Written Answers Nos. 203-222
203. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance whether his Department is examining measures to encourage greater participation by younger people in long-term investment in indigenous Irish enterprise; and if he will make a statement on the matter. [38470/26]
Amharc ar fhreagraOne of the aims of the Savings and Investments Union is to create better financial opportunities across the EU, providing people with more opportunities to invest and provide for their current and future prosperity. In September 2025, the European Commission adopted a Recommendation on increasing the availability of Savings and Investment Accounts (SIAs) in Member States and this included an outline of their key characteristics.
Ireland still does not have a sufficiently diversified savings and investment culture. Too much of people’s hard-earned savings remains in low-yield deposits, where inflation can erode value over time. Deposit accounts are right for many people and for many needs. But they should not be the only practical option. Investment in capital markets can offer households another path to long-term financial wellbeing, while also supporting growth and competitiveness in the wider economy.
The tax treatment of retail investments was considered as part of a broader review into the funds and asset management sector in Ireland, which culminated in the ‘Funds Sector 2030’ report that was published in October 2024.
In recognition of the importance of encouraging retail investment, Budget 2026 provided for a reduction in the rate of taxation on returns from Irish and equivalent investment funds and Irish and certain foreign life assurance policies from 41% to 38% which took effect from 1 January 2026.
In addition, Budget 2026 also included a commitment to publish a roadmap in 2026, setting out the intended approach to simplify and adapt the tax framework to encourage retail investment in future Finance Bills. The roadmap, which will be published in the coming months, will take into consideration developments at EU level in respect of the Savings and Investments Union, including the Recommendation on SIAs and continue to draw upon best practice in other countries who operate successful savings accounts.
At the recent Savings and Investment Forum, I announced the Government’s intention to introduce the legislative framework for an Investment Account in 2026. We want to make investing simpler, clearer, and more accessible for ordinary people, and help their hard-earned money work harder for them over time.
The aim is to legislate for the framework in 2026 and to allow accounts to be offered from 2027. The account will be designed as a simple, one-stop option for individuals. It will also be a key part of a broader rethink of the taxation of retail investment. The Government’s view that the account should be simple, accessible, tax efficient, easy to administer, transparent on fees and portable across borders where possible.
In terms of designing the model that best fits the Irish economy and the needs of Irish households, the views of relevant experts are being considered as well as learning from best international practices. Many countries which have implemented similar schemes have reported that investors tend to have a home bias in terms of their investment choices.
Officials in my Department are currently developing policy options regarding the investment account framework which will form part of the deliberations for Budget 2027 over the coming months.
204. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance whether consideration has been given to the development of more accessible retail investment supports for first-time investors in qualifying Irish SMEs and start-ups; and if he will make a statement on the matter. [38471/26]
Amharc ar fhreagra206. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance whether consideration has been given to the development of a State-supported retail investment mechanism to allow smaller investors to build long-term holdings in qualifying Irish businesses, including through the use of targeted tax incentives [38473/26]
Amharc ar fhreagra207. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance whether his Department has examined ways to broaden access to investment incentives linked to indigenous Irish SMEs beyond higher income and experienced investors, including through lower entry or tiered investment structures aimed at younger and middle-income earners; and if he will make a statement on the matter. [38474/26]
Amharc ar fhreagraI propose to take Questions Nos. 204, 206 and 207 together.
A number of tax incentives are in place which are intended to encourage investment in indigenous SMEs. These measures include the Employment Investment Incentive (EII) and the Start-Up Capital Investment (SCI) which are income tax reliefs for investment in SMEs by private investors. The Start-Up Relief for Entrepreneurs (SURE) is an income tax relief for individuals who leave employment, in particular PAYE workers, to set up their own business. The relief for investment in innovative enterprises, also known as Angel Investor Relief, is a capital gains tax relief for investments made in qualifying innovative SMEs.
