Written Answers Nos. 441-460
441. Deputy Donna McGettigan asked the Tánaiste and Minister for Finance the reason paramedics and EMTs do not receive the same level of flat-rate uniform-related tax relief as other comparable frontline healthcare professionals; if he will commit to addressing this financial anomaly as part of the current industrial negotiations to show respect for the workforce; and if he will make a statement on the matter. [34643/26]
Amharc ar fhreagraThe flat rate expense (“FRE”) regime is operated by Revenue on an administrative basis, where both a specific commonality of expenditure exists across an employment category and the statutory requirement for the tax deduction as set out in section 114 of the Taxes Consolidation Act (“TCA”) 1997 is satisfied, namely, that the expenses are wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment by the employee concerned and that such expenses are not reimbursed by his or her employer.
Revenue have advised that the FRE regime was established to apply a uniformity of approach to tax deductibility for expenses of large groups of employees and to facilitate ease of administration for both Revenue and employees. The expense should apply to all employees in that category and not be discretionary.
The FRE regime developed incrementally over the last 40 to 50 years and was established at a time when the numbers of employees/PAYE taxpayers filing an Income Tax Return was relatively low. This contrasts with the position today, whereby due to significant IT developments in Revenue systems in recent years, as well as the promotion of online channels, Revenue is now providing an easy to use, free, on-line Income Tax Return filing solution for taxpayers. For example, the number of PAYE taxpayers that filed an Income Tax Return for the 2023 tax year was over 1,100,000, when compared to the figure of under 300,000 in 2018.
Revenue have advised that the FRE is generally determined following engagement between Revenue and the relevant representative body. I am advised by Revenue that they have not received any formal application from a representative body on behalf of individuals working as paramedics for the National Ambulance Service or pre-hospital emergency care workers. I am further advised by Revenue that should the representative bodies for these groups wish to engage with Revenue further on the matter, Revenue will be happy to do so and will provide guidance on the supporting information required to enable the request to be considered.
Notwithstanding that an FRE is not available to either paramedics or pre-hospital emergency care workers, as for all employees, they retain their statutory right to claim a deduction under section 114 TCA 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent to which the expenses are not reimbursed by the employer.
The quickest and easiest way to claim tax relief for qualifying employment expenses is to complete an online Income Tax Return. This return can be found in the PAYE Services tab in myAccount on the Revenue website.
Further guidance on the general rule of deduction of expenses in employment, including how to make a claim, is available on Revenue’s website.
442. Deputy Joe Cooney asked the Tánaiste and Minister for Finance whether an issue of 'unjust enrichment' occurs where a vulture fund gets more than a reasonable return on its investment in the context of a property repossession; and if he will make a statement on the matter. [35292/26]
Amharc ar fhreagraThe provider of a mortgage has the general right to assign or sell its entitlements and rights under a credit agreement, or a portfolio of agreements, to another entity.
In such a situation the new entity acquires the rights and benefits of the mortgage provider.
Such a transaction does not change the terms of the underlying credit contract and the benefits, rights and obligations of both the mortgage provider and mortgage holder as set out in the mortgage contract remain in place.
Where the right to obtain possession of the mortgaged property arises and where that right is exercised, there is an obligation to realise the security and where the property is sold to obtain the best price reasonably available for the property.
The proceeds of any such sale is then be used to repay the debt secured on the property and appropriate costs, and any balance remaining from the sale is due to the mortgage holder.
Any dispute about whether or not an ‘unjust enrichment’ arises in any case is ultimately a matter for the courts.
However, if a person has any complaint about the actions of a Central Bank regulated entity, including an entity which services a credit agreement or an entity which acquires the legal rights of a creditor under a credit agreement entered into by a consumer, that person should make a complaint directly to the regulated entity in the first instance.
If the person is still not satisfied with the response received, that person can then submit the complaint to the Financial Services and Pensions Ombudsman which is the entity to adjudicate out of court on complaints between a consumer and a financial services provider.
