Michael Lowry (Tipperary North, Independent)
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Question 168: To ask the Minister for Arts, Sport and Tourism if he has had discussions with the Department of Finance encouraging it to include the caravan and camping providers under the capital allowances scheme; if he will insist on including the sector in the scheme; and if he will make a statement on the matter. [10893/07]

John O'Donoghue (Kerry South, Fianna Fail)
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Taxation matters are a matter for the Minister for Finance. I have been in touch with him and my Department also continues to be in contact with the Department of Finance on the issue. The position of the Minister for Finance is as follows.

Section 34 of the Finance Act 2005 introduced a number of changes to the capital allowance regime for hotels, guest houses, holiday hostels and holiday camps. Guest houses and holiday hostels were specifically brought into the capital allowances regime for the first time. Also, the entitlement to the capital allowances was provided for the first time on the basis of buildings being registered in the appropriate Fáilte Ireland register.

These changes were made to clarify what constituted a building or structure "in use for the purposes of the trade of hotel keeping". This term had been causing problems for a number of years and led to many appeals in relation to "hotel-type" capital allowances being claimed for various types of accommodation facilities — whether or not they were included in any Fáilte Ireland register.

Following the Finance Act 2005 changes, the Revenue administrative practice of granting capital allowances in respect of buildings and structures erected in registered caravan parks was reviewed. As a result of this review and on the basis on which "hotel-type" capital allowances had been put on a statutory footing, it was decided that retention of a non-statutory scheme on behalf of caravan parks was not appropriate.

This non-statutory practice was withdrawn by way of publication in the Revenue Commissioners' Tax Briefing No. 60 (dated August 2005) with effect from 1 January 2006. Allowances in respect of expenditure incurred before that date are not affected.

It is important to be clear that, with the removal of accelerated capital allowances which gave a write-off of capital expenditure over 7 years, the capital allowances now sought would only allow for a write-off over 20 years. I also understand, from the Minister for Finance, that some of the expenditure, that would typically be incurred by caravan park operators, may be eligible as "plant and machinery" expenditure but this would not generally include any buildings or structures. The caravan and camping park operators would be advised to explore the issue with the Revenue Commissioners.