Jimmy Deenihan (Kerry North, Fine Gael)
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Question 271: To ask the Minister for Finance if spouses or representatives who paid tax penalties for deceased individuals should be entitled to a refund similar to the position in Britain in which the UK Government is paying refunds on penalties charged under such circumstances dating back to 1989; and if he will make a statement on the matter. [1271/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have been advised by the Revenue Commissioners that following careful consideration of the matter, they reviewed their procedures in this area and, with effect from 18 March 2008 they implemented revised arrangements for the recovery of penalties in tax settlements involving deceased persons. When the taxpayer dies before a settlement has been agreed with Revenue, Revenue will not seek the recovery of any penalty from the deceased's personal representatives (and will discontinue proceedings for recovery of a penalty if they have been initiated). No legislative changes were involved in these new arrangements although the Finance (No. 2) Act 2008 has since provided a statutory basis for these situations.

I am advised by the Revenue Commissioners that settlements finalised before 18 March 2008 will not be reopened by Revenue. These negotiated settlements, made in good faith by both parties, will generally have involved unreserved letters of offer and acceptance and are considered to be binding. I should point out that where a settlement that includes a penalty element has been agreed between Revenue and a deceased taxpayer prior to his/her death (or where a penalty has been awarded in proceedings finalised prior to the taxpayer's death), and that penalty remains unpaid or not fully paid as at the date of death, Revenue will continue to proceed against the personal representatives of the deceased for the recovery of that unpaid penalty. There is no change to existing Revenue practice in these particular circumstances.

The Revenue Commissioners are satisfied, based on legal advice, that the arrangements in place are fully compatible with the legal and constitutional requirements of this State.

Leo Varadkar (Dublin West, Fine Gael)
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Question 272: To ask the Minister for Finance the tax rules in operation in relation to profit sharing schemes by small and medium size enterprises; if there is an intention to revise such; and if he will make a statement on the matter. [1300/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The legislation governing approved profit sharing schemes is contained in Chapter 1 of Part 17 and Schedule 11 to the Taxes Consolidation Act 1997. The legislation specifies a number of conditions that must be satisfied in order to obtain approval of a profit sharing scheme from the Revenue Commissioners. These conditions relate to the type of trust that must be established, the type of shares that can be used, and the employees who can participate. A detailed guide setting out the rules is available on the Revenue Commissioners' website at www.revenue.ie. These rules apply to all companies establishing approved profit sharing schemes. As with all tax incentives, the rules governing approved profit sharing schemes will be examined by the Commission on Taxation, which is due to provide its report to me in September 2009.