These reliefs operate under the EU General Block Exemption Regulation (GBER). The GBER is currently undergoing a revision. Once revised the GBER may offer further scope for reform of these incentives, and my Department will consider potential options, in due course. However, the new GBER is not expected ahead of Q4 2026.
One of the aims of the Savings and Investments Union is to create better financial opportunities across the EU, providing individuals with greater opportunity to invest and provide for their current and future prosperity. In September 2025, the European Commission adopted a Recommendation on increasing the availability of Savings and Investment Accounts (SIAs) in Member States and this included an outline of their key characteristics.
Ireland still does not have a sufficiently diversified savings and investment culture. Too much of individual's hard-earned savings remain in low-yield deposits, where inflation can erode value over time. Deposit accounts are right for many people and for many needs, but they should not be the only practical option. Investment in capital markets can offer households another path to long-term financial wellbeing, while also supporting growth and competitiveness in the wider economy.
At the recent Savings and Investment Forum, I announced the Government’s intention to introduce the legislative framework for an Investment Account in 2026. We want to make investing simpler, clearer, and more accessible for ordinary people. In line with the Commission’s recommendation, the account should be simple, accessible, tax efficient, easy to administer and transparent on fees.
In terms of designing the model that best fits the Irish economy and the needs of Irish households, the views of relevant experts are being considered as well as learning from best international practices.
In addition, in line with Budget 2026 commitments work is underway on 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 includes consideration of the recommendations of the Funds Sector Review on the taxation of retail investment in relation to the issue of deemed disposal, and is expected to be published in the coming months.
205. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance whether his Department has reviewed international approaches aimed at encouraging long-term saving and investment participation among younger people and retail investors; and if he will make a statement on the matter. [38472/26]
Amharc ar fhreagraOne of the aims of the Savings and Investments Union is to create better financial opportunities across the EU, providing people with more opportunities to invest and provide for their current and future prosperity. In September 2025, the European Commission adopted a Recommendation on increasing the availability of Savings and Investment Accounts (SIAs) in Member States and this included an outline of their key characteristics.
Ireland still does not have a sufficiently diversified savings and investment culture. Too much of people’s hard-earned savings remains in low-yield deposits, where inflation can erode value over time. Deposit accounts are right for many people and for many needs. But they should not be the only practical option. Investment in capital markets can offer households another path to long-term financial wellbeing, while also supporting growth and competitiveness in the wider economy.
At the recent Savings and Investment Forum, I announced the Government’s intention to introduce the legislative framework for an Investment Account in 2026. We want to make investing simpler, clearer, and more accessible for ordinary people, and help their hard-earned money work harder for them over time.
The aim is to legislate for the framework in 2026 and to allow accounts to be offered from 2027. The account will be designed as a simple, one-stop option for individuals. It will also be a key part of a broader rethink of the taxation of retail investment. The Government’s view that the account should be simple, accessible, tax efficient, easy to administer, transparent on fees and portable across borders where possible.
In terms of designing the model that best fits the Irish economy and the needs of Irish households, the views of relevant experts are being considered as well as learning from best international practices.
The tax treatment of retail investments was considered as part of a broader review into the funds and asset management sector in Ireland, which culminated in the ‘Funds Sector 2030’ report that was published in October 2024.
In recognition of the importance of encouraging retail investment, Budget 2026 provided for a reduction in the rate of taxation on returns from Irish and equivalent investment funds and Irish and certain foreign life assurance policies from 41% to 38% which took effect from 1 January 2026.
In addition, Budget 2026 also included a commitment to publish a roadmap in 2026, setting out the intended approach to simplify and adapt the tax framework to encourage retail investment in future Finance Bills. The roadmap, which will be published in the coming months, will take into consideration developments at EU level in respect of the Savings and Investments Union, including the Recommendation on SIAs and continue to draw upon best practice in other countries who operate successful savings accounts.
208. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance whether the role of wider participation by younger people and PAYE workers in long-term investment in Irish enterprise is being considered as part of any review of the employment investment incentive scheme or related investment schemes in advance of budget 2027; and if he will make a statement on the matter. [38475/26]
Amharc ar fhreagraOne of the aims of the Savings and Investments Union is to create better financial opportunities across the EU, providing people with more opportunities to invest and provide for their current and future prosperity. In September 2025, the European Commission adopted a Recommendation on increasing the availability of Savings and Investment Accounts (SIAs) in Member States and this included an outline of their key characteristics.
Ireland still does not have a sufficiently diversified savings and investment culture. Too much of people’s hard-earned savings remains in low-yield deposits, where inflation can erode value over time. Deposit accounts are right for many people and for many needs. But they should not be the only practical option. Investment in capital markets can offer households another path to long-term financial wellbeing, while also supporting growth and competitiveness in the wider economy.
At the recent Savings and Investment Forum, I announced the Government’s intention to introduce the legislative framework for an Investment Account in 2026. We want to make investing simpler, clearer, and more accessible for ordinary people, and help their hard-earned money work harder for them over time.
The aim is to legislate for the framework in 2026 and to allow accounts to be offered from 2027. The account will be designed as a simple, one-stop option for individuals. It will also be a key part of a broader rethink of the taxation of retail investment. The Government’s view that the account should be simple, accessible, tax efficient, easy to administer, transparent on fees and portable across borders where possible.
In terms of designing the model that best fits the Irish economy and the needs of Irish households, the views of relevant experts are being considered as well as learning from best international practices.
The tax treatment of retail investments was considered as part of a broader review into the funds and asset management sector in Ireland, which culminated in the ‘Funds Sector 2030’ report that was published in October 2024.
In recognition of the importance of encouraging retail investment, Budget 2026 provided for a reduction in the rate of taxation on returns from Irish and equivalent investment funds and Irish and certain foreign life assurance policies from 41% to 38% which took effect from 1 January 2026.
In addition, Budget 2026 also included a commitment to publish a roadmap in 2026, setting out the intended approach to simplify and adapt the tax framework to encourage retail investment in future Finance Bills. The roadmap, which will be published in the coming months, will take into consideration developments at EU level in respect of the Savings and Investments Union, including the Recommendation on SIAs and continue to draw upon best practice in other countries who operate successful savings accounts.
As for the employment incentive scheme, a number of tax incentives are in place which are intended to encourage investment in indigenous SMEs. These measures include the Employment Investment Incentive (EII) and the Start-Up Capital Investment (SCI) which are income tax reliefs for investment in SMEs by private investors. The Start-Up Relief for Entrepreneurs (SURE) is an income tax relief for people who leave employment, in particular PAYE workers, to set up their own business. The relief for investment in innovative enterprises, also known as Angel Investor Relief, is a capital gains tax relief for investments made in qualifying innovative SMEs.
These reliefs operate under the EU General Block Exemption Regulation (GBER). The GBER is currently undergoing a revision. Once revised the GBER may offer further scope for reform of these incentives, and my Department will consider potential options in due course however the new GBER is not expected ahead of Q4 2026.
209. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the effective corporate tax rate for each year since 2016 excluding non-trading income, in tabular form; and if he will make a statement on the matter. [38487/26]
Amharc ar fhreagraI am advised by Revenue that the table below outlines tentative estimates for the effective corporation tax rate for each year since 2022 excluding non-trading income. These are the years which can be supplied in the timeframe available for answering a parliamentary question.
The estimates were prepared by removing income taxable at 25% from total taxable income and by removing tax levied at 25% from the total corporation tax liability due. I am further advised by Revenue that, to the extent that items such as losses, reliefs, credits or charges are attributable to or used against non-trading income specifically (or offset against tax arising on non-trade income), these are not reflected in the analysis as this level of information is not currently available for statistical analysis. Similarly, it may be the case that certain reliefs and credits reduce the overall corporation tax liability due and do not distinguish whether it is corporation tax arising from trading income or non-trading income that is being reduced.
