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 Header Item Written Answers Nos 168-192
 Header Item NAMA Loan Book
 Header Item NAMA Legal Fees
 Header Item Investor Compensation Company Limited
 Header Item Seed Capital Scheme Eligibility
 Header Item VAT Rates Exemptions
 Header Item Carbon Tax Collection
 Header Item Proposed Legislation
 Header Item Contingent Capital Notes
 Header Item Tax Yield
 Header Item Corporate Tax Compliance
 Header Item Tax Rebates
 Header Item Official Engagements
 Header Item European Banking Sector
 Header Item European Banking Union
 Header Item Banking Sector Regulation
 Header Item Banking Sector Remuneration
 Header Item Tax Code
 Header Item Public Investment Projects
 Header Item Bank Debt Restructuring

Wednesday, 16 January 2013

Dáil Éireann Debate
Vol. 788 No. 1

First Page Previous Page Page of 124 Next Page Last Page

Written Answers Nos 168-192

NAMA Loan Book

 168. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Questions Nos. 179 to 182, inclusive, of 16 October 2012, to confirm the original book value of loans sold by the National Asset Management Agency since his response. [1550/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by NAMA that the original par value of loans sold from inception to end-December 2012 is €2.4 billion. I am further advised by NAMA that this is not a metric they would typically release in isolation as it does not reflect the true progress of NAMA’s resolution of its portfolio. I would encourage you to read the 2012 year-end review available on NAMA’s website which provides a more complete picture of NAMA’s progress to date.

NAMA Legal Fees

 169. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Questions Nos. 229 and 230 of 13 November 2012, if he will outline the approach by the National Asset Management Agency in assessing the recoverability of legal fees incurred in pursuit of certain loans and borrowers. [1551/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by NAMA that costs may be recoverable under the terms of the facility or security documentation and therefore are contractually for the account of the debtor. NAMA further advises that legal costs may also be recoverable because they are made expressly for the account of the debtor in new facility or security documentation or as an express condition of NAMA providing support or forbearance to the debtor. Each debtor is assessed for recoverability of all loan balances biannually, 30th June and 31st December, as part of the impairment exercise.

Investor Compensation Company Limited

 170. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 46 of 12 December 2012, and further to a report in a national newspaper (details supplied) which states in relation to Custom House Capital that the collapse of the entity will leave the State out of pocket by €15 million, if he will reconfirm that the Investor Compensation Company Limited is entirely self-funding. [1552/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I can confirm the Investor Compensation Company [‘ICCL’] is 100% funded through annual contributions from the financial services industry. In relation to Custom House Capital Limited (in liquidation) [‘CHC’], the total cost of compensation required to be paid under the Investor Compensation Act 1998, as amended, will be met by the ICCL. None of the liability in respect of the ICCL’s compensation payments to former CHC clients will fall on the State. The Deputy may wish to note that the ICCL’s website www.investorcompensation.ie provides information on how it is funded and also contains a copy of the Annual Report and Audit Accounts of the Company for the financial year ending 31st July 2012.

Seed Capital Scheme Eligibility

 171. Deputy Finian McGrath Information on Finian McGrath Zoom on Finian McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide an update on the possible seed capital for a new business setting up in the the northside; and if he will advise on where finances may be applied for. [1596/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Seed Capital Scheme allows an individual, who makes a qualifying investment in a company, to set off the amount of that investment against his or her taxable income in any of the previous 6 years. The activities of the company are required to constitute a qualifying new venture. The individual is required to take up full-time employment with the company and to hold at least 15% of the issued ordinary share capital for the required holding period, which is usually three years.    The scheme has been considerably simplified for investments made on or after 25 November 2011.

The following is an example of the way the scheme works in the case of an   individual who invests €20,000 in a qualifying company on 01/01/2013:

  The individual may set off the amount of that investment against his or her taxable income in any of the previous 6 years. The individual nominates, say, 2009 as the refund year and makes a claim to Revenue’s Incentives Branch on the relevant forms providing details of the company concerned and the investment. If the individual earned €20,000 in 2009 that was taxed at the higher rate of income tax (41%), where that tax has not been repaid by reference to any other scheme or relief, he or she will receive a refund of tax of €8,200 i.e. 41% of €20,000.

  I understand that the Deputy has asked a similar question of the Minister for Jobs, Enterprise and Innovation who has responsibility for certain State Agencies such as Enterprise Ireland. Further information on possible sources of funding may be set out in the response from the Minister.

VAT Rates Exemptions

 172. Deputy Ciarán Lynch Information on Ciaran Lynch Zoom on Ciaran Lynch asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if, in view of the constraints imposed by the requirements of EU VAT law, he will consider the introduction of a scheme to refund VAT collected on a defibrillator purchased by a sports club or charitable body in view of the public benefit accruing from their being widely available; and if he will make a statement on the matter. [1624/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate, currently 23%. As you are aware, there is no provision in the EU VAT Directive that would make it possible to exempt from VAT or apply a zero rate to the supply of such products. Under the VAT (Refund of Tax) (No.15) Order, 1981 it is possible for individuals to obtain repayment of VAT expended on certain goods and appliances which assist persons with a disability to overcome that disability. In this context, a defibrillator purchased by or on behalf of an individual may qualify for a VAT refund. However, a defibrillator purchased for general use by a sports body or charity would not qualify for such a refund.

