Martin Cullen (Waterford, Fianna Fail)

Each year rent supplement is paid in respect of over 900 tenancies where the landlord is living outside the State. The total value of such payments is of the order of €4 million or approximately 1% of total expenditure on rent supplement. Payment is made directly to some 130 of these landlords domiciled outside of the State in respect of approximately 150 such tenancies. The value of these payments is approximately €950,000, which represents at most 0.25% of all rent supplement payments. There is a general obligation on individuals and bodies making payments in respect of rent to landlords domiciled outside the State to deduct withholding tax from such payments and remit the proceeds to the Revenue Commissioners. Where rent supplement is in payment direct to the tenant, that obligation lies with the tenant but rests with the HSE, on behalf of my Department, in the 150 tenancies where payment is made direct to landlords domiciled outside the State. Withholding tax is not deducted at present by the HSE or the Department.

My Department has given details of the 150 landlords living outside the State to the Revenue Commissioners where rent payments were made direct to them in 2006. This information should facilitate the Revenue Commissioners in pursuing relevant inquiries as to the tax compliance position of the landlords in question. Details for 2007 will be provided to the Revenue Commissioners in due course as part of the Department's annual provision of information to the Revenue Commissioners.

Discussions are continuing with the Revenue Commissioners on the need for my Department to put information technology systems in place to apply withholding tax in such a small number of cases and to consider alternative suitable arrangements for applying this tax.

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