Michael Noonan (Limerick City, Fine Gael)
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Section 12 makes a number of changes in the application of the benefit-in-kind rules. For the removal of doubt, the amendment to section 116 of the Taxes Consolidation Act 1997, which is an interpretation section, clarifies that the benefit-in-kind provisions apply to officeholders as well as to employees. The amendment to section 118 of the 1997 Act updates the legislative references relating to the providers of transport services arising from the Dublin Transport Authority Act 2008 and the Public Transport Regulation Act 2009. In the context of the taxsaver travel scheme and based on a recommendation from the Department of Transport, Tourism and Sport, the amendment also confirms that where a transport provider is licensed to operate on one route, it can offer travel passes on that route only.

The amendments to the salary sacrifice scheme in section 118B are of a technical nature. They confirm that remuneration of an employee which that employee has foregone under a scheme of salary sacrifice, and which is not approved as being exempt under section 118B(2)(a), should be treated as "the payment of emoluments by an employer" rather than as the emolument of the employee, as is currently drafted. This will ensure that regardless of the nature of the salary sacrifice - whether it is the foregoing of income or a reduced level of income to account for the provision of meals or accommodation, for example - it should be subject to tax, PRSI and USC under the PAYE system.

Section 120 of the Taxes Consolidation Act applies the benefit in kind provisions to partnerships, unincorporated societies and other bodies. This is being extended to apply to public bodies. On the advice of the Office of the Attorney General it was considered that the legislation as written needed to be updated for the avoidance of doubt. In addition, where the cost of the benefit provided is borne by a public body, other than the employing public body, this will still give rise to a taxable benefit or a perquisitewhere an employee does not reimburse that cost. Taken together, I assure Deputies that these changes have no implications for the application of benefit in kind provisions as they have been or as they may be applied. The changes arise from the advice of the Office of the Attorney General and are merely intended to provide legal certainty that where benefit-in-kind applies, all employees, whether public or private, are treated in the same manner.

The changes to section 122 of the Taxes Consolidation Act end the specified rates for preferential loans and are the changes announced on budget night. With regard to preferential loans, an employee in receipt of a preferential loan from his employer is charged to income tax on the difference or benefit in kind between the interest actually paid and what the amount would be at specified rates of interest. These rates are being adjusted to better reflect commercial rates. I think that covers the point raised.