  Question No. 173 answered with Question No. 102.

Carbon Tax Collection

 174. Deputy Charlie McConalogue Information on Charlie McConalogue Zoom on Charlie McConalogue asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the mechanism he plans to use to ensure that carbon tax on solid fuels is collected by Northern Ireland based wholesalers of solid fuels selling into the Republic of Ireland market; and if he will make a statement on the matter. [1636/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that the Air Pollution Act, 1987 (Marketing, Sale and Distribution of Fuels)(Amendment) Regulations 2011 (S.I. No. 270 of 2011), made by the Minister for the Environment, Heritage and Local Government, specifies the standards for coal placed on the market and extends the regulatory framework in relation to the distribution and sale of coal in the State. Under the Regulations, all coal suppliers are obliged to register with the Environmental Protection Agency and comply with sulphur content and packaging standards. In particular, the sulphur content of coal that may be sold in the State, which is not more than 0.7% sulphur by weight, is lower than that in Northern Ireland and therefore coal supplied to Northern Ireland standards for sale on that market may not be sold in the State. Compliance with the Regulations will be enforced by the Local Authorities. The Revenue Commissioners, who are responsible for the collection of carbon tax on solid fuels, also advise me that on commencement of the carbon tax provisions under the Finance Act 2010, any Northern Ireland-based wholesaler of solid fuels selling into the market in Ireland will be obliged to register as a supplier and comply with the same regulatory requirements as wholesalers based in the State. Such suppliers will be obliged to make returns on solid fuels supplied in the State in the accounting period concerned and pay the amount of carbon tax due in respect of that supply.

Proposed Legislation

 175. Deputy James Bannon Information on James Bannon Zoom on James Bannon asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if his attention has been drawn to the fact that VAT legislation is preventing tenant purchase funding from being raised and if he will outline his plans to bring forward legislation to deal with this anomaly; and if he will make a statement on the matter. [1641/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I assume that the Deputy’s question refers to the ability of local authority tenants to access funding to cover the VAT-inclusive cost of buying a local authority house where the transaction is liable to VAT. VAT is a European Community wide-tax governed by Council Directive 2006/112/EC and all Member States must ensure their domestic VAT legislation complies with this Directive. VAT legislation in Ireland in relation to property disposals is in compliance with the VAT Directive and applies equally to local authorities and any other person dealing in property. It is not possible to disregard charging VAT on a residential property because the purchase forms part of a local authority scheme.

Contingent Capital Notes

 176. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan following the announcement that negotiations to sell Bank of Ireland Contingent Capital Notes had concluded, if he will confirm the way he ensured that all potential buyers of the CCNs had equal access to all information required to make an investment decision.  [1726/13]

 177. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan following the announcement of his Department on 9 January 2013 that negotiations to sell €500 million to €1 billion of Bank of Ireland Contingent Capital Notes has concluded, if he will confirm if the sale had been discussed by the Board of Bank of Ireland; the date or dates on which it was discussed and if he had been lobbied or received requests from other investors in Bank of Ireland or their representatives urging a disposal of the CCNs. [1727/13]

 208. Deputy Kevin Humphreys Information on Kevin Humphreys Zoom on Kevin Humphreys asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if, in respect of the sale of the €1 billion note of contingent capital in Bank of Ireland, the sale was handled by the National Treasury Management Agency or his Department; if the sale was advertised; the way the sale will impact on the Exchequer deficit for 2013; and if he will make a statement on the matter. [1918/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to answer questions 176, 177 and 208 together.

As announced by my Department last week the State was successful in disposing of its entire €1 billion holding of Contingent Capital Notes (CCN’s) in Bank of Ireland. The transaction followed an initial approach by a number of investment banks to the Department late last year which indicated that there was sizeable investor interest in the State’s CCN instruments and particularly the holding in Bank of Ireland. The Sale was managed by officials in the Department’s Shareholder Management Unit, with many years’ experience working in financial markets and was not only timed to take advantage of the improving sentiment towards Ireland and its banks but the huge rally seen in international debt markets which has continued into 2013.

The transaction when announced saw the State presented with the opportunity to dispose of a minimum of €500 million of its position at a price of par. This stemmed from an underwrite provided by the consortium of banks – UBS, Deutsche Bank and Davy – having done a preliminary assessment of market appetite for the notes. In the end the book build process generated significant excess demand to enable the State to dispose of its entire holding in the bonds at a price of 101% of their par value plus accrued interest. This generated a profit for the State of €10 million. Taking account of the coupon paid to the State last year, the taxpayer has earned a total return of over 15% in the space of 18 months.

My officials had full visibility during the book build and pricing phases and were also provided with some valuation advice from NCB Stockbrokers which helped inform their judgement. The transaction was well received in the market and indeed the bond traded a few points higher in the after-market during its first few days of trading. This reflects a market recognition of a very successful transaction for Ireland, one in which we have exited this element of support to our banks with a profit. It points to a recognition that Ireland is successfully working to correct the very deep failings that have affected us in the past number of years. In recognising this, however, we must also acknowledge that this after market price is for a very small volume of stock compared with the €1bn size of the transaction.

The transaction was settled on Tuesday the 15th of January and the State was paid proceeds of just over €1,056 million, comprising principal of €1,000 million, interest accrued of over €46 million covering the period 29th July 2012 to date, and a profit of €10 million. As we will use the proceeds of this sale to reduce the State’s indebtedness, it will reduce the critically important debt/GDP ratio by 0.6 per cent.