|
Year |
Estimate of Effective Rate excluding non-trading income |
|
2024 |
9.0% |
|
2023 |
9.4% |
|
2022 |
9.9% |
Further information in respect of effective tax rates for companies is provided in Revenue’s annual Corporation Tax research reports, available online at: www.revenue.ie/en/corporate/information-about-revenue/statistics/corporation-tax/research-reports/index.aspx
It is noted that the above figures are in respect of Irish corporation tax only and do not include additional Pillar Two top-up taxes that will be collected in respect of fiscal years commencing on or after 31 December 2023. The first Pillar Two returns will begin to be filed from next month, June 2026. The Pillar Two framework aims to ensure a minimum effective corporation tax rate of 15%, on a jurisdiction-by-jurisdiction basis, for businesses with average annual group turnover over €750 million.
210. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance to provide an assessment of the Karshan Settlement Opportunity given the fact that 286 employers received tax adjustments for over 6,600 employees making specific reference to the construction sector; the next sets to ensure compliance from companies that have not engaged in the settlement opportunity; and if he will make a statement on the matter. [38488/26]
Amharc ar fhreagraThe Supreme Court judgment, delivered in October 2023 in the case of Revenue v Karshan (Midlands) Ltd. trading as Domino’s Pizza, provided important clarity on the classification of workers for tax purposes by establishing a structured five test framework for determining employment status. Prior to the judgment, employers assessed worker classification based on the information and guidance available at the time.
In that context, Revenue announced the Karshan Settlement Opportunity in September 2025, as set out in the Tax and Duty Manual - Revenue Guidelines – Settlement arrangement arising from Revenue v Karshan (Midlands) Ltd. trading as Domino’s Pizza. The settlement opportunity provided businesses with a mechanism to regularise payroll tax issues for 2024 and 2025 arising from bona fide worker classification errors, without the application of interest or penalties.
To avail of the settlement opportunity, businesses were required to submit a disclosure by 30 January 2026 and either pay all related liabilities in full or request a Phased Payment Arrangement at the time of submission.
Disclosures were received from a broad range of sectors and varied significantly in scale, from employers regularising a single employee to employers regularising more than 100 employees. Many of the employments concerned were part-time or seasonal in nature.
On 7 May 2026, Revenue published preliminary statistics on the Karshan Settlement Opportunity. These figures show that 286 employers made disclosures involving over 6,600 employees, with total tax adjustments of approximately €26.7 million. Within the construction sector specifically, 46 employers made disclosures involving over 150 employees and total tax adjustments of approximately €5.2 million.
Revenue is currently undertaking verification work in respect of the 286 submissions received to ensure compliance with the terms of the settlement opportunity as published in September 2025.
More broadly, Revenue continues to monitor employers across all sectors, including the construction sector, through ongoing compliance programmes which identify cases for intervention based on a range of risk indicators, including the potential misclassification of workers.
As outlined in the Tax and Duty Manual Revenue Guidelines – Settlement arrangement arising from Revenue v Karshan (Midlands) Ltd. trading as Domino’s Pizza, where employers did not avail of the Karshan Settlement Opportunity and liabilities subsequently arise, Revenue will, in addition to pursuing collection of any underpaid taxes, treat the default as a failure to correctly operate PAYE, USC and PRSI obligations. In such cases, Revenue will apply the relevant statutory provisions and seek to impose interest and penalties as appropriate.
211. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the estimated revenue that would be raised by applying a minimum effective tax rate of 45% for all incomes above €140,000 and 50% for all incomes above €250,000, percentage including income, PRSI and USC. [38489/26]
Amharc ar fhreagraFollowing clarifications from the Deputy’s office, the question is being interpreted as requesting the estimated revenue that would be raised by applying a minimum effective tax rate of 41% for those on incomes between €140,000 and €250,000 and 46% for those on incomes in excess of €250,000. This minimum effective rate is to be applied to gross income and the taxes to be incorporated are income tax and USC.