443. Deputy George Lawlor asked the Tánaiste and Minister for Finance if his Department is monitoring the agreed exit plan for a bank (details supplied); the way in which it is dealing with former customers; if he has received reports from the Financial Services and Pension Ombudsman on complaints received by former customers of the bank; if his Department has had discussions with the ombudsman to ensure that the rights and entitlements of all former customers are fully protected; and if he will make a statement on the matter. [33991/26]
Amharc ar fhreagraThe Department of Finance monitors the performance of, and any challenges relating to, the Irish banking sector at a broad level. Day-to-day supervision is the responsibility of the Central Bank of Ireland as the independent financial regulator in Ireland.
In relation to individual complaints, the Financial Services and Pension Ombudsman (FSPO) provides an independent, fair, impartial, confidential and free service to help resolve complaints from consumers and small businesses against financial service providers and pension providers.
The FSPO is independent in the performance of their statutory functions. Due to their independence, as Minister of Finance, it would not be appropriate for me to comment on, or intervene in, individual cases.
The FSPO has advised that it does not comment on individual complaints, identify the provider involved in individual complaints by name or address, or publish information on the complaints received by individual providers, other than where permitted under the Financial Services and Pensions Ombudsman Act 2017.
The FSPO publishes a comprehensive Overview of Complaints each year which includes: a summary of all complaints made to the FSPO, a review of trends and patterns in the making of complaints to the FSPO; a breakdown of the method by which all complaints made to the FSPO were dealt with; and a summary of the outcome of all complaints concluded or terminated.
Finally, the Financial Services and Pensions Ombudsman (Amendment) Act 2025, which was enacted last year, clarified that the FSPO has the statutory power to investigate complaints against a financial service provider or pension provider even if the provider has subsequently left the market.
444. Deputy Louise O'Reilly asked the Tánaiste and Minister for Finance if he is aware that the PAYE helpline's opening hours 9:30-13:30 make it difficult for PAYE taxpayers working full-time to access support; if he will consider amending this arrangement to extend these hours (details supplied) given the importance of making sure such a public service is accessible; and if he will make a statement on the matter. [34021/26]
Amharc ar fhreagraRevenue has confirmed to me that it continuously reviews its service channels and deploys its resources on an agile basis to meet demand ensuring optimum support to taxpayers throughout the year. Revenue allocates resources to best meet the demands of the various services provided.
The current arrangement is that the PAYE phone service operates from 9:30am to 1:30pm each day providing optimum allocation of available resources to deal with the volume of submissions through both online and post as well as through the phone service. The highest demand on Revenue’s PAYE Services occurs from January to April as taxpayers submit their income tax returns for the previous year, claim refunds or reliefs to which they may be entitled, and review tax credits for the current year.
Revenue has advised me that, from 1 January 2026 to close of business on 5 May 2026, their PAYE Helpline staff answered over 231,767 calls and processed over 494,587 items of correspondence received through its online services and postal system.
Revenue acknowledges that during peak periods, queuing times can lengthen. To mitigate this, Revenue operates a callback facility on the PAYE helpline. This service offers customers the option of a callback when they do not wish to wait on the queue for their call to be answered. Their place is held in the queue and once their place has been reached, they receive a call back within 20 minutes. This measure is designed to prevent excessively long wait times that taxpayers may face when contacting Revenue during peak times. During 2025, approximately 27% of PAYE helpline calls were managed through this callback facility.
It should be noted that Revenue’s secure online service, MyEnquiries is available 24 hours a day 7 days a week and is user friendly. While many customers prefer digital interaction, and promoting the use of digital services is in line with the Digital Public Services Plan 2030, there are also individuals who prefer a more traditional service. While encouraging taxpayers to avail of its easy-to-use online 24-hour channel, Revenue continues to facilitate customers who choose not to use online channels.
Additionally, Revenue offers a range of appointment services in addition to phone and online services. In-person and virtual appointments can be arranged by calling Revenue’s National Appointments Service on (01) 738 3660. Further information regarding Revenue’s National Appointments Service can be found on the Revenue website.
Revenue has assured me it is committed to continually improving and enhancing its service delivery channels. As part of this, I am advised that Revenue reviews feedback received in relation to its phonelines and online services and actively seek to improve its service channels, wherever possible. I am also advised that the current deployment of resources and the model of both the PAYE phone service and Revenue’s online service seeks to balance the demand levels from PAYE taxpayers and the need to provide an efficient and cost-effective service across a number of service channels.
445. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance the VAT treatment applicable to coach and bus operators based in the State compared with operators based in Northern Ireland providing similar cross-Border and tourism services; whether his Department has assessed the impact of any differences in VAT treatment on operators based in the State; if he will outline any legislative or policy measures under consideration in this area; and if he will make a statement on the matter. [34044/26]
Amharc ar fhreagra457. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance to outline the VAT treatment applicable to coach and bus operators based in the State, including those providing cross-border and tourism services; whether his Department has undertaken any assessment of the impact of current VAT arrangements on the competitiveness of such operators; any engagement he has had with relevant stakeholders on this matter; any legislative or policy changes under consideration; and if he will make a statement on the matter. [34249/26]
Amharc ar fhreagraI propose to take Questions Nos. 445 and 457 together.
The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate or exemption from VAT. In addition, the Directive allows for historic VAT treatment to be maintained under certain conditions and Ireland has retained the application of VAT exemption to the transport of passengers and their accompanying baggage. This means that under Ireland’s VAT rules, the supplier of passenger transport services does not register for VAT, does not charge VAT on the supply of their services and, consequently, has no VAT recovery entitlement on their input costs.
In accordance with the EU rules, Ireland may continue to apply this existing, historic VAT exemption on the supply of domestic passenger transport but, for as long as the exemption remains, the conditions under which the exemption was granted cannot be changed. The introduction of a new entitlement to VAT recovery for the passenger transport sector could only be done if Ireland were to decide to end its historic exemption for the sector and bring passenger transport services into the VAT net; this would then require suppliers to register for VAT and require them to charge VAT on their passenger fares.
There are currently no plans to end Ireland’s VAT exemption for passenger transport services.
Ireland has also maintained a relieving provision, the Value Added Tax (Refund of Tax) (Touring Coaches) Order of 2012, which provides for a refund of VAT on the cost of acquiring “qualifying vehicles” used for the carriage of tourists under contracts for group transport. The order defines “qualifying vehicles” as single deck touring coaches of specific dimensions (not less than 2,700 millimetres in height, 8,000 millimetres in length and 775 millimetres in floor height with an underfloor luggage capacity of less than 3 cubic meters), or alternatively, double deck touring coaches of particular dimensions (not more than 4,300 millimetres in height and not less than 10,000 millimetres in length).
446. Deputy Grace Boland asked the Tánaiste and Minister for Finance if he will provide a list of all capital projects and programmes funded or overseen under the remit of his Department, and bodies under its aegis, which have been completed on time and within budget in Fingal in each of the past five years, in tabular form; and if he will make a statement on the matter. [34049/26]
Amharc ar fhreagraI wish to advise the Deputy that there have been no capital projects or programmes funded or overseen under the remit of my Department or Bodies under the Aegis of my Department in Fingal in the past five years.
447. Deputy Micheál Carrigy asked the Tánaiste and Minister for Finance if he will provide a list of all capital projects and programmes funded or overseen under the remit of his Department, and bodies under its aegis, which have been completed on time and within budget in Longford in each of the past five years, in tabular form; and if he will make a statement on the matter. [34076/26]
Amharc ar fhreagraI wish to advise the Deputy that there have been no capital projects or programmes funded or overseen under the remit of my Department or Bodies under the Aegis of my Department in Longford in the past five years.
448. Deputy Barry Ward asked the Tánaiste and Minister for Finance if he envisages a timeline for the introduction of a scheme to support home-heating modification; and if he will make a statement on the matter. [34116/26]
Amharc ar fhreagra449. Deputy Barry Ward asked the Tánaiste and Minister for Finance the way in which his Department intends to decide which renewable fuels will be included in a future scheme to support home-heating modification; and if he will make a statement on the matter. [34117/26]
Amharc ar fhreagra450. Deputy Barry Ward asked the Tánaiste and Minister for Finance if HVO is one of the fuels being examined for inclusion in a scheme for home-heating decarbonisation supports; if his Department is examining existing rates of tax on HVO compared to other home heating fuels; and if he will make a statement on the matter. [34118/26]
Amharc ar fhreagra451. Deputy Barry Ward asked the Tánaiste and Minister for Finance if his Department has worked with the Department of Climate Energy and Environment to ensure that the roadmap to increasing supplies of HVO is consistent with his call to allow switches to HVO-based home heating; the engagements that have taken place to date; whether engagements are ongoing [34119/26]
Amharc ar fhreagraI propose to take Questions Nos. 448, 449, 450 and 451 together.