The 2013 Exchequer’s position is improved by the full €1,056 million received plus an estimated additional €38 million debt service saving because of the reduction in the Exchequer Borrowing Requirement giving a gross improvement of €1,094 million. However, this will be offset by the loss of €100m interest that had been due in July 2013. This reduction in anticipated Exchequer receipts means that the net improvement in the Exchequer’s position in 2013 will be just under €1 billion. In 2014, when there will be no further capital receipts or interest income in relation to this coco, the Exchequer effect is estimated to be a reduction of €47m, which is the interest differential on €956 million of borrowings between the Exchequer borrowing rate and the Bank of Ireland interest rate.

The State’s investment in these instruments dates back to the 2011 PCAR exercise, and the successful exit from a large portion of this position represents another step along the road to normalising the State’s relationship with the banking sector. It is government policy to separate the State from its’ banks, a policy which I believe has shared support in this house. This policy will see the State this year remove the guarantee of bank deposits and liabilities which dates back to September 2008 and it also requires us to exit our bank investments over time and when conditions allow. It is true that as the CCN investments were earning the State a generous 10% return per annum, the exchequer will have to forgo this income but will also reduce its risk exposure to the banking sector. The State made this investment only out of necessity and it is pleasing that we have been able to exit this portion of our investment early and profitably.

I can further confirm that I was not lobbied nor received requests from other investors urging a disposal of the CCN’s while Bank of Ireland have informed me that as one would expect with a transaction of this nature, it was discussed and considered at appropriate levels in Bank of Ireland including at the Board. However the Bank does not provide further disclosure on such deliberations.

Tax Yield

 178. Deputy Richard Boyd Barrett Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Questions Nos 189 and 190 of 16 October 2012, the reason his claim that the effective corporation tax rate is 11.9% when in answer to parliamentary questions, his answer showed total manufacturing profits in 2012 at €28,762 million and other trading profits at €41,196 million and a total income figure at €61,034 million, whereas total corporation tax paid was €4,246 million suggesting a far lower effective tax rate; and if he will make a statement on the matter.  [1738/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy has already been advised in Parliamentary Question 190 referred to above, there is no agreed international methodology for calculating the effective rate of corporation tax. In the same answer, to illustrate the debate on the topic, I referred to an estimate from a report produced by the World Bank and PriceWaterhouseCoopers which put the effective rate in Ireland at 11.9% (Paying Taxes, 2013). This comparative report looked at 183 countries and calculated the effective rate based on the tax obligations of a standardised company operating in each country, using standard assumptions regarding exemptions, deductions and allowances. I also referred to a study by the European Commission (Taxation Trends in the EU 2011  ), which indicates Ireland has an effective corporate tax rate which is close to or indeed higher than the statutory 12.5% rate (this is likely because of the 25% rate that applies generally to non-trading income).

  I have been clear that my Department does not take ownership of these reports, but rather have quoted them to give the Deputy an example of the differences that exist in comparative studies on effective tax rates, depending on how the rate is calculated or who carries out the calculation.

  Regarding the figures that the Deputy is referring to in the question above, I should clarify that the figures given in response to Parliamentary Questions 189 and 190 related to 2010 and not 2012.

Such data is contained in the Statistical Reports which are published annually by the Revenue Commissioners on their website – www.revenue.ie  . The Deputy should be made aware that manufacturing and trading profits quoted in the question are the amounts of trading profits before certain trade-related deductions and charges are deducted to arrive at taxable profits, the figure on which the charge to tax is initially assessed on a gross before credits basis. The amount of taxable profits on which gross corporation tax was assessed for the year 2010 was €41,215.6 million and gross tax was €5,422 million.

  Furthermore, it should be noted that certain credits are deducted after the calculation of gross corporation tax. Some of the main credits applicable in the tax year 2010 and deducted after the calculation of gross tax were double taxation relief, manufacturing relief, credit for withholding tax on fees and research and development tax credit. The total net corporation tax which emerged after discounting for all credits was €4,246 million.

  I would refer the Deputy to the tables contained in the response to Parliamentary Question 179, which will shortly be published in the 2011 report on the website of the Revenue Commissioners and which set out the corporation tax figures for 2010 in full.

Corporate Tax Compliance

 179. Deputy Richard Boyd Barrett Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide the most up to date figures on corporate profits declared and corporate taxes paid for 2011 and 2012 including tables CTSI for these years and other tables in the possession of the Revenue Commissioners showing a more detailed breakdown in the application of allowances, deductions and write downs applied to declared profits, reducing the total corporation tax liability; and if he will make a statement on the matter. [1739/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am informed by the Revenue Commissioners that the relevant information is contained in Tables CTS 1,CTS 2 and CTS 3 of the Statistical Reports published annually by the Commissioners and which can be found on the Revenue website at www.revenue.ie. The latest year for which information is published from that source is for 2009 which is contained in the 2010 report.    The corresponding information for 2010 is set out in the following tables. This will be published in the 2011 report on the website. Data for the year 2011 and 2012 is not yet available. Included with these tables is a new explanatory table which outlines the process by which the final liability to corporation tax is arrived at for 2010.

  Explanatory Note Regarding the Calculation of Total Taxable Income Figure Shown in Table CTS3.

