Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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To ask the Minister for Finance the tax relief for approved retirement funds in respect of earners if more than €80,000 and for earners more than €100,000; and if he will make a statement on the matter. [42351/12]

Michael Noonan (Limerick City, Fine Gael)
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Approved Retirement Funds (ARFs) are personal investment accounts established with retirement benefit funds as an alternative to the purchase of an annuity. Investment income and capital gains, if any, are exempt from tax in the case of Approved Retirement Funds established on or after 6 April 2000. This tax exemption applies regardless of the value of the fund or the income of the ARF owner. Distributions or withdrawals from ARFs are treated as emoluments, subject to tax under Schedule E, so the amount paid will depend on the marginal rate of tax, USC rate and PRSI class applicable to the individual.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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To ask the Minister for Finance the amount of tax relief foregone by the provision for patent income relief; and if he will make a statement on the matter. [42352/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that the tax relief for patent income and related distributions was abolished in Budget 2011, with effect from 24 November 2010, providing an estimated saving to the Exchequer in a full year of €50 million. The exemption, provided under Section 234 of the Taxes Consolidation Act 1997 (TCA), applied to income received by an individual or company from a qualifying patent. A qualifying patent was a patent in relation to which the research, planning and development work leading to the patented invention was carried out in the State or in another country that is part of the European Economic Area. The exemption was subject to a limit of €5 million on the aggregate amount of patent income qualifying for relief in any one year. An exemption was also provided, under section 141 of the TCA, for dividends or other distributions paid by companies from tax-exempt patent income.

The decision to abolish the relief was made following consideration of a recommendation to this effect in the Report of the Commission on Taxation. The Commission on Taxation was of the view that the exemption for patent income was not an effective measure in incentivising enterprises to engage in research and development activities in Ireland and that it had been used as a tax-efficient means of remunerating employees and directors.