Joan Burton (Dublin West, Labour)
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68. To ask the Minister for Finance the estimated yield in 2018 from restricting the use of losses for banks that received official bailout assistance from the State to 50%; and if he will make a statement on the matter. [39990/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I assume the Deputy is referring to the decision taken in Finance Bill 2013 in relation to Deferred Tax Assets (DTAs). As the Deputy is aware the NAMA Act 2009 introduced Section 396C of the Taxes Consolidation Act (TCA 1997).  The purpose of the section was to restrict NAMA.

Participating institutions in offsetting their losses against a maximum of 50% of their taxable profits in a given year. At the time, the Government had a limited role in the banking system. However, by the introduction of the second Finance Bill in 2013, this measure was considered to have outlasted its initial purpose. As the State then had substantial holdings in the banking sector, constituting 99.8% of AIB shares and 15% of Bank of Ireland shares, Section 396C TCA 1997 was deemed to be acting against the State’s interests.

Hence section 396C TCA 1997 was repealed to support the value of the banks' deferred tax assets and hence their capital ratios and by extension support the value of the State’s banking investments.

It is important to highlight that the provision to allow the carry-forward of tax losses for set-off against future trading profits is available not only for banks but for all Irish corporates. Accordingly, the removal of Section 396C TCA 1997 put the "covered banks" in the same position as other corporates including other banks operating in Ireland.

The Department does not have the information required to calculate the figure requested but I would note that the net impact on tax receipts is a timing measure largely and should not impact on the State’s total Corporation Tax take over time.

To recognise the part that the banks played in the financial crisis, in 2013, the Government also decided that the banking sector should make an annual contribution of approximately €150 million to the Exchequer for the period from 2014 to 2016.  In Budget 2016, the payment of this levy was extended until 2021.  The bank levy is expected to raise €750 million over five years.

Joan Burton (Dublin West, Labour)
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69. To ask the Minister for Finance the mechanism for calculating the bank levy; the way in which it is apportioned between institutions; the yield that would result in 2018 from doubling the value of the levy and individual charge that would apply to each relevant bank; and if he will make a statement on the matter. [39991/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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In Budget 2016, the Minister for Finance committed to extending the bank levy (a form of stamp duty paid by financial institutions) until 2021, subject to a review of the calculation methodology.

This review took place during 2016, and included a public consultation to ascertain the views of stakeholders. Following on from this, it was decided to retain the existing DIRT-based calculation methodology, but to update the base year and corresponding levy rate, in order to protect the €150 million annual yield. Minister Noonan committed to the introduction of a rolling two-year series of base years which will introduce a new base year of 2017 for calculating the levy in 2019 and 2020, and a new base year of 2019 for calculating the levy in 2021. The levy rate may require updating when the base year changes to protect the €150 million annual yield.

The current rate is 59% of the amount paid in DIRT by accounts within each institution in 2015.

Doubling the current rate would give a rate of 118%. If everything else was held equal, a rate of 118% would give an approximate yield of €300 million.

The individual charge that would apply to each relevant bank would depend on the amount paid in DIRT by accounts within each institution in 2015. The individual charge by bank is subject to the requirement to maintain taxpayer confidentiality.