The following is a brief explanation of how the total taxable income figure of €41,215m shown in table CTS3 is calculated. In table CTS3 certain allowances, deductions and reliefs are allowed at various points in the table and in some cases in a different panel. For example figures of trading charges are shown in the trading results panel of table CTS3 but they do not affect the calculations shown in CTS3 until after the “deductions” panel preceding the total taxable income figure.

The calculation details all of the deductions and allowances that were actually allowed on the 2010 CT returns against total gross profits before arriving at total taxable income  . It should be noted that the amounts shown for certain allowances such as capital allowances or losses in the table below differ from the amounts shown in table CTS3 as this calculation shows the amounts actually used and absorbed against trading income. Table CTS3 presents the figures as claimed in their entirety. Various credits are also applied after the calculation of gross tax at the various rates but these are not shown but are listed on table CTS3.

  Calculation of Total Taxable Income Figure Shown in Table CTS 3

- €m €m  
Gross Trade Profits   70,804 [The trade profits and balancing charges included in section A of CTS 3]
Less deductible amounts as follows:      
Capital Allowances 12,296   [The portion of capital allowance claims included in section A of CTS3 that are used in the year against trading income]
Plus

Trade Loss Forward
3,870   [The portion of loss forward claims included in section A of CTS3 that are used in the year against trading income. These are called trading losses on table CTS3.]
Plus

Current Year Trading Losses
131   [The portion of current year trading losses claims included in section A of CTS3 that are used in the year against trading income. These are called losses appropriate to this trade on table CTS3.]
Plus

Trade Charges
11,695   [The portion of trade charges claims included in section A of CTS3 that are used in the year against trading income]
Plus

Group Relief
2,747   [The portion of group relief claims included in section A of CTS3 that are used in the year against trading income. This does not include group relief that is used against non-trading income]
Equals

Total amounts deducted
  (30,739)  
Net trading Income after losses, charges and group relief but before non-trade charges and other deductions   40,065 [This is net trading income from section A on table CTS3 after charges, losses and group relief but before and non-trade charges and other deductions]
Gross Rental Income 699   [From section B of CTS 3]
Less Rental Allowances Used      
Rental Losses Forward and rental capital

Allowances
  (152) [The portion of these allowances from section B of CTS3 that are used in the year]
Plus Net Rental Income   547  
Plus Other Profits / Capital Gains   5,849 [From Section C of CTS 3]
Less Deductions      
Management Expenses 415   [From Section E of CTS 3]
Plus

Excess Capital Allowances
15   [From Section E of CTS 3]
Plus

Other Deductions
4,804   [From Section E of CTS 3 – such as non-trade charges including non-trade charges from other group companies]
Plus

Excepted Trade Losses
12   [From Section E of CTS 3]
Equals   (5,246)  
Net Taxable Income/profits   41,215  


   CORPORATION TAX STATISTICS, 2010

  Table CTS1 – Distribution Of Incomes and Tax
Range Of Net Trading Income and Gains (before deductions and charges) - Manufacturing Trading Profits  Other Trading Profits (Including Shipping) Net Trading Income (before deductions and charges) Net Case V (Rent) Regrossed Capital Gains Total Income and Gains( before deductions and charges) Total Taxable Income Tax Due Including Refunds
Negative No.
512
17,893
95,278
4,477
547
17,385
16,297
16,920
or Nil Amnt.(€m)
885.6
7,401.6
0.0
446.9
503.2
4,913.5
3,632.3
245.8
€1  - No.
206
13,622
13,883
270
40
13,871
13,308
12,699
€25,000  Amnt.(€m)
103.1
1,363.5
108.5
8.3
17.5
249.2
173.5
25.8
€25,001  - No.
105
3,519
3,598
119
14
3,596
3,428
3,292
€50,000  Amnt.(€m)
9.4
198.2
128.9
3.5
1.2
151.3
140.4
18.8
€50,001  - No.
74
1,945
2,009
111
11
2,008
1,922
1,869
€75,000  Amnt.(€m)
9.3
170.1
123.2
4.7
8.4
144.7
133.1
19.3
€75,001  - No.
51
1,318
1,356
78
10
1,354
1,288
1,252
€100,000  Amnt.(€m)
7.6
156.6
117.5
3.1
0.5
126.9
116.2
16.6
€100,001  - No.
153
2,663
2,758
182
24
2,757
2,653
2,601
€200,000  Amnt.(€m)
32.8
511.3
392.0
6.4
12.3
434.2
396.6
50.1
€200,001  - No.
65
1,272
1,319
110
16
1,318
1,264
1,238
€300,000  Amnt.(€m)
26.1
387.6
322.7
5.5
1.5
342.2
307.1
37.0
€300,001  - No.
64
694
725
64
11
724
697
687
€500,000  Amnt.(€m)
31.9
224.4
199.6
5.9
1.8
212.2
181.5
21.7
€500,001  - No.
29
295
308
34
4
308
285
285
€600,000  Amnt.(€m)
31.5
183.9
169.4
2.2
0.4
179.7
149.1
17.7
€600,001  - No.
36
246
269
20
5
269
247
243
€700,000  Amnt.(€m)
28.8
199.7
173.4
14.0
2.4
210.2
174.2
20.8
€700,001  - No.
29
187
206
15
3
206
190
186
€800,001  - No.
24
135
149
11
6
149
139
140
€900,000  Amnt.(€m)
53.5
137.6
125.9
0.6
24.7
156.4
138.2
17.7
€900,001  - No.
20
122
134
8
3
134
123
127
€1,000,000  Amnt.(€m)
21.2
141.2
127.5
0.5
0.4
132.2
114.8
13.5
€1,000,001  - No.
233
1,138
1,255
117
23
1,255
1,148
1,143
€5,000,000  Amnt.(€m)
653.9
3,086.4
2,807.4
11.0
29.4
3,259.6
2,671.1
267.5
€5,000,001  - No.
41.0
227.0
247.0
18.0
4.0
247.0
230.0
228.0
€10,000,000  Amnt.(€m)
305.8
1,752.7
1,741.2
4.9
6.3
1,829.8
1,444.0
172.9
Over No.
120
429
463
48
13
463
433
431
€10,000,000  Amnt.(€m)
26,504.8
24,847.7
47,695.2
27.2
29.6
48,264.7
31,073.7
3,256.7
All Cases No. 1,810 46,120 124,404 5,722 738 46,491   44,069 43,756
- Amnt.(€m)
28,762.0
41,195.9
54,637.7
547.5
645.4
61,033.9
41,215.6
4,245.7

