Pearse Doherty (Donegal South West, Sinn Fein)
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91. To ask the Minister for Finance the total amount refunded through the dividend withholding tax refund scheme, the real estate investment trust scheme, or on behalf of the certain non-resident person for refund of dividend withholding tax scheme. [29507/15]

Pearse Doherty (Donegal South West, Sinn Fein)
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92. To ask the Minister for Finance the total amount of income from the real estate investment trust scheme which was not taxed at investor level. [29508/15]

Pearse Doherty (Donegal South West, Sinn Fein)
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93. To ask the Minister for Finance the total value of property held under the real estate investment trust scheme. [29509/15]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 91 to 93, inclusive, together.

I am informed by Revenue  that there are currently four Real Estate Investment Trusts ("REITs") established and operating in Ireland.

The function of the REIT framework is not to provide an overall tax exemption, but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply to property investment via a corporate vehicle. As such, the estimated cost attached to REITs relates not to an exemption from tax, but rather to the move from direct taxation of rental income in the hands of investors, to the taxation of dividends distributed to investors from REIT profits arising from that rental income. The REIT legislation requires that a minimum of 85% of all property income profits be distributed annually to shareholders.

 In answer to the question about the amounts of Dividend Withholding Tax ("DWT") refunded, I am assuming the "amount refunded through the Dividend Withholding Tax Refund Scheme" in context of the question refers to non-resident investors only. In general, distributions (payments) made to non-resident investors by Irish companies are exempt from DWT, where a relevant exemption certificate (proof of non-residency) is supplied by the investor to the company. In cases where the proof of non-residency cannot be provided, the company will deduct DWT. I am informed by the Revenue Commissioners that the total amount of DWT that has subsequently been refunded in accordance with the relevant Double Taxation Agreements ("DTAs") in 2015 is not readily available.  The general exemption for payments to non-resident investors does not apply to payments made by REITs to non-resident investors. However, non-resident investors who are resident in countries with which Ireland has a DTA may be able to reclaim some of the DWT. Claims for such refunds must be made on a specific form and  I am informed by the Revenue Commissioners that the total amount of DWT (which was deducted by REITs on payments to non-resident investors) that has subsequently been refunded in accordance with the relevant DTAs to such investors is €17,083.86.

In answer to the question as to the total amount of REIT income which was not taxed at investor level, the relevant legislation provides that a REIT must return to Revenue details of distributions made where DWT is deducted. As mentioned above, unlike the general rules for distributions paid to non-resident investors, distributions by REITs to such investors are subject to DWT and the non-resident investor will, depending on the national Income Tax rules in his or her country of residence, be subject to tax in that country. Non-resident investors who are resident in countries with which Ireland has a DTA may be able to reclaim some of the DWT, if the relevant DTA permits. Distributions made to Irish resident investors are subject to DWT, deducted by the REIT, in the normal way. Such distributions are subject to Income Tax, PRSI, USC, etc. in the hands of the investor at the relevant rates in the normal way, where applicable, depending on the personal circumstances of the investor. Where appropriate, a credit is given for the DWT deducted against the Income Tax due.

In answer to the question as to the total value of property held by REITs here, a REIT is obliged to file relevant tax returns (VAT, PAYE/PRSI, Corporation Tax, etc.) in the same way as any other company. In addition, it must file an annual statement to Revenue confirming the conditions attaching to being a REIT have been met and is also obliged to file details of DWT deductions on payments made to non-resident shareholders. The legislation does not provide that a REIT must provide information to Revenue as to the total value of property held.

Pearse Doherty (Donegal South West, Sinn Fein)
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94. To ask the Minister for Finance the total annual cost of reducing the value added tax rate for construction activities to 11.5%, for work up to €25,000 in value. [29510/15]

Michael Noonan (Limerick City, Fine Gael)
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The applicable VAT rate varies across different activities within the overall construction sector. I am informed by the Revenue Commissioners that, as the information furnished on VAT returns does not require the yield from particular activities or products to be identified, it is not possible to estimate the VAT yield for the sector mentioned by the Deputy. Accordingly, I am not in a position to provide the projected figures for the reduction of the VAT rate suggested by the Deputy.

