Written answers

Friday, 16 September 2016

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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245. To ask the Minister for Finance the amount of the corporation tax overpayments announced to date in 2016 his Department expects will be reclaimed later in 2016; and if he will make a statement on the matter. [24993/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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At the time of the publication of the 2016 Stability Programme Update (SPU), I indicated that around €300 million of the then over-performance recorded in corporation tax could be attributed to a number of large unexpected payments from a small number of companies.  This was based on provisional information furnished to the Revenue Commissioners at the time of the SPU.  I also pointed out that these payments may be repaid over the course of the year.

Overpayments of preliminary tax can result in subsequent repayments or alternatively in situations where the overpayments can be offset against future preliminary tax payments. Instances where companies may overpay preliminary tax can arise due to a broad range of reasons.  However, the main reason for overpayments of preliminary tax is that companies must estimate their expected profits before the end of accounting period when calculating preliminary tax.  For example, for companies with a tax liability not exceeding €200,000, in the previous accounting period, preliminary tax is payable in one instalment 31 days before the end of the accounting period.  However, Finance (No.2) Act 2008 provides for the payment of preliminary tax by large companies with a tax liability of more than €200,000, in the previous accounting period, in two instalments, payable in the sixth month of the accounting period and in the eleventh month of the accounting period.

Profits may deviate from forecasts for a number of reasons, if for example trading conditions improve or a company's circumstances change.  

Finally, I am informed by Revenue there is no basis on which to estimate the final amount by which corporation tax preliminary tax may be overpaid in the current year or when it may be reclaimed. On occasion, Revenue case managers become aware of issues that lead to repayments and this is shared, without revealing the identity of the particular companies affected, with my Department to assist with forecasting and Exchequer reporting.

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