CORPORATION TAX STATISTICS, 2010

Table CTS2 - Distribution of selected allowances, reliefs and deductions



Range Of Net Trading Income (before deductions and charges)
 
Manufacturing  Capital Allowances
 
Non-Manufacturing  Capital Allowances
 
Plant and Machinery
Industrial Buildings
Plant and Machinery
Industrial Buildings
Trading Losses Carried Forward
Current Losses
R & D Credit
Total Deductions
Manufacturing Relief
Double Taxation
Other Tax Relief
Negative No.
1,377
402
39,202
1,003
29,896
22,521
139
1,616
0
316
276
or Nil Amnt.(€m)
856.6
76.7
10,810.9
180.7
64,920.9
48,936.0
1.2
1,257.2
0.0
333.3
22.6
€1  - No.
186
48
9,046
124
3,185
529
64
131
176
33
148
€25,000 Amnt.(€m)
68.0
1.4
1,022.0
2.7
441.1
42.8
0.3
68.6
0.0
3.5
0.9
€25,001  - No.
91
31
2,623
57
432
151
26
59
97
18
49
€50,000 Amnt.(€m)
3.8
0.6
55.0
1.2
37.6
8.0
0.1
1.9
0.1
1.4
0.7
€50,001  - No.
69
19
1,509
39
220
77
19
34
71
19
20
€75,000 Amnt.(€m)
3.9
0.3
38.0
1.1
13.1
7.3
0.2
2.3
0.1
0.1
0.5
€75,001  - No.
48
15
994
35
132
36
23
23
48
16
10
€100,000 Amnt.(€m)
2.9
0.2
31.0
0.8
11.8
4.9
0.2
1.4
0.1
0.1
0.7
€100,001  - No.
136
46
2,075
84
239
73
58
65
141
34
20
€200,000 Amnt.(€m)
10.0
1.4
110.5
3.0
25.3
41.1
0.8
5.2
0.4
1.4
0.9
€200,001  - No.
60
23
996
35
86
31
32
42
61
17
9
€300,000 Amnt.(€m)
10.1
1.6
66.2
1.2
13.6
3.9
0.8
6.5
0.3
0.2
0.2
€300,001  - No.
59
27
560
32
50
11
32
31
57
13
13
€400,000 Amnt.(€m)
7.7
0.9
36.4
1.2
8.3
7.6
1.1
4.1
0.4
0.3
1.4
€400,001  - No.
46
20
321
15
29
8
16
25
43
9
3
€500,000 Amnt.(€m)
9.5
1.1
44.5
0.6
9.7
1.8
0.5
12.5
0.4
0.2
0.0

CORPORATION TAX STATISTICS, 2010

Table CTS2 - Distribution of selected allowances, reliefs and deductions



Range Of Net Trading Income (before deductions and charges)
Manufacturing  Capital Allowances
Non-Manufacturing  Capital Allowances
 
Plant and Machinery
Industrial Buildings
Plant and Machinery
Industrial Buildings
Trading Losses Carried Forward
Current Losses
R & D Credit
Total Deductions
Manufacturing Relief
Double Taxation
Other Tax Relief
€500,001  - No.
28
14
232
18
22
7
12
23
23
8
4
€600,000 Amnt.(€m)
17.6
0.8
24.0
0.5
28.4
21.9
0.5
8.7
0.2
0.4
0.0
€600,001  - No.
35
17
193
13
18
7
19
34
32
6
3
€700,000 Amnt.(€m)
7.4
1.2
40.5
0.5
15.9
8.2
1.2
12.2
0.4
0.2
1.2
€700,001  - No.
28
16
140
11
17
11
10
14
25
12
1
€800,000 Amnt.(€m)
9.6
1.1
18.9
0.4
3.8
9.1
0.5
4.5
0.4
0.7
0.1
€800,001  - No.
23
15
116
12
10
2
13
10
21
3
3
€900,000 Amnt.(€m)
21.3
1.8
27.5
0.7
15.1
2.4
1.0
2.0
0.4
0.1
1.2
€900,001  - No.
18
11
97
13
9
3
7
16
19
3
2
€1,000,000 Amnt.(€m)
4.0
0.5
22.1
0.5
11.5
9.2
0.3
5.9
0.4
0.1
0.1
€1,000,001  - No.
223
136
840
109
72
20
115
165
217
98
6
€5,000,000 Amnt.(€m)
133.2
15.6
644.8
7.1
2,766.5
3,308.7
14.2
181.3
10.3
62.1
5.1
€5,000,001  - No.
40
29
158
22
10
8
16
48
36
40
3
€10,000,000 Amnt.(€m)
51.2
7.5
189.1
1.0
85.9
11.4
3.6
141.4
5.1
6.8
0.1
Over No.
117
94
321
76
31
12
86
82
113
113
7
€10,000,000 Amnt.(€m)
916.2
167.1
2,040.9
56.8
445.3
50.4
115.7
3,530.4
384.3
207.6
13.4
All Cases No.
2,584
963
59,423
1,698
34,458
23,507
687
2,418
1,180
758
577
- Amnt.(€m)
2,132.9
279.8
15,222.2
260.1
68,853.7
52,474.6
142.4
5,246.0
403.2
618.6
49.2


