Mick Barry (Cork North Central, Solidarity)
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185. To ask the Minister for Finance the position regarding a scenario (details supplied). [23363/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that Sections 1017 and 1018 of the Taxes Consolidation Act 1997 provide for married couples and couples in a civil partnership to be jointly assessed for tax purposes.  As the persons concerned are not married or in a civil partnership, the applicable tax credits and rate bands are not available to them.

The basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980) This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income.  

The treatment of cohabiting couples for the purposes of social welfare is primarily a matter for my colleague, the Minister for Employment Affairs & Social Protection, Ms. Regina Doherty TD.

Michael McGrath (Cork South Central, Fianna Fail)
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187. To ask the Minister for Finance the number of pregnant women in 2017 that were in receipt of a company car while on maternity leave, thus incurring a benefit-in-kind tax charge; the benefit-in-kind rules involving pregnant women in receipt of a company car while they are on maternity leave; if there is an allowance to cater for the fact that a pregnant mother's business travel is likely to reduce significantly thus increasing the benefit-in-kind rate from 6% to 12% and to 24%; and if he will make a statement on the matter. [23424/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the information from tax returns and other sources available to Revenue does not provide a basis to establish the number of pregnant women in 2017 that were in receipt of a company car while on maternity leave, thus incurring a benefit in kind tax charge.

I am advised by Revenue that section 121 Taxes Consolidation Act 1997 provides that an employee is chargeable to tax on the benefit arising where, by reason of his or her employment, a car is made available (without a transfer of ownership) to him or her and the car is, in the tax year, available either for that individual’s private use or to his or her family or household.

The taxable benefit is calculated based on the cash equivalent of the use of the car. This cash equivalent is calculated as a percentage of the original market value of the car. The percentage applied varies according to the distance over which the car is used for business purposes as set out in the table below. The original market value of a car is the price which it might reasonably have been expected to fetch if sold in the State singly in a retail sale in the open market, immediately before the date of its first registration.

There is no provision for a reduction in business travel due to absence from work such as maternity leave or illness, as the employee retains the private use of the company car.  However, if the car is relinquished during the period of absence, a relief known as tapering relief may apply.

Tapering relief operates where a car is available for only part of the tax year. In such cases the cash equivalent for that year is adjusted in the same proportion as that part of the year bears to the full year. Cases where a car is made available to an employee for the first time during the tax year (e.g. on taking up employment) or a car is no longer available to the employee during the tax year (e.g. due to cessation of employment) are examples of when this apportionment can apply. In addition, the business kilometres may be “annualised” for the purpose of determining the percentage charge to be applied in the calculation of the cash equivalent of the benefit of the car. The following formula may be applied to determine the annualised business kilometres:

A x B

C

Where:

A = Actual business kilometres

B = Full Year (in days)

C = Part of Year (in days) for which car is available

Comprehensive guidance regarding the tax treatment of a company car is available inTax and Duty Manual  05-04-02.

Michael McGrath (Cork South Central, Fianna Fail)
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188. To ask the Minister for Finance further to Parliamentary Question No. 77 of 1 May 2017, the date the Revenue Commissioners provided guidance to banks on certain benefit-in-kind issues relating to staff and ex-staff of banks here; if he will provide a copy of the advice given to the banks; and if he will make a statement on the matter. [23429/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that all banks are assigned to the Financial Services (Banking) District in Revenue’s Large Cases Division (LCD).   

As I stated in the response to Parliamentary Question No. 77 of 1 May 2017, the legislation concerned, namely, section 122(3) of the Taxes Consolidation Act 1997 (TCA) provides that where a loan is made by an employer to an employee and the loan, or any interest due on that loan, is written off, in whole or in part, then the amount written off is treated as a taxable benefit in the hands of the employee (or former employee where the employee has left the employment). It is the responsibility of the employer, to identify any benefits to staff to which section 122(3) TCA applies and to compute and pay the tax liability.

I am advised by Revenue that it has provided clarification to banks that section 122(3) TCA applies to all taxpayers, including banks engaged in retail banking that provide loans in the normal course of business.  This clarification has been provided on request or discussed at routine meetings held between LCD and the bank.  The matter was first discussed with banks during 2013 and guidance provided on the application of section 122(3) at that time.

A number of banks that provide loans to staff and provide loans to third party retail customers have made LCD aware that, in their view, there are cases where the loans to staff may have been advanced on the same terms as to third party customers and that any debt forgiveness is also on the same terms as to third party customers.  In these cases, provided that the bank can demonstrate to Revenue’s satisfaction that this is the case then Revenue will review the application of section 122(3).  Banks which have advanced this view have been requested to provide documentation on a case by case basis to support their view.

The guidance provided by Revenue to banks is as outlined in the response provided to Parliamentary Question No. 77. If the employee or former employee has only preferential loans from the bank then section 122(3) TCA 1997 applies to give rise to a tax liability on the full amount written off by the bank.  If there are a number of loans, including preferential loans, then, regardless of the order of the write off, the amount written off has to be first set against the amount of any preferential loan(s) outstanding and any tax liability arising on the preferential loan(s), so treated as written off first, has to be paid in accordance with section 122(3) TCA 1997.