The Government is very conscious of the substantial price increases in home heating oil as a result of the conflict in the Middle East. It is important to note that recent spikes in the price of home heating oil are not as a result of taxes, nor Government policy, but due to the wholesale market price of oil.
To date, to protect those most at risk of fuel poverty, Government has extended the fuel allowance season, which would have normally run for 28 weeks, by a further four weeks in order to ease the financial burden on households. This will result in additional payments of €152 to more than a quarter of all households. For reference, a typical household receiving the fuel allowance will have received €1,216 over the course of the fuel allowance season.
Furthermore, conscious of the pressure being experienced by households owing to the conflict in the Middle East, the Government has announced the deferral of the next planned increase in carbon tax on home heating fuels, which was scheduled for 1 May, until 14 October.
Carbon tax remains an important part of Ireland’s overall commitment to tackling climate change and to lessen Ireland's dependence on fossil fuels, with successive annual budgets providing additional funds for targeted social protection payments, residential and energy efficiency measures, as well as funding to encourage green farming practices. As of Budget 2026, the Government has allocated over €4.2 billion in carbon tax revenue for these purposes since 2020. ESRI analysis consistently shows the lower income deciles are better off as a result of the social protection measures funded by the increased carbon tax.
The volatility evident in international fuel markets further reinforces the need to decouple from fossil fuel dependence and to enhance energy security. Ireland’s long-term commitment to combating climate change is firmly established and will remain a central consideration in future policy decisions on this matter.
The Government continues to keep all supports under review, particularly in light of evolving cost-of-living conditions.
452. Deputy Eoghan Kenny asked the Tánaiste and Minister for Finance if a van is liable for VRT if it has removable seats; and if he will make a statement on the matter. [34157/26]
Amharc ar fhreagraThe Finance Act 1992, as amended, sets out the rules governing vehicle registration and Vehicle Registration Tax (VRT). In general, the legislation obliges an individual who brings a vehicle into the State to register it within 30 days. Under the Act, VRT is charged on a vehicle at the time of registration in the State and depends on the category of the vehicle involved.
VRT on Category A vehicles (generally passenger vehicles) is assessed based on the value of the vehicle and its emissions levels for carbon dioxide (CO2) and nitrogen oxide (NOx). VRT on Category B vehicles (generally light commercial vehicles and motor caravans) is assessed on the value of the vehicle and its CO2 emissions. Heavier commercial vehicles, including lorries and buses, come within Category C, and are charged VRT at a flat rate of €200. Vehicles must have EU type approval which certifies that the vehicle model meets all EU safety, environmental and conformity of production requirements.
When a new vehicle is purchased, the motor dealer registers the vehicle at the point of sale and VRT becomes payable. A used vehicle imported into the State must be presented for registration within 30 days of its date of entry into the State at the National Car Testing Service (NCTS). The legislation provides that the appropriate category for VRT of a particular vehicle is determined at the time of its registration based on the vehicle’s technical categorisation under EU type-approval rules. Certain commercial vehicles are designed to carry both cargo and passengers and can qualify as either a Category A or Category B vehicle under Irish VRT law depending on the details of their technical specification, including whether the cargo and passenger areas are separate.
