Written answers

Tuesday, 11 November 2008

10:00 pm

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 226: To ask the Minister for Finance further to Question No. 283 of 24 September 2008, if he will correct this anomaly in view of the fact that the amount paid as rent to the local authority under the shared ownership scheme may amount to several hundred euro per month, in addition to the mortgage repayments, and that these homeowners are low-income by definition. [39573/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The position, as set out in my reply to Question No. 283 of 24 September 2008, regarding the application of section 473 of the Taxes Consolidation Act 1997 to rent paid to a local authority under the shared ownership scheme, does not represent an anomaly in the taxation code. Rent paid under the Shared Ownership Scheme is designed to cover the cost to local authorities of financing the rented share in the equity of the house. The benefits to participants in the scheme is that, on redemption, the purchaser only has to repay the initial capital outlay, given that the rent charged should more or less cover the interest charges i.e. the cost of borrowings. Shared ownership rents are not, therefore, comparable to the rents paid by tenants to landlords in the private sector. In addition, under the Shared Ownership Scheme, there is an annual subsidy payable towards rent to lower income households. This graded subsidy is used to reduce the household's annual outgoings and varies from €2,300 to €1,050 on a gross annual household income range of between €13,001 and €28,000.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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Question 228: To ask the Minister for Finance if the income levy will apply to gross income before the deduction of allowances in the case of companies who are engaged in farming; and if he will make a statement on the matter. [39597/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The income levy is applied to individual income earners and not to companies. Full details regarding provisions, in relation to the collection, recovery, inspection of records, and other provisions required in relation to the income levy will be set out in the forthcoming Finance Bill.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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Question 229: To ask the Minister for Finance if the income levy will apply to gross income before deduction of capital allowances in the case of individuals who are self employed farmers; and if he will make a statement on the matter. [39598/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The income levy will apply to all trades and professions at the same rates as will apply to those applying to PAYE and investment income. The income levy will be calculated by applying the appropriate percentage to the self-employed farmer's gross income, after deduction of only those expenses directly associated with the performance of the trade, i.e. in accordance with the normal principles of commercial accounting. However, no deduction will be allowed for capital allowances. More detailed provisions, in relation to the collection, recovery, inspection of records, and other provisions required will be set out in the Finance Bill.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 231: To ask the Minister for Finance the average effective rate of corporation tax paid by companies which were liable to be taxed at the nominal rate of 12.5% in 2007; the number of companies that were in this category; the average effective rate of corporation tax paid by companies which were liable to be taxed at the nominal rate of 10% in 2007; the number of companies that were in this category; and if he will make a statement on the matter. [39626/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the necessary detailed data for accounting periods of companies ending in 2007 is not yet available. However, on the basis of data available for accounting periods ending in 2006, the information requested is as set out in the following table.

Total Number of CompaniesAverage Effective Tax Rate on Taxable Income and Gains
Companies liable to tax at the standard rate of 12.5 per cent.105,86111.5%
Companies qualifying for the reduced rate of 10 per cent on some or all of their profits*2,91210.6%
*Note: Companies qualifying for the reduced rate of 10 per cent are liable to the standard rate of tax on their trading income that does not qualify for the reduced rate of tax and also pay tax at 25 per cent on their non-trading income, if any. The tax used to calculate their effective rate shown in the table includes tax at both the standard rate and non-trading rates where applicable.

Taxable Income and Gains are trading profits less tax depreciation, plus other non-trading income and gains less deductions and reliefs allowed for tax purposes.

The number of companies shown includes all companies with a corporation tax return for accounting periods ended in 2006, whether liable to tax or not.

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