Jan O'Sullivan (Limerick East, Labour)
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Question 178: To ask the Minister for Finance the number of private hospitals which have been constructed and which are under construction with the assistance of tax incentives since such incentives were introduced; the number of beds thus provided; and if he will make a statement on the matter. [26312/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The scheme of capital allowances for the construction or refurbishment of buildings used as private hospitals was introduced in the Finance Act 2001 and came into effect in May 2002. Under the legislation governing that scheme hospitals are required to be certified by the HSE as satisfying the qualifying conditions of the scheme. My Department's records show that five hospitals have been certified since the introduction of the scheme. These hospitals have indicated a capacity to provide in excess of 500 beds, including day care beds.

As regards hospitals which are under construction, capital allowances can be claimed for qualifying expenditure on the construction or refurbishment of buildings used as private hospitals only when the relevant facilities have been completed and become operational. Provided hospitals, either planned or under construction, are certified in due course, as private hospitals meeting the necessary qualifying conditions and also satisfy the criteria under the transitional arrangements for the termination of the scheme detailed below, qualifying expenditure can be written off against an investor's tax liability at the rate of 15% per annum for the first six years with the remaining 10% in year seven. It is not possible to say at this point, however, how many hospital projects in the pipeline will qualify under the scheme.

As announced in the budget on 7 April last and as reflected in section 8 of the Finance Act 2009, this scheme is to terminate on 31 December 2009 along with certain other health-related capital allowances schemes, subject to transitional arrangements for pipeline projects. Under the transitional arrangements, if certain qualifying criteria are met, the termination date for qualifying expenditure is extended.

The qualifying conditions depend on the type of work to be carried out and whether or not the work requires planning permission. Where the work to be carried out does not require planning permission, the termination date is 30 June 2010 so long as at least 30% of the construction or refurbishment costs have been incurred on or before 31 December 2009.

Where planning permission is required in respect of the work to be carried out, the qualifying condition for a termination date beyond 31 December 2009 is that a valid application for full planning permission be submitted on or before that date and be acknowledged by the relevant planning authority. In such cases, the termination date for qualifying expenditure in the case of qualifying hospitals is 31 December 2013. Thus, where planning permission for a private hospital has already been obtained, Finance Act 2009 provides for qualifying expenditure to be incurred up to 31 December 2013.