With regard to the vehicle referenced in the Deputy’s question, if the vehicle has not been registered in the State, the VRT will be assessed at the time of registration on the basis of the vehicle’s specific technical information provided. Information about vehicle registration and VRT is available on Revenue’s website at www.revenue.ie/en/vrt/vehicle-registration-tax/index.aspx
If the vehicle is already registered in Ireland, and it has been converted by the addition of seats, this should be declared to the National Vehicle Registration Tax Service (NVRTS), Revenue. The NVRTS will determine if additional VRT is due. Further detailed information with regard to declaration of vehicle conversions is available at www.revenue.ie/en/vrt/conversions/conversion.aspx
453. Deputy Colm Burke asked the Tánaiste and Minister for Finance to confirm that the proposed reduction in company Benefit in Kind on original market value for electric vehicles from €30,000 in 2027 would be paused and the current rate retained, particularly in light of fuel issues arising from the conflict in the Middle East; and if he will make a statement on the matter. [34172/26]
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 vehicle (EV) BIK relief was first introduced in Finance Act 2017 and over subsequent years has been adjusted on a tapered basis through successive Finance Acts.
Finance (No.2) Act 2023 extended the BIK tapering regime available for EVs to end on 31 December 2027. This means that for an electric car/van made available for an employee’s private use during the years 2024 to 2027, the cash equivalent will be calculated based on the actual OMV of the vehicle reduced by:
• €35,000 in respect of vehicles made available in the 2024 and 2025 year 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.
The reductions apply irrespective of the actual OMV of the vehicle or when the vehicle was first provided to the employee.
Finance Act 2025 introduced several permanent and temporary changes to the BIK regime for EVs, including the following:
The tables used to calculate BIK liability on employer provided cars were amended to incorporate a new category for zero emission cars. As of 1 January 2026, the new A1 vehicle category introduces reduced BIK rates for electric cars, with rates of 6-15%, depending on business mileage.
In addition, the lower limit in the highest mileage band was permanently reduced from 52,001km to 48,001km from 1 January 2026. This change is designed to cater for employees who have high business mileage, and the amendment will result in their BIK liability being reduced.
Finally, the temporary universal reduction to the OMV of cars in categories A1, A, B, C and D and to all vans - which applied since 01 January 2023 and is in addition to the tapering relief for EVs - was extended on a tapered basis for three further years of assessment, to end on 31 December 2028. The relief will remain at €10,000 for the 2026 year of assessment, reducing thereafter to €5,000 for 2027 and €2,500 for 2028.
As this temporary universal relief is tapered in addition to the tapering of the relief applied to the OMV of EVs, an EV driver, in the 2027 year of assessment, may have a combined OMV reduction made up of the €5,000 universal reduction and the €10,000 EV specific reduction, resulting in a total OMV reduction of €15,000.
Further information on the taxation of employer provided vehicles can be found on the Revenue website.
As the Deputy will appreciate, decisions regarding tax incentives and reliefs are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines.
454. Deputy Colm Burke asked the Tánaiste and Minister for Finance the action being taken to control the transporting of coal from Northern Ireland to the South, where said coal is being sold for cash without the payment of any tax; and if he will make a statement on the matter. [34174/26]
Amharc ar fhreagraSolid Fuel Carbon Tax (SFCT) applies to the first supply in the State of coal, peat, and peat products. While SFCT is an excise duty, solid fuels are not part of the range of goods – tobacco, alcohol and oils – for which there is a harmonised EU-wide excise control and movement regime. Therefore, in accordance with the Treaty on the Functioning of the European Union, Revenue may not apply any barriers to the free movement of solid fuels into the State from other Member States or from Northern Ireland (NI).
The movement of solid fuel across the border from Northern Ireland (NI) does not generate a liability to SFCT nor does the physical presence of solid fuel in the State. It is not until solid fuel is first supplied within the State that SFCT becomes liable. This means that a NI supplier who supplies coal to retailers or wholesalers in the State is not liable for SFCT. When those retailers or wholesalers supply the fuel onwards within the State, i.e. make a first supply in the State, they are liable for SFCT, and VAT, and must register with Revenue to account for and pay relevant taxes. Where a NI-based supplier supplies solid fuel directly to consumers in the State, the supplier is liable to SFCT and must register with Revenue. Approximately 5% of SFCT registrations are for NI-based suppliers.
