Joan Burton (Dublin West, Labour)

I move amendment No. 23:

In page 30, between lines 2 and 3, to insert the following:

23.—(1) Section 1041(1) of the Principal Act be amended by inserting the words "in respect of commercial property" in paragraph (a) after the words "Schedule D" and before the word ", or".

(2) Section 1041(1) of the Principal Act to be amended by inserting the words "in respect of commercial property" in paragraph (b) after the words "terms of the lease" and before the words ", but to a person other than the lessor.".

This amendment was proposed by my colleague, Deputy Ciarán Lynch, of Cork South-Central. I have already mentioned the matter to the Minister and will therefore be brief in the interest of providing time for amendment No. 24. Under income tax law, tenants with foreign-based landlords are obliged to deduct the landlords' tax and remit it to the Revenue Commissioners when paying their rent. A couple of difficulties arise in this regard. Where foreign-based landlords are renting to tenants in Ireland, many of the tenants are not aware of the Revenue requirement and can be held accountable for not paying the tax that should be remitted to the Revenue Commissioners.

As I stated to the Minister previously, there is a problem with the administration of housing allowances and rent supplements in respect of the HSE and county councils. The policy in different local authority areas seems to vary. Councils were supposed to be taking ultimate responsibly in respect of the rental accommodation scheme but the rate of roll-out has been very slow. Under the existing arrangements, and as is the practice in respect of some rent supplements, if the HSE does not want to know who the landlord is and the landlord turns out to be based abroad, the HSE's client, who is paying the rent, has a duty to deduct the tax at source. Very often the client does not know about this.

A case arose in my constituency last year in which rent was being paid to a foreign-based landlord directly by the HSE. The landlord, who was a doctor from the Indian subcontinent, had been living and working in Ireland but had departed. The HSE was merrily paying away money by direct debit into the doctor's bank account. Tax should have been deducted. When the HSE decided to cut off the rent allowance, the tenant only found out several months later when the doctor had a look at his bank account and discovered he was no longer getting the regular payments. The position in which some tenants find themselves where they have a liability under tax law to deduct the tax at source is an important issue, which I ask the Minister to address. Some of the legal advice services have been dealing with this matter for various clients but to date no resolution has been found.

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