I am advised by Revenue that its income tax micro-simulation tool, Tax Modeller, cannot cost the impact of implementing a minimum effective rate, as this model is structured in line with existing income tax policy, where specified amounts of income are taxed or levied at specified rates. Therefore, for this analysis it is necessary for Revenue to use actual data from tax returns for the latest year for which full data on all taxpayers is available for analysis, currently 2023. Where the Tax Modeller is employed for costings, the results would be estimates for 2026. Data for 2024 will be available for analysis in Q3 of this year, and in the same period Tax Modeller will be updated to produce costing estimates for 2027.
I am further advised by Revenue that, in order to estimate the additional yield from this policy proposal relative to the baseline policies in place, this analysis has to be carried out on a taxpayer unit basis, where a taxpayer unit refers to individuals except in the case of jointly assessed couples who are counted as one unit and the income levels of such jointly assessed couples refers to both incomes combined. Therefore, I am advised by Revenue that the analysis will have the greatest impact on those who are jointly assessed.
I am also advised by Revenue that the gross income available for this analysis is distinct from taxable income, which is the relevant income for the assessment of Income Tax and that, therefore, the figures calculated for this analysis are an overestimate of yield. Further, this gross income is also not used for the assessment of USC as there is a separate calculation of income subject to USC.
Based on these caveats and conditions, I am advised by Revenue that the estimated yield in 2023 is approximately €2.4 billion. The Deputy may wish to note that due to the approach to jointly assessed taxpayers, as outlined above, approximately 83% of this figure relates to jointly assessed taxpayer units.
212. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance to provide details of the revenue collected from the 45% USC rate applied to the full amount of certain bank bonuses each year for which data is available, in tabular from. [38561/26]
Amharc ar fhreagraSection 531AAD of the Taxes Consolidation Act 1997 provides for a charge to be levied on bonus and similar payments over €20,000 paid to employees of financial institutions that received financial support from the State under the Credit Institutions (Financial Support) Act 2008. This charge, known as the “excess bank remuneration charge”, is incorporated into the Universal Social Charge (USC) and applies in all respects as if it were USC, except that it is charged at a higher rate of 45%. I am advised by Revenue that the revenue raised to date by this charge is as follows:
|
Year |
Revenue raised |
|
2011 |
€1.288m |
|
2012 – 2025 |
Nil |
213. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the estimate revenue that would be raised by applying an entity level tax on the REITs and IREF at a rate of 1% of the total value of the assets held in these structures. [38562/26]
Amharc ar fhreagra214. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the revenue that would be raised by removing all exemptions to the withholding tax for IREFs. [38563/26]
Amharc ar fhreagraI propose to take Questions Nos. 213 and 214 together.
An Irish Real Estate Fund (“IREF”) is an Irish regulated investment fund, or sub fund where at least 25% of the value of its assets is derived from Irish property such as land and buildings. The income and gains of an IREF are not subject to corporation tax or capital gains tax. However, where the profits of the IREF are transferred to certain investors, the IREF is required to apply IREF withholding tax (“IREF WHT”) at a rate of 20 per cent.
Finance Act 2019 introduced an additional suite of anti-avoidance measures for IREFs, resulting in a charge to income tax at the level of the IREF in certain circumstances. These measures were introduced to prevent the use of excessive debt and other payments to reduce distributable profits that would be subject to IREF WHT.
There are exemptions from IREF WHT for certain Irish and non-resident investors, for example, where an investor is a domestic or EU/EEA equivalent pension scheme, investment fund or a life assurance company. These categories of investors are generally associated with collective, widely held investment.
I am advised by Revenue that it is not possible to quantify the revenue that would be raised if these categories of investors are not considered exempt as a breakdown of the IREF taxable amount between taxable and exempt investors is not readily available.
