Tuesday, 31 May 2005
Dáil Eireann Debate
202. Mr. Andrews asked the Minister for Finance the number of employers who availed of the benefit in kind tax exemptions on employer’s child care provision; and if he will make a statement on the matter. [17946/05]
I am advised by the Revenue Commissioners that, as taxpayers are not required to provide details of the benefit on the provision by employers of on-site child care facilities in their tax returns, there is no basis on which an estimate of the cost to the Exchequer of this tax exemption, or of the numbers availing of it, can be provided. In the case of employers the expense of providing or subsidising child care facilities for employees is allowable as a deduction in arriving at profits for tax purposes. However, the employer’s tax return of income does not contain an entry in respect of this item and the employer’s profit and loss account does not normally distinguish between this particular expense and other employment-related expenses. In these circumstances, there is no basis on which a reliable estimate of numbers involved can be provided.
203. Mr. Andrews asked the Minister for Finance the cost to the Exchequer to zero rate for VAT purposes the provision of child care facilities; if figures are available regarding the amount of VAT paid by child care providers; and if he will make a statement on the matter. [17947/05]
Minister for Finance (Mr. Cowen): The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Under the sixth VAT directive, member states may retain the zero rates on goods and services in place on 1 January 1991, but cannot extend the zero rate to new goods and services. The provision of child care facilities does not fall into this category and cannot, therefore, be zero rated. I am informed by the Revenue Commissioners that the amount of VAT collected from child care providers cannot be identified in the overall yield of VAT, as the information furnished on VAT returns does not require this to be identified.
Minister for Finance (Mr. Cowen): Accelerated capital allowances of 100% are available for child care facilities under section 63 of the Finance Act 2000. Under the normal self-assessment rules, a person seeking to claim capital allowances in respect of a qualifying building would submit their claim on the appropriate tax return form. Claims for this relief are aggregated in tax returns with other claims, such as with industrial buildings allowances generally or with other capital allowances, and do not distinguish between the reliefs claimed in respect of child care facilities and those claimed in respect of other buildings qualifying for capital allowances. Consequently, it is not possible for Revenue to indicate the level of take-up of the specific incentive relating to child care facilities.
However, as part of ongoing commitments to improve the quality of information available on the costs of tax expenditures generally, the Revenue Commissioners have introduced a number of changes to certain tax forms which will yield additional information regarding the cost of reliefs. Provisions were included in the Finance Act 2004 to underpin these changes. This will provide better data in this area and enable fuller estimates of the tax foregone to be made over time.
205. Mr. Andrews asked the Minister for Finance if he will consider the introduction of enhanced double deductions against tax for child care providers in regard certain areas of expenditure such as staffing and insurance; and if he will make a statement on the matter. [17949/05]
Minister for Finance (Mr. Cowen): I am not in favour of introducing double deductions for tax purposes for any area of the tax code. If double deductions were introduced for the specific types of expenditure suggested by the Deputy, this would inevitably give rise to demands for similar treatment for other areas which would give rise to a significant Exchequer cost. As regards the question of such double deductions in general, while a double rent deduction existed in the past under the 1985 and 1994 urban renewal schemes, it had to be abolished for the present urban renewal scheme because of EU state aid rules relating to operating aid.
206. Mr. Andrews asked the Minister for Finance if he will consider introducing and estimate the cost of, disregarding income of €10,000 in relation to home-based child care providers, based on the model of rent a room relief. [17951/05]
Minister for Finance (Mr. Cowen): It is difficult to estimate a cost for such a proposal which would depend on a number of factors, including take up. There is a need to examine pragmatically what can be done in regard to providing child care support to parents. The introduction of such a scheme would be a matter for consideration in the context of the annual budget and Finance Bill.
Minister for Finance (Mr. Cowen): I am informed by the Revenue Commissioners that the full year cost to the Exchequer of allowing a tax credit of €10,000 to each family unit with children, irrespective of the numbers of children in the unit, would be in the region of €3,400 million. If the tax credit was confined to taxpayers where both parents are working and to single and widowed parents who are working then the cost would be in the region of €2,200 million in a full year.
208. Ms Burton asked the Minister for Finance the number of vessels whose tax liabilities are calculated on the basis of a tonnage tax; and the names of the vessels and amount of tax paid in each year since 2002 in respect of each vessel. [18040/05]
|Accounting Period Ending||Estimated Corporation Tax Paid On Tonnage Tax Profits|
|2002 (less than €50,000)||Negligible|
As regards the names of vessels involved, the Revenue Commissioners obligation to observe confidentiality for taxpayers and small groups of taxpayers would preclude them from giving this information. However, I am informed by the Revenue Commissioners that only four companies are involved and none of them gives rise for concern about the appropriateness of tonnage tax in their circumstances.