Trading Results  
All Companies
   
€m
 
Manufacturing Trading Results  
  Trade Profits
28,762.0
Plus Balancing Charges
23.8
Minus Plant and Machinery Capital Allowances
2,132.9
Minus Industrial Buildings Capital Allowances
279.8
Minus Other Capital Allowances
43.8
Minus Trading Losses
2,963.2
Minus Losses appropriate to this trade
322.0
Minus Charges
9,274.8
Minus Group Relief
56.7
Non-Manufacturing Trade Profits - ( Including Shipping )  
  Trade Profits
41,195.9
Plus Balancing Charges
823.1
Minus Plant and Machinery Capital Allowances
15,222.2
Minus Industrial Buildings Capital Allowances
260.1
Minus Other Capital Allowances
318.5
Minus Trading Losses
65,890.5
Minus Losses appropriate to this trade
52,151.7
Minus Charges
3,118.0
Minus Group Relief
3,225.2
A. Net Trading  Income (before deductions and charges)
54,637.7
Rental Income  
Rental Income
698.5
Plus Balancing Charges
0.8
Minus Losses Carried Forward from Preceeding Acc. Periods
249.6
Minus Rental Capital Allowances
308.4
B. Net Rental Income 
547.5
Interest Arising In The State
Gross Interest Received or Credited
  1,165.7
Plus Taxed Interest
232.2
Foreign Income including Dividends Taxable at 12.5%
3,414.2
Other Income
  Other Income Received Under Deduction of Irish Tax
5.9
Other Income Received without Deduction of Irish Tax
382.4
Plus Other(Foreign Life Policy/Offshore Fund/Income Investment Undertakings)
2.9
Capital Gains (regrossed)
645.4
C. Other Income / Capital Gains
  5,848.7
D. TOTAL INCOME AND GAINS (before deductions and charges)
61,033.9
Deductions  
Management Expenses
414.8
Plus Excess Capital Allowances
14.9
Plus Other Deductions (Including Excepted Trade Losses)
  4,816.3
E. Total  Deductions
  5,246.0
Total Taxable Income
41,215.6
Amount of Income at the 12.5% standard rate
39,053.7
Amount of Income at the 25% non-trading rate
2,159.3
Amount of Income at the other rates
2.5
Gross tax due
  5,422.2
Reliefs
Double Taxation Relief
618.6
Plus Relief for Manufacturing Trade Deductions
6.0
Plus Relief for Other Trading Deductions
137.2
Plus Other Manufacturing Relief
403.2
Plus S 486C TCA
4.6
Plus Other Tax Reliefs
10.9
F. Total Reliefs
1,180.3
G. Clawback of Tax Relief at Source.
34.8
H. Tax less Reliefs plus clawback of tax relief at source.
  4,276.7
Surcharges
24.8
Amounts Payable Under Deduction of Income Tax
47.4
I. Tax less Reliefs plus surcharges
  4,348.9
Research and Development Credit used against Tax this year
142.4
Credits
Income Tax Suffered Credit
74.9
Plus Gross Witholding Tax on Fees
232.3
J. Total Credits
307.2
K.  Tax Payable
4,245.7

Tax Rebates

 180. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the reason full entitlement of refundable income tax was not determined on the basis of income earned in 2009 when they ceased employment so payment in respect of which did not issue until 2010 in the case of a person (details supplied) in County Laois; and if he will make a statement on the matter. [1766/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that all refunds of income tax in relation to the income earned by the individual concerned in 2009 and paid in 2009 have been repaid to the named individual. I am further advised that all refunds in relation to income applicable to 2009 but paid in 2010 have also been repaid to the named individual.

Official Engagements

 181. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he or his officials have met any chief executive officers of the Irish banks recently; and if he will make a statement on the matter. [50872/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan My Officials and I met with three of the covered institutions last week. The Chief Executives were either present or dialled in. Officials from my Department meet with representatives up to and including chief executive officer level of banks operating in Ireland, in relation to a variety of issues, on a regular ongoing basis -including a monthly senior management meeting with each covered institution at which the CEO would usually attend. The "covered institutions" are the Bank of Ireland, Allied Irish Banks, Irish Bank Resolution Corporation and Permanent TSB.