SFCT and VAT are collected on a self-assessment basis and compliance is enforced using the full range of compliance interventions and enforcement provisions for self-assessed taxes. I am advised by Revenue that it addresses non-compliance with SFCT and VAT law on a risk basis and that SFCT and VAT issues may be examined as part of cross-taxhead checks, and Revenue’s outdoor and uniformed staff integrate checks into their wider field operations and visits to fuel retailers. Compliance interventions, particularly those conducted in the border counties, have enhanced Revenue’s understanding of the solid fuel supply chain and have informed risk and intelligence driven compliance activities. Where there are grounds to believe that tax due has not been declared and/or paid, Revenue investigates fully and collects the unpaid tax, together with any interest or penalties due. Members of the public and solid fuel traders who suspect, or have evidence, of tax evasion should report any information to Revenue by contacting their local Revenue Office or Revenue’s Confidential Freephone at1800 295 295. Reports can also be made online by submitting a Tax Evasion Report Form which can be found at https://www.revenue.ie/en/corporate/assist-us/reporting-shadow-economy-activity/reporting.aspx. I am assured that combatting the risk of potential SFCT/VAT evasion will continue to be a priority for Revenue, and cooperation and collaboration with other State agencies and with HM Revenue and Customs in NI will continue to play an important role in this respect.
Separate to tax law, the State's regulatory regime underpinning environmental standards for solid fuels, empowers Local Authorities to enforce legal provisions aimed at preventing the marketing, distribution, sale and use of solid fuels, such as smoky coal, which do not meet the standards that apply within the State. The Air Pollution Act 1987 (Solid Fuels) Regulations 2022 (S.I. No. 529/2022) place specific obligations on anyone transporting solid fuels, including a requirement that accompanying documentation detailing the fuel’s source, destination and compliance with environmental standards are available for inspection by Local Authority staff. Local Authorities emphasise that public cooperation is essential to protecting air quality and outline that if anyone has information on the transportation or sale of smoky coal, they should contact the relevant Local Authority with details such as:
• Vehicle description and registration number,
• Shop or premises address,
• Date and time of the incident.
455. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to consider introducing as a matter of priority an Index Linked Lifetime Tax-Free Threshold available to all Citizens of €600,000; and if he will make a statement on the matter. [34227/26]
Amharc ar fhreagraIn responding to this question it is being assumed that the Deputy is referring to the Capital Acquisition Tax (CAT) thresholds. As the Deputy is aware, CAT thresholds are currently aggregated on a lifetime basis under a self-assessment system, with an individual being required to submit a return reporting receipts by way of gift or inheritance at the point when their lifetime receipts exceed 80% of the relevant CAT lifetime tax-free threshold.
Policy considerations in relation to CAT Group thresholds are complex. In last year’s Tax Strategy Group papers my officials examined a number of policy options, and further considerations will be included in this year’s Tax Strategy Group papers. Ultimately the setting of CAT thresholds is a matter to be considered in the context of the annual Budget and Finance Bill cycles.
It should be noted that CAT is a tax on unearned wealth and aims to be a progressive tax tool.
The current Group threshold structure provides a degree of certainty, both in the levels of thresholds available to the public and the tax yield generated. Index-linking the thresholds could produce ambiguity as to what thresholds will be available going forward.
Finally, the Deputy should note that any further changes to the thresholds must be considered among various other demands within the overall Budget package, as they have been in the past. In that regard, you should note that the CAT group thresholds are kept under review annually by my officials throughout the Finance Bill cycle.
456. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to urgently review Ireland’s ETF Tax system prior to the upcoming budget, (details supplied); and if he will make a statement on the matter. [34228/26]
Amharc ar fhreagraThe Deputy has asked about the tax system around Exchange Traded Funds (ETFs).
An ETF is an investment fund that is traded on a regulated stock exchange. There is no separate taxation regime specifically for ETFs, and the applicable regime is based on the ETFs domicile.
Under the domestic fund regime, a ‘gross roll-up’ applies such that there is no annual tax on income or gains arising to a fund, but the fund has responsibility to deduct an exit tax in respect of payments made to certain unit holders in that fund. To prevent indefinite or long-term deferral of this exit tax, a disposal is deemed to occur every 8 years. For ETFs, while the fund is not required to apply an exit tax, the Irish resident unit holder will be subject to tax on income and gains arising and must self-assess and include details of income and gains in a timely filing on their income tax return to Revenue.