209. Ms Burton asked the Minister for Finance the designation of a yacht (details supplied) for tax purposes; if it qualifies to be treated as a passenger ship; and if there are profits arising from its operation to be assessed using tonnage tax. [18041/05]
Minister for Finance (Mr. Cowen): Taxpayer confidentiality requires that a Minister for Finance does not reply to a parliamentary question about the tax affairs of an individual or company, other than when the Deputy is asking the question on behalf of the individual or company. In this instance, it is not clear that this is the case and, in the circumstances, I regret I cannot provide the information requested.
210. Ms Burton asked the Minister for Finance the number of hotels qualifying for tax breaks, built or applied for, in each year since 1998; the cost to the State of the tax breaks per annum in respect of such hotel development; and the highest amount of tax relief for a project in each year. [18042/05]
211. Ms Burton asked the Minister for Finance the number of private hospitals qualifying for tax breaks, built or applied for, in each year since 2003; the cost to the State of the tax breaks per annum in respect of such operations; and the highest amount of tax relief for a project in each year. [18043/05]
212. Ms Burton asked the Minister for Finance the number of nursing homes qualifying for tax breaks, built or applied for, in each year since 1998; the cost to the State of the tax breaks per annum in respect of such operations; and the highest amount of tax relief to such a project in each year. [18044/05]
Claims for the reliefs mentioned in the question are aggregated in tax returns with other claims and do not distinguish between the reliefs claimed in respect of different schemes. Accordingly, the specific information on costs is not currently available. It should be noted that the various relevant capital allowance schemes represent only part of the overall amounts for capital allowances claimed annually, the bulk of which is composed of ordinary business capital expenses and depreciation. As part of ongoing commitments to improve the quality of information available on the costs of tax expenditures generally, the Revenue Commissioners are introducing a number of changes to certain tax forms which will yield additional information regarding the cost of reliefs. Provisions were included in the Finance Act 2004 to underpin these changes. This will provide better data in this area and enable fuller estimates of the tax foregone to be made over time.
Minister for Finance (Mr. Cowen): I am advised by the Revenue Commissioners that correspondence dated 17 May was received from the solicitors in this case on 18 May 2005 with regard to the estate of the person concerned. Certification of form CA 24 was completed on 26 May and forwarded to the solicitors in question.
215. Mr. McGuinness asked the Minister for Finance the likely revenue foregone if all tax bands had been index linked in the past three budgets; and if he will make a statement on the matter. [18155/05]
Minister for Finance (Mr. Cowen): I am informed by the Revenue Commissioners that the cost to the Exchequer, estimated by reference to 2005 incomes, of the change mentioned by the Deputy is €190 million in a full year in addition to the full year cost of €233 million for the increases in the value of the tax bands which were announced in the 2005 budget. The estimated cost of indexation is based on indexing the standard rate bands for 2002 in line with the yearly average inflation rates, per the consumer price index, of 3.5% for 2003, 2.2% for 2004 and an assumed 2.5% for 2005. This amounts to 8.4% on a cumulative basis. The increases in the value of the bands in Budget 2005 ranged from about 4% to 5%. The estimate is provisional and is likely to be revised.
Minister for Finance (Mr. Cowen): The relevant property referred to by the Deputy is set out in section 15 of the Valuation Act 2001 as being a building or part of a building, land or a waterway or a harbour directly occupied by the State, including any land or building occupied by any Department or office of State, the Defence Forces or the Garda Síochána or used as a prison or place of detention.
State-occupied property has traditionally been exempt from rates but central Government made a compensating payment to local authorities by way of a bounty in lieu of rates and the bounty was distributed to local authorities in proportion to the concentration of State-occupied property in their areas. The Valuation Office valued the property for this purpose and the bounty was determined and administered by that office.
This practice continued until 1987, when the bounty, which was then approximately £13 million, was subsumed into the rates support grant and administered by the Department of the Environment. Since that time, the compensation for foregone rates has lost all connection with the valuation system and the property details and
valuations of State-occupied property have not been maintained by the Valuation Office. Accordingly, the information you require cannot be provided.
Minister for Finance (Mr. Cowen): Section 766 of the Taxes Consolidation Act 1997 provides for a tax credit for companies that carry out research and development. This credit was introduced in the Finance Act 2004. The majority of corporation tax returns associated with 2004 accounting periods are not due for filing until the latter end of 2005 and the information requested is, therefore, not yet available.
Minister for Finance (Mr. Cowen): Traders making supplies in the State are obliged to register for VAT where certain turnover thresholds are exceeded or are likely to be exceeded in any continuous period of 12 months. Under EU law, with which Irish VAT law must comply, member states may only increase thresholds in line with inflation. The current thresholds, which were enacted by the Finance Act 1994 with effect from 1 July 1994, are €25,500 and €51,000. The former is in the case of a person supplying services. This threshold also applies to persons supplying a combination of goods and services or goods chargeable at the 13.5% or 21% VAT rates which are produced from zero-rated materials. The latter is in the case of persons supplying goods. Businesses with turnover below these thresholds can register for VAT and those in the service sector particularly frequently choose to do so for business reasons. It is not customary for me to comment on any possible changes to thresholds that may or may not arise in the context of the forthcoming budget.
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