European Banking Sector

 182. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the progress of discussions at EU Council meetings on increasing banking regulation; and if he will make a statement on the matter. [52235/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy will be aware I have responded to a similar question in November 2012. I will therefore limit my response to progress since then. I attended the ECOFIN Council meetings on 13 November and 3 December. At both of these meetings the Cypriot Presidency gave an update on the progress thus far in the negotiations with the European Parliament on the Capital Requirements Directive and Regulation (CRD IV). The two proposals set out to amend and replace the existing capital requirement directives by two new legislative instruments: a regulation establishing prudential requirements that institutions need to respect, and a directive governing, amongst other things, access to deposit-taking activities.

Having recently assumed the Presidency of the EU Council Ireland is currently engaged in trilogue and tripartite discussions with the European Parliament and the Commission on both Capital Requirements Dossiers and on the Single Supervisor Mechanism dossier. It would not therefore be appropriate for me comment further at this stage except to state that in its European Presidency Ireland will be doing all it can to conclude work on these dossiers in the coming weeks.

European Banking Union

 183. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on the points made in the recent speech by Mr Matthew Elderfield in London, England, in relation to the European Banking Authority; and if he will make a statement on the matter. [54055/12]

 185. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if, at the recent EU Council meeting, there was any discussion on a banking union and placing a maximum ceiling on bankers bonuses across the EU; and if he will make a statement on the matter. [54061/12]

 187. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he is concerned about the lack of progress with the consolidation of EU banking plan; and if he will make a statement on the matter. [55451/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 183, 185 and 187 together.

The Deputy will recall that support for the establishment of a Banking Union has been given at the highest political level at Summits of Heads of State & Government of the Euro Area. In September 2012 the European Commission presented legislative proposals for a single supervisory mechanism (SSM) conferring powers on the ECB for the supervision of all banks in the euro area, with a mechanism for non-euro countries to join on a voluntary basis. The SSM is a key element of the Banking Union along with a common resolution framework and national deposit guarantee schemes built on common standards set out in the Capital Requirements Directive and by the European Banking Authority. The Banking Union package is a priority of the Irish Presidency of the EU Council.

The European Council discussed the SSM at its October meeting in the context of a report from President Van Rompuy on work being carried out on the Future of Economic and Monetary Union. The timetable set in the October Council conclusions envisaged agreement being reached on "the legislative framework" for SSM by end of the year. Agreement was duly reached in December 2012 by Ecofin Ministers to establish a Single Supervisor Mechanism under the ECB covering the euro area and open to all Member States. The overall objective is to enforce prudential rules in a strict and impartial manner and perform effective oversight of cross border banking markets.

As regards Mr Elderfield’s speech I note this was delivered in a personal capacity on 26th November 2012 well before the Ecofin agreement was reached in December. Many of the concerns raised in the speech are addressed in the Council December agreement notably in relation to ensuring a balance between rights and obligations for all Member States participating in the new supervisory arrangements and in the voting modalities of the EBA to preserve the integrity of the single market.

The question of placing a maximum ceiling on bankers’ bonuses across the EU is under discussion in the context of deliberations on the Capital Requirements Directive (CRD IV) and the Capital Requirements Regulation (CRR).

Having recently assumed the Presidency of the EU Council Ireland is currently engaged in trilogue and tripartite discussions with the European Parliament and the Commission on both Capital Requirements Dossiers and on the Single Supervisor Mechanism dossier. It would not therefore be appropriate for me to comment further at this stage except to say that in its European Presidency Ireland will be doing all it can to conclude work on these dossiers in the coming weeks.

Banking Sector Regulation

 184. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on whether there should be more distance created between bank regulators and the banks they regulate; and if he will make a statement on the matter. [54056/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Central Bank of Ireland is responsible for financial regulation in Ireland. The Irish Financial Services Regulatory Authority (the Financial Regulator) ceased to exist on 1 October 2010 with the commencement of the relevant provisions of the Central Bank Reform Act 2010, which created a single structure within the Central Bank controlled and managed by the Central Bank Commission. The Central Bank Reform Act gave effect to significant structural changes in the operation of financial regulation in Ireland. The Central Bank (Supervision and Enforcement) Bill responds to the regulatory failures of the financial crisis. The Bill strengthens the ability of the Central Bank to impose and supervise compliance with regulatory requirements and to undertake timely prudential interventions. It also provides the Central Bank with greater access to information and analysis and will underpin the credible enforcement of Irish financial services legislation in line with international best practice. The Bill builds on the new structures provided for in the 2010 Act and will introduce new and revised powers of supervision and enforcement for the Central Bank. The Central Bank (Supervision and Enforcement) Bill is expected to commence committee stage in the Dáil shortly.

In recent years the Central Bank’s level of regulatory activity has intensified with increases in staff numbers and skill levels at the Central Bank. On-site inspections and review meetings have more than doubled. The Central Bank has also taken a number of measures under its “new approach” to banking supervision including reorganizing its banking supervision structures, investing heavily in training all supervisory staff and introducing a new risk assessment regime known as PRISM.

The Central Bank’s Annual Regulatory Performance Statement sets out details of regulatory performance. The most recent Statement for 2011/2012 showed the following developments;

·The Bank made further progress in meeting the targets for the stabilisation and restructuring of the banking sector under the EU-IMF Financial Assistance Programme. It also published the Financial Measures Programme which provided a thorough assessment of the capital and liquidity conditions and needs of the domestic banks.

