Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

To speak about the amendment tabled, the specific wording proposed by the Deputies would have no effect if incorporated into the Finance Bill. For this reason, I cannot accept it. The proposed amendment is to section 1, which provides for the meaning of words in Part 1. Inserting a definition here does not change the meaning of words in the Taxes Consolidation Act 1997 and, as such, the proposed amendment does not change the operation of this Act.

My officials followed up with the Deputies’ offices following receipt of the proposed amendment with a view to understanding the intended policy outcome. I understand that their proposals may relate to credit servicing firms involved in servicing portfolios of residential loans, including mortgage loans. Any entity that services credit under a mortgage agreement entered into by a consumer falls within the regulatory remit of the Central Bank. Any entity that holds the legal title to credit granted under a credit agreement with a borrower is also subject to the regulatory oversight of the Central Bank. Accordingly, the full legislative and consumer protection framework covers all borrowers, whether their mortgages are managed by a credit servicer or by entities that purchase the legal rights of the creditor under mortgage agreements. This means that where a creditor sells or assigns its legal rights under a credit agreement to another creditor, the consumer protections that were available to borrowers prior to such a transaction remain in place. There is a range of measures to protect consumers who have a mortgage, including the various Central Bank statutory codes of conduct, such as the consumer protection code and the code of conduct on mortgage arrears.

With regard to tax returns, as referred to here, all companies that run a taxable business in Ireland must file an annual tax return with the Revenue Commissioners. As part of that tax return, many companies are required to provide full financial statements in iXBRL format, and the Revenue Commissioners can request full financial statements from those that do not have this filing requirement. There are also long-standing provisions in tax law that place a reporting obligation on a person in receipt of income of more than €3,810 on behalf of another person and under which a non-resident can be charged tax in the name of an agent in the State who carries on the business of that non-resident. The Revenue Commissioners have advised me that where any information required by them is not disclosed in the tax return or financial statements, they have sufficient powers to request the production of any appropriate books or records to satisfy them as to the accuracy of any tax return.

I recognise the difficulties faced by borrowers experiencing difficulty in repaying their mortgages. The tax and expenditure measures in budget 2025 are designed to assist in dealing with increased costs of living. It is encouraging to note that the overall level of mortgage arrears continues to decline and the number of principal home mortgage accounts in long-term arrears at the end of June was a little over 20,000, down from 30,000 in December 2020. The Government has always advocated for the broadest regulatory and consumer protection regime possible and will continue to do so.

Where a loan is sold, the terms and conditions will not change and the rights and obligations of all parties to the mortgage agreement will remain unchanged. I set that out in the context of what Deputy McGrath has asked about. There is a robust framework in place to protect people dealing with issues such as mortgage arrears. The code of conduct on mortgage arrears, CCMA, forms part of the Central Bank’s consumer protection framework and is a key part of the Central Bank’s mortgage arrears framework. The CCMA must be complied with under the law and the Central Bank has the power to take enforcement action against any regulated entity that does not act in compliance with it. The Central Bank continues to supervise compliance with the CCMA and will investigate any issues that arise, including patterns of behaviour that suggest the code is not being followed.

The objective of the statutory code is to ensure regulated entities have fair and transparent processes in place for dealing with borrowers in or facing mortgage arrears. Due regard must be given to the facts of each case, and each needs to be considered on its own merit. Each regulated entity must consider the borrowers’ situations in the context of the solutions it provides, which solutions may differ from firm to firm. The CCMA requires lenders to exhaust the options available from the suite of alternative repayment arrangements offered by them before taking action that may result in follow-on consequences. The CCMA requires regulated entities to have an appeals process in place to enable a borrower to appeal a decision by a regulated entity, including where the borrower is not willing to enter into an alternative repayment arrangement or where the regulated entity declines to offer an alternative repayment arrangement. The appeals procedure must be such as to inform borrowers of their right to refer the matter to the Financial Services and Pensions Ombudsman.

On tax policy, there are no special tax rules related to credit services firms. As such, they are subject to the same taxation rules as any other company carrying on a business in Ireland. This includes the rules in relation to the calculation of profits and gain, the obligation to provide Revenue with financial statements and the obligations to make tax returns or return information in respect of income collected on behalf of third parties. As such, I am not in a position to accept the amendment.

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