I would point out that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. A change in VAT rates must be in compliance with the EU VAT Directive. Article 98 of the Directive limits to two the number of reduced rates a Member State may have. Since Ireland has two reduced rates, the 13.5% and the 9% rate, it would not be possible to introduce a third reduced rate for a category of construction activities as suggested by the Deputy.

As the Deputy is aware, I introduced the home renovation incentive (HRI) in Budget 2014 and extended it to rental properties, whose owners are liable to income tax, in Budget 2015. This incentive came into operation on 25 October 2013 and will run until 31 December 2015. The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence or a rental property. Qualifying expenditure is that which is subject to the 13.5% VAT rate. 

The work must cost a minimum of €4,405 exclusive of VAT, at which level it would attract a credit of €595. Where the cost of the work exceeds €30,000 exclusive of VAT, a maximum credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is paid for.  

The aim of the measure is to increase and improve housing supply at a time when there is strong demand for housing and insufficient supply in certain areas. HRI has been very successful to date. 

The incentive is generating significant employment in the tax compliant construction sector and increasing sales in building supplies, hardware and related businesses. 

I am advised by the Revenue Commissioners that data relating to HRI are available from the statistics section of the Revenue website at . In particular, the data related to HRI are available in the "Tax Expenditures" section of the page at .These statistics will be updated in due course.

Pearse Doherty (Donegal South West, Sinn Fein)
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95. To ask the Minister for Finance the revenue for the Exchequer from the removal of the capital gains tax exemption on the disposal of a life assurance policy under section 593 of the Taxes Consolidation Act 1997. [29511/15]

Michael Noonan (Limerick City, Fine Gael)
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Section 593 of the Taxes Consolidation Act 1997 provides for an exemption from Capital Gains Tax (CGT) in cases where the person disposing of a life assurance policy is the original beneficial owner of the policy. This CGT exemption does not extend to a disposal by a person who is not the beneficial owner of the policy and who acquired the rights or interest in the policy for a consideration in money or money's worth. Any chargeable gains arising on such disposals would be liable to CGT at the current rate of 33%. The Revenue Commissioners do not have the relevant data on disposals of life assurance policies to which the CGT exemption applies that would allow for any reliable estimate of the figure sought by the Deputy. 

However, the Deputy should also note that, since January 2001, an investment in a life policy is taxed under what is known as the gross roll-up taxation regime. This regime allows a policyholder's investment to grow tax-free throughout the term of the policy, subject to a deduction of income tax (commonly referred to as exit tax), from payments made by the life assurance company to the policyholder. The current rate of this exit tax is 41% and it is applied to any gain arising on a payment made to the policyholder, on the redemption, in full or in part, of the policy.

For completeness, I should also mention that in addition to the deduction of exit tax from payments made to policyholders, there is also a further tax provision in place to ensure that policyholders cannot indefinitely postpone taxation by letting their monies accrue on a tax exempt basis in a policy. Under this provision, a taxable event is deemed to take place on the ending of the 8 year period beginning with the date of commencement of the policy, and on every subsequent 8 year period.  This is known as the "deemed disposal".  The effect of this provision is that the life assurance company is obliged to account for tax (at the rate of 41%) on the same basis as would apply if the policy had been redeemed by the policyholder on that deemed disposal date. Whenever an actual payment is subsequently made by the life assurance company to the policyholder, a tax credit is given for the exit tax paid on the deemed disposal event.

The yield from exit tax in 2014 was €130 million.

Pearse Doherty (Donegal South West, Sinn Fein)
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96. To ask the Minister for Finance that given annual return form 1, under the real estate investment trust scheme, which discloses income, etc, the revenue that would be generated from increasing the tax rate on trust income from 20% to 30%. [29512/15]

Michael Noonan (Limerick City, Fine Gael)
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Following discussion with the Deputy's Office, I understand that the Deputy's question is 'To ask the Minister for Finance that given Trust's file annual return Form 1 which disclosed their income and so on, the revenue that would be generated from increasing the tax rate on trust income from 20% to 30%.'

I am informed by the Revenue Commissioners that on the basis of net income tax payments in respect of Trusts, it is tentatively estimated that the yield to the Exchequer that would arise from increasing the tax rate on trust income from 20% to 30% would be in the order of €6m. It should be noted that this estimate refers to the income of Trusts themselves and not the income generated by assets left in trust, which is subject to Income Tax at the standard income tax rate of the beneficiaries.