In relation to the Deputy’s question regarding the revenue that would be raised by applying an entity level tax on IREFs at a rate of 1% of total value of the assets held, Revenue has published information in Table 31 of a Revenue research report titled “Corporation Tax – 2025 Payments and 2024 Returns” which shows the value of assets reported by IREFs total €26.8bn for accounting periods ending in 2024. If an entity level tax of 1% was applied to this value, the estimated yield is €268m. The research report is available on the Revenue website at: www.revenue.ie/en/corporate/documents/research/ct-analysis-2026.pdf
I am advised by Revenue that due to the small number (less than ten) of Real Estate Investment Trusts (“REITs”) that operate in Ireland and given Revenue’s obligation to maintain the confidentiality of taxpayer information, specific information in relation to the value of assets held cannot be provided.
As publicly listed companies, REITs are required to publish information such as annual accounts online and these may be of assistance to the Deputy.
215. Deputy Ged Nash asked the Tánaiste and Minister for Finance if he will publish a cost-benefit analysis of any proposed new retail savings and investment scheme in advance of the scheme being announced and legislated for; and if he will make a statement on the matter. [38604/26]
Amharc ar fhreagraThe Savings and Investment Union (SIU) is a European initiative with the main aim to help European citizens to invest more so as to ensure that they have better financial outcomes and are better provided for in the future. On 30 September 2025, as part of the SIU strategy, the European Commission adopted a Recommendation on increasing the availability of Savings and Investment Accounts (SIAs) in Member States. The Recommendation outlines the key characteristics that SIAs should have to maximise their uptake and help achieve the objective of boosting retail participation in capital markets. Ireland is committed to support initiatives that enhance retail investor participation in capital markets and strongly welcomed the publication of this Recommendation. I have announced that I intend to legislate for an investment account in Ireland.
Work is underway on aroadmap for the taxation of retail investment that was announced in Budget 2026.The roadmap will set 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 is expected to be published in Summer 2026. A key aspect of the roadmap will be the introduction of the new investment account. The new account will bealigned with the Commission’s recommendation and expert views are being considered.
The European Commission published a working document to accompany their Savings and Investment Account recommendation, which is available on their website. The working document includes an assessment of the impacts of these accounts on EU households. The assessment found that accounts, particularly those with low costs, favourable tax treatment, a streamlined and mostly automatised tax process and flexible investments, have been associated with high participation levels in capital markets across the population. This also includes lower income groups and those with reduced wealth. Inclusively designed accounts have been shown to reduce participation gaps linked to gender, income and accessibility.
216. Deputy Donna McGettigan asked the Tánaiste and Minister for Finance if he has spoken formally with his Australian counterpart to date in 2026; and if he will make a statement on the matter. [38610/26]
Amharc ar fhreagraIreland enjoys a deep and wide ranging bilateral relationship with Australia. We have incredibly strong people to people links- with nearly 10% of Australians identifying as having Irish heritage. Alongside this, we benefit from a secure economic and trade relationship, and from our cooperation on global affairs across an array of fora and channels including the G20 and the OECD.
The links between my Department and the Australian Treasury is strong, benefitting from regular dialogue at senior official level. Since my appointment as Minister for Finance in November of last year, I have not yet had the opportunity for direct formal engagement with Australia's current Finance Minister, Ms. Katy Gallagher, however I look forward to meeting her in the coming period. As you know Ireland will assume the Presidency of the Council of the European Union from 1 July this year and in my role as Chair of ECOFIN, I look forward to representing the EU at G20 finance meetings, and working closely with the Australian Finance Minister.
217. Deputy Ged Nash asked the Tánaiste and Minister for Finance the date on which his Department informed PTSB of an offer for its shareholding in the bank from Centerbridge; and if he will make a statement on the matter. [38615/26]
Amharc ar fhreagraThe Department received a wide range of proposals in relation to the State’s banking investments over the years. As part of their normal functions, officials would explore and assess such proposals.
On 5 September 2025, the Department received a non-binding and indicative proposal from Centerbridge to acquire the Minister's stake in PTSB. The Department was of the view that the proposal undervalued the Minister’s stake in PTSB and informed PTSB of its decision to reject the proposal. Following internal governance, the Department advised Centerbridge that the proposal did not provide a basis for engagement.