Gross roll-up does not apply to non-Irish domiciled funds but deemed disposal still applies to investments made by Irish residents in investment funds that are considered equivalent to Irish investment structures and are based in an EU/EEA country or an OECD country that has a Double Taxation Treaty with Ireland. Again investors are required to account for any tax due on a self-assessed basis.
I acknowledge the complexities associated with self-assessment for an investor, but as articulated in the Funds Review report, any changes to the current regime does require guardrails to protect the Exchequer and ensure that appropriate taxation is paid. A balance between supporting retail investment while retaining important and necessary anti-avoidance protections, taking account of potential Exchequer impacts, is required.
I am committed to taking the necessary action to support retail investment in Ireland. Budget 2026 introduced a reduction in the taxation rate that applies to Irish and equivalent offshore funds and Irish and certain foreign life assurance products, from 41% to 38%. This change also applies to investments in Exchange-Traded Funds (ETFs) that are taxed under these regimes.
Budget 2026 also included a commitment to publish a roadmap for the taxation of retail investment, setting out an approach to simplify and adapt the tax framework to further support retail investment while retaining necessary and important anti-avoidance protections in a proportionate manner. The roadmap will be published in the coming months. The roadmap will take the Funds Review and the European Commission's Savings and Investment Account recommendation into consideration. A key aspect of the roadmap is the development of a new Irish investment account that aims to reduce the complexities related to retail investment taxation and allow Irish people to grow their savings more efficiently.
458. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to provide a detailed response to correspondence that summarises the seriousness of the cost of living crisis, where a family with two good jobs are finding it increasingly difficult to make ends meet; the action he is taking to address these issues; the action he is taking to address prices spiralling out of control; and if he will make a statement on the matter. [34268/26]
Amharc ar fhreagraThis Government is acutely aware of the challenges people are facing as a result of the energy price shock and has acted with supports worth over €750 million to help insulate households and businesses from the worst impacts of rising costs.
The first intervention by Government to address rising energy prices occurred at the end of the March. Government reduced the excise on fuel, cut the NORA levy to a nominal amount, enhanced the diesel rebate scheme and extended the fuel allowance season by an additional four weeks.
A further package of measures was introduced in April to provide greater support to those most affected by rising fuel prices, and to key sectors of our economy. These measures included a further reduction in the excise duty on fuel. This now means that cost of diesel has been reduced by 32 cent per litre, and by 27 cent per litre for petrol and 7.4 cent per litre for green diesel.
Government has also decided to delay the scheduled increase in carbon tax to later in the year and established support schemes for the haulage and agricultural sectors.
These temporary, targeted and proportionate measures build on the permanent, sustainable supports introduced as part of Budget 2026, such as the extension of the reduced rate of VAT on gas and electricity, the extension of the Rent Tax Credit, increases to social welfare and child support payments, and increases to the Fuel Allowance.
As the Deputy will be aware, the ‘Programme for Government 2025: Securing Ireland’s Future’, contains specific undertakings with regard to personal taxation, it commits to “implementing progressive changes in taxation if the economy remains strong, including indexing credits and bands to prevent an increase in the real burden of Income Tax while in the event of an economic downturn and unexpected deterioration in the public finances we would postpone changes to Income Tax credits or bands, as we did in Budget 2021”.
To ease the burden facing average and middle-income earners, over successive Budgets the previous Government substantially increased the entry point to the higher rate of income tax for all earners by €8,700 or c. 25 per cent. The main tax credits have also been increased by €350, or c. 21 per cent. In line with the Government policy of ensuring full-time workers on the minimum wage remain outside the charge to the top rates of USC the ceiling of the 2 per cent USC rate band was increased by €6,898, or 34 per cent, from 2020 to 2025. Budgets 2024 and 2025 also cumulatively reduced the 4.5 per cent rate of USC to 3 per cent.
Broadly, the income tax measures implemented over the period of the last Government are expected to be in line with wage growth.