·The new Probability Risk and Impact System (PRISM) was introduced in 2011 which enhances the Bank’s supervisory approach with a risk based framework making it easier for supervisors to challenge the financial firms that they regulate.

·In terms of consumer protection, addressing mortgage arrears has been a key focus of the Bank’s work in 2011 and 2012. The revised Consumer Code on Mortgage Arrears came into effect on 1 January 2011 which set out the framework which lenders must adapt when dealing with people experiencing difficulties with mortgage arrears.

·Significant work was carried out on fitness and probity standards during 2011 and 2012 which included a fitness and probity review of the directors of the Covered Institutions.

A key element of the Bank’s overall enhanced approach to a more rigorous enforcement regime is the Bank’s new Enforcement Strategy 2011/2012 which sets out the newly established Enforcement Directorate’s risk based regulatory framework. This strategy document sets out the Bank’s statutory objectives, strategies and high level goals for supervisory and enforcement interventions.

  Question No. 185 answered with Question No. 183.

Banking Sector Remuneration

 186. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he has considered capping senior banking officials salaries; and if he will make a statement on the matter. [54060/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Present Government policy on remuneration, at the Covered Institutions which is a development of previous Government policy, dictates that no employee at any of the four institutions may receive annual aggregate remuneration (excluding pension contributions) of more than €500,000. This policy is being enforced as evidenced by the remuneration packages agreed for the respective positions of Chief Executive Officer at AIB & PTSB. The Deputy will be aware that my Department is presently engaged in a Review of Remuneration Practices and Frameworks at the covered institutions. The purpose of the exercise is to thoroughly review all remuneration practices at the covered institutions with the object of simplifying remuneration and compensation structures, discouraging excessive risk-taking and to better align pay and reward to long term value creation.

I am expecting the final report from the consultants engaged in the review to be delivered shortly whereupon I will start consultations with the various stakeholders.

I fully recognise that there is a real public interest in the levels of remuneration at the covered institutions and I have committed to placing the details underpinning the review into the public domain.

  Question No. 187 answered with Question No. 183.

Tax Code

 188. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on whether the decision to decrease the corporation tax in the UK will have any impact here; and if he will make a statement on the matter. [56515/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan My Department is aware of the need to maintain a competitive corporate tax regime and to that end, closely monitors developments in other countries. However, it is not appropriate to single out any particular country or corporate tax system and comment on them in this way. The changes that I announced in Budget 2013 highlight the on-going work by my Department to make sure that the Irish corporate tax offering stays competitive as we work to attract investment and jobs to Ireland. This year, this included further enhancements to the R&D regime and the package of small measures to assist the SME sector (among others). For further information on our regime, I would refer the Deputy to the literature on the Budget Website which is available at http://www.budget.gov.ie/Budgets/2013/2013.aspx  .

  Question No. 189 answered with Question No. 141.

Public Investment Projects

 190. Deputy Kevin Humphreys Information on Kevin Humphreys Zoom on Kevin Humphreys asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he has considered the use of retail bond such as those used in the United State of America like the Liberty Bond to fund infrastructure projects as part of future stimulus packages targeting areas with a potential for strong economic return; and if he will make a statement on the matter. [51429/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan All monies raised through Government borrowing are paid into the Central Fund and used to fund Government spending as approved by the Oireachtas. It has never been the custom to link borrowing to specific projects as to do so would limit flexibility of the Government in managing the State’s finances. The National Treasury Management Agency (NTMA) offers a range of savings products to personal savers under the brand name State Savings. NTMA State Savings products have been an important and dependable component of Government borrowing for many years and make a valuable contribution to the national finances. While the funding raised from State Savings is not ring-fenced for expenditure on a specific project, it does provide an additional source of funding for the Government.

The suite of State Savings products includes Savings Certificates, Savings Bonds, Prize Bonds, the National Solidarity Bond, Instalment Savings and Deposit Accounts such as the Ordinary Deposit Account and the Deposit Account Plus.

The ten-year National Solidarity Bond was introduced in 2010 specifically to allow citizens an opportunity to invest and provide money to the State to stimulate economic recovery and to assist in the maintenance and creation of employment. A four-year National Solidarity Bond was introduced in 2011. The four-year National Solidarity Bond offers a fixed return of 12%, while the ten-year Solidarity Bond offers a return of 45%. Some 47,000 savers have invested a total of over €1 billion in the National Solidarity Bond to date.

Bank Debt Restructuring

 191. Deputy Richard Boyd Barrett Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he made proposals on Ireland's legacy bank debt at the summit on 22 November 2012; and if he will make a statement on the matter. [51352/12]

 192. Deputy Richard Boyd Barrett Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he raised the issue of debt relief for Ireland at the European Union Summit on 13 and 14 December; and if he will make a statement on the matter. [56785/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 191 and 192 together.

The European Council Heads of State summits of 22-23 November and 13-14 December were attended by the Taoiseach and were to discuss the EU Multiannual Financial Framework and economic policy/banking supervision respectively. However, as the Deputy is aware, the Irish Government has been working extremely hard to secure a deal on the Irish bank debt with our European partners and this Government avails of every opportunity to advance Ireland’s position in relation to legacy bank debt with our European partners. Detailed work will continue to ensure that positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer.

This work is one of the Government’s key priorities and will remain a key focus during the EU presidency.


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