218. Deputy Barry Ward asked the Tánaiste and Minister for Finance if he will consider expanding the bike-to-work scheme to include people not in employment, such as children and retired people; and if he will make a statement on the matter. [38629/26]
Amharc ar fhreagra219. Deputy Barry Ward asked the Tánaiste and Minister for Finance if he will consider expanding the bike to work scheme to include people who are self-employed; and if he will make a statement on the matter. [38630/26]
Amharc ar fhreagra220. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding the total number of people supported under the bike-to-work scheme, broken down by year since 2021; and if he will make a statement on the matter. [38631/26]
Amharc ar fhreagra221. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding the total number of people supported under the bike-to-work scheme, broken down by county; and if he will make a statement on the matter. [38632/26]
Amharc ar fhreagra222. Deputy Barry Ward asked the Tánaiste and Minister for Finance the total cost to the Exchequer of the bike-to-work scheme since it was established, broken down by year; and if he will make a statement on the matter. [38633/26]
Amharc ar fhreagra223. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding any review of the bike-to-work scheme to ensure that it operates as efficiently as possible; and if he will make a statement on the matter. [38634/26]
Amharc ar fhreagraI propose to take Questions Nos. 218 to 223, inclusive, together.
As the Deputy may be aware, section 118(5G) of the Taxes Consolidation Act 1997 provides for the Bike-to-Work Scheme. This scheme offers an exemption from Benefit-in-kind where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work.
The scheme was introduced as an incentive to increase the number of people commuting to work by bicycle.
Under section 118B TCA, an employer and employee may enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a benefit such as those provided under the scheme.
Since 1 January 2023, the Bike-to-Work scheme applies to the first:
• €3,000 of expenditure in relation to a cargo or e-cargo bike;
• €1,500 of expenditure in relation to a pedelec or e-bike; or
• €1,250 of expenditure in relation to any other type of bike.
At the outset, the Deputy should note that the Programme for Government 2025, "Securing Ireland's Future", does contain a commitment to, within the lifetime of this Government, conduct a review of the Bike-to-Work scheme, to boost take-up among all workers.
My Department has commenced initial engagement with the Department of Transport in relation to this review.
The scheme offers and exemption from benefit-in-kind where an employer purchases a bicycle and/or associated safety equipment for one of their employees (subject to the limits of the scheme). A benefit-in-kind is a charge to tax which arises where an employer provides an employee with a benefit, such as a bicycle, car or accommodation. These benefits have monetary value and are treated as taxable income. The Bike-to-work scheme provides for an exemption from this charge.
Therefore, the Bike-to-Work scheme is only applicable where the bicycle and/or related safety equipment is provided by an employer to either their director or someone in their employment. Where an employer-employee relationship does not exist, the scheme does not apply. Therefore, the scheme does not apply in the case of retired, self or unemployed individuals, or children.
Likewise, salary sacrifice arrangements can only be entered into between an employer and a director or employee.
The scheme was implemented as tax-exempt benefit-in-kind in order to keep the implementation as simple as possible and reduce administrative burden for employers and employees.
In addition, the scheme operates on a self-administration basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation.
As the scheme does not require any notification or application procedure, there are no data centrally available on the number of people availing of the scheme, the types of bicycles or equipment purchased, or a county-by-county breakdown of the recipients.
However, the Department of Finance produce estimates of the costs and number of recipients annually, as part of the annual Tax Expenditures in Ireland report, and the annual publication of the Tax Expenditure Passports. Both of these publications are available on my Department’s website, at: www.gov.ie/en/department-of-finance/collections/annual-tax-expenditure-reports-and-tax-expenditure-passports/
The latest published estimates of the cost and number of claims under the scheme are set out in tabular format below.
|
- |
2020 |
2021 |
2022 |
2023 |
2024 |
|
No. of claims |
22,000 |
25,000 |
25,000 |
25,400 |
25,400 |
|
Exchequer cost (€M) |
4.5 |
5.5 |
5.5 |
5.8 |
5.8 |