Budget 2026 was designed to boost our economic resilience and protect jobs in a deeply uncertain international economic environment. However, it also provided a range of supports to individuals, families and businesses. In particular, the Rent Tax Credit, introduced in Budget 2023, has proven to be a very meaningful support for renters. The credit was extended for a further three years to the end of 2028. The ceiling of the second USC rate band was increased by €1,318, from €27,382 to €28,700. This has ensured that a full-time worker on the minimum wage who benefits from the increase in the hourly minimum wage rate from €13.50 to €14.15 remains outside the highest rates of USC, while it also has provided a modest benefit to all workers whose income is above that amount. The 9 per cent VAT on gas and electricity bills was extended until the 31 December 2030, recognising that energy prices remain high and to help alleviate energy cost pressures for households.
All of these measures will have a positive impact.
It is because of our proven record sound management of the public finances that we have the capacity to respond in a proactive and flexible way to the energy price shock. We have demonstrated that we stand ready to adjust our response, as the situation requires, while also ensuring our approach to overall budgetary policy remains balanced and sustainable in the medium-term.
459. Deputy Albert Dolan asked the Tánaiste and Minister for Finance to clarify the position regarding the application of a reduced VAT rate to beauty and wellbeing services; the consideration has been given to extending VAT supports similar to those applied to hairdressing services; to indicate whether any further review of VAT policy for the beauty and wellbeing sector is currently underway; and if he will make a statement on the matter. [34330/26]
Amharc ar fhreagraThe VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they are exempt from VAT or fall within the categories of goods and services listed in Annex III of the EU VAT Directive, to which Member States are permitted to apply lower VAT rates subject to certain rules.
Beauticians are not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT, and therefore they would fall to be taxed by Member States at their standard rate of VAT – which in Ireland is currently 23%. However, the Directive allows that a Member State may retain certain long-standing VAT arrangements that they had in place, subject to strict conditions including that the terms of the historic arrangement cannot be extended.
On this basis, Ireland is permitted to retain its long-standing application of its reduced VAT rate – which is currently 13.5% – to services related to the care of the human body, which includes beautician services. In accordance with the Directive this arrangement is treated as a ‘parked’ rate, which means that it cannot be reduced below 12%. If Ireland were to cease the application of the parked rate to these supplies, then under the terms of the Directive these services would have to be subject to the standard rate of VAT.
As hairdressing services are specifically included in Annex III and are not a ‘parked’ item, it is possible to apply the 9% rate to them. Therefore, in accordance with Finance Act 2025 the 9% rate will apply to hairdressing services from 1 July 2026. This measure includes hairdressing services provided by beauticians but does not extend to other beauty services.
460. Deputy Keira Keogh asked the Tánaiste and Minister for Finance if he is aware of calls for an increase to income tax exemption limits for those over 65 years of age; and if his Department is taking steps to address these calls; and if he will make a statement on the matter. [34362/26]
Amharc ar fhreagraAs the Deputy is aware, the current thresholds for the income tax age exemption are €18,000 per annum where an individual is aged 65 years or over, and €36,000 per annum for married couples and civil partners, jointly assessed to tax, where either individual is aged 65 or over. The relevant income thresholds may be increased further if the individual has a qualifying child. Additionally, marginal relief may be available where the individual’s or couple’s income exceeds the relevant exemption limit but is less than twice that amount.
The current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. The age tax credit or the age exemption limits and marginal relief are available to persons aged 65 or over. Reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less per annum. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or Pay Related Social Insurance.
The Commission on Taxation and Welfare reviewed these matters, and further details are set out in the Report of the Commission.
Persons aged over 65 can avail of the age exemption or the normal tax system of credits and bands.
With the substantial increases to tax credits introduced by the previous Government, the effective entry point to income tax has increased for all taxpayers, including those aged 65 or older. For 2026, the effective entry point to income tax for an individual in receipt of the single person credit, employee/earned income credit and the age credit is €21,225 per annum and for a married couple is €42,250 per annum.
Therefore, depending on their personal circumstances, it may be more beneficial for persons aged over 65 to be taxed under the normal tax system of credits and bands.
I would encourage all taxpayers to ensure that they are availing of the most beneficial tax treatment.
As the Deputy will appreciate, decisions regarding tax incentives and reliefs are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines.
