Pearse Doherty (Donegal South West, Sinn Fein)
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Question 76: To ask the Minister for Finance further to Parliamentary Question No. 105 of 24 May 2011, the current tax expenditure valued at €400 million which allows the exemption of income arising from the provision of child-care services. [23249/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy refers to a reply given to Parliamentary Question No. 105 of 2011, in which a figure was supplied in error. The correct figures are below:

Section 216C of the Taxes Consolidation Act, 1997 provides for an exemption from income tax for individuals who mind children in their own home. The individual may not mind more than 3 children, excluding their own. The exemption is subject to a limit of €15,000 per annum.

The Revenue Commissioners are currently engaged in updating figures of the cost of tax reliefs for the tax year 2009 for inclusion in their next statistical report. This work is ongoing and not yet complete, but a tentative estimate of the cost in 2009 of the tax exemption for income arising from the provision of child-care services is of the order of €0.8 million in respect of approximately 470 claimants.

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 77: To ask the Minister for Finance the effective rate of corporation tax paid here. [23250/11]

Michael Noonan (Limerick City, Fine Gael)
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There are different ways of measuring the effective rate of corporation tax depending on the variables that are used and it is difficult to determine a general or single reliable comparative measure of an effective tax rate. In responding to questions in the House during the Summer, I mentioned that our effective rate of corporation tax was 11.9%. This figure comes from a recent Paying Taxes study produced by the World Bank and PriceWaterhouseCoopers as part of an annual Doing Business report and includes a measurement of effective tax rates across 183 countries. The effective tax rate is based on the tax obligations of a standardised company operating in each country of the study and using standard assumptions regarding exemptions, deductions and allowances.

Another recent study by the European Commission also indicates that Ireland has an effective corporate tax rate which is close to, or indeed higher than, the statutory 12 1⁄2 per cent rate (because of the higher 25% tax rate that applies, generally, to non-trading profits).

These general findings are to be expected as Ireland's 12 1⁄2 per cent corporation tax regime is transparent, does not discriminate based on company size or ownership and applies across a broad base.

The effective rate of corporation tax paid will vary from company to company, of course, depending on the circumstances in each individual case.

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 78: To ask the Minister for Finance the savings made to the Exchequer if incorporated bodies were no longer allowed to claim losses against profits made in previous years. [23251/11]

Michael Noonan (Limerick City, Fine Gael)
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The availability of relief for losses incurred in a business is a well-established feature of corporation tax, which is in recognition of the fact that a business cycle runs over several years and that it would be unbalanced to tax profits in one year and not allow losses in another. Under Irish tax legislation, a company incurring a trading loss in an accounting year can carry that loss back for offset against profits in the immediately preceding year. The carry back of a trading loss is limited to one accounting year back and there must be profits in that year for the provision to be of use to a company. A trading loss in an accounting year may also be carried forward for offset against trading profits of the same trade in subsequent years. I am informed by the Revenue Commissioners that the potential saving to the Exchequer if future claims by incorporated bodies for losses to be offset against previous year's profits were to be disallowed would depend on the amounts of losses incurred by companies and the extent to which there are profits in the preceding accounting year against which such losses would otherwise be available for set-off. It is not possible to anticipate what these would be.

By way of illustrating this latter point, data from corporation tax returns for 2008 and 2009 (the latest years available) show that for 2008 the amount of trading losses carried back for offset against profits earned in a previous year was €1,573m while the comparable figure for 2009 was a much lower figure of €868m. The actual saving to the Exchequer in respect of those years under the Deputy's proposal would depend on the tax rate applicable to the profits of the companies concerned but assuming that this was the standard 12.5% rate, the savings under the proposal would have amounted to about €200m in 2008 and about €100m in 2009. The Deputy should note, however, that the estimated savings for 2008 and 2009 are not necessarily indicative of what the savings might be for future years. Also, since under the proposal companies could continue to carry forward losses for offset against future profits, the estimated Exchequer savings outlined would be temporary in nature.

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 79: To ask the Minister for Finance the revenue that would be raised for the Exchequer by decreasing the capital acquisitions tax thresholds by 10% across the board and by increasing CAT by 10% on these new thresholds. [23252/11]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the Capital Acquisitions Tax rate by 10%, based on the expected outturn in 2011, could be in the region of €110 million, assuming no change in the existing thresholds. The additional full year yield from existing taxpayers from reducing the existing thresholds by 10% and applying the proposed rate of 35% to the additional amounts thus brought into charge is estimated at €20 million. Revenue do not receive information on gifts and inheritances which currently do not have to be declared so it is not possible to estimate the potential yield if such benefits were brought into the tax net. These estimates are based on transactions recorded in 2010, the latest year for which the necessary detailed information is available.

It should be noted that these estimates are based upon an assumption that there would be no behavioural impact from these changes, which could lead to a less than expected impact on Exchequer yield. In addition, the realization of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.