance of transfers to a pension scheme in a country other than the UK or an EU Member State. If the transfer is to a country outside the EU (other than the UK) a transfer may not be made to a country other than the one in which the member is currently employed.

The number of overseas transfers to countries other than to another EU Member State or to the UK each year since 2014 which have been approved by Revenue, and for which confirmation has been received of the date and amount of the subsequent transfer, are set out below:

Year	Transfers
2014	27
2015	14
2016	13
2017	15
2018	<10
2019	<10
2020	12
2021	<10
2022	<10
2023	<10
2024	<10

A breakdown of these transfers by destination country and the average per country is set out in the table below:

	Transfer	Average
Australia	37	€ 93,938.87
Canada	13	€ 38,518.01
Cayman	<10	€ 773,070.45
Channel Islands	<10	€ 48,876.59
Hong Kong	<10	€ 106,597.60
Iceland	<10	€ 17,360.54
India	18	€ 37,887.58
Isle of Man	<10	€ 99,821.69
New Zealand	18	€ 66,343.58
Norway	<10	€ 17,286.14
South Africa	<10	€ 52,223.08
Switzerland	<10	€ 33,580.95

In relation to the number of applications that were not approved, I am advised by Revenue, Deputy, that Revenue’s Pensions Branch maintains statistical information in relation to applications for transfer of pensions arrangements overseas which have been approved by Revenue and for which confirmation has been received that the applicant proceeded with the transfer as well as the date and value of the fund transferred. Statistical information in relation to applications for which approval was denied is not maintained and is therefore not available.

In relation to the share of transfers that relate to public sector and the share that relate to private sector workers, Deputy, I am advised by Revenue that applicants are not required to provide information as to whether the scheme transferred relates to public sector or private sector employment and, as such, this information is not available.

Question No. 61 answered with Question No. 60.

Question No. 62 answered with Question No. 60.

Artificial Intelligence

Ceisteanna (63)

Richard Boyd Barrett

Ceist:

63. Deputy Richard Boyd Barrett asked the Minister for Finance to provide a detailed breakdown of all funding allocated for the year ahead or spent in the past fiscal year by his Department on artificial intelligence systems or artificial intelligence research; what programs or Department operations, if any, are conducted using artificial intelligence tools; and if he will make a statement on the matter. [3707/25]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

For operational and security reasons, we have previously been advised by the National Cyber Security Centre (NCSC) not to disclose details of systems and processes which could in any way compromise departmental security. In particular, it is not considered appropriate to disclose information which might assist criminals to identify potential vulnerabilities in departmental cybersecurity arrangements. My department does not comment on operational security matters.

However, I can advise that no funding has been allocated to be spent on artificial intelligence systems or artificial intelligence research for the year ahead in my department. Furthermore, no funding has been allocated for these purposes in the past fiscal year.

My department does not use artificial intelligence tools or programs.

Tax Code

Ceisteanna (64)

Brian Brennan

Ceist:

64. Deputy Brian Brennan asked the Minister for Finance if, following the changes to benefit in kind in January 2025, consideration can be given to reviewing cases (details supplied); and if he will make a statement on the matter. [3771/25]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

In recent years, Government policy has focused on strengthening the environmental rationale behind company car taxation. Finance Act 2019 introduced an environmental rationale for the calculation of Benefit-in-Kind (BIK) on employer provided cars. The introduction of an environmental rationale for BIK was a commitment in the Climate Action Plan and aligns with vehicle BIK policy in several other Member States as well as national vehicle taxation policy. In order to ensure smooth implementation for employees and employers this change was signalled well in advance of the implementation date from which it took effect which was 1 January 2023.

Since 1 January 2023, new rates of benefit-in-kind (BIK) apply to employer provided cars, 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 and Finance Act 2024 extended the relief for a further year to 31 December 2025.

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 2025 is €45,000. EVs with an OMV of less than €45,000 have no BIK liability, while those with a higher OMV can reduce the taxable amount by €45,000. This BIK exemption forms part of a broader series of generous measures to incentivise the uptake of lower emissions vehicles, including a reduced rate of 7% Vehicle Registration Tax (VRT), a VRT relief of up to €5,000, low motor tax, SEAI grants, and a BIK exemption on the installation of an EV home charger by an employer at the principal residence of a director or employee.

Further information on the taxation of employer provided vehicles can be found at the links below:

• www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-company-cars/index.aspx

• www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01b.pdf

In relation to whether any changes to the current BIK taxation situation for company cars will be considered, vehicle tax policies are kept under review as part of the Tax Strategy Group and Budgetary cycle.