Holly Cairns (Cork South West, Social Democrats)
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289. To ask the Minister for Finance his views on reducing VAT for the hospitality sector for the duration of 2021; and if he will make a statement on the matter. [25565/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, in Budget 2021 I announced that the 9% rate of value-added tax would apply from 1 November 2020 to 31 December 2021 to the supply of restaurant and catering services, guest and holiday accommodation and entertainment services such as admissions to cinemas, theatres, museums, fairgrounds, and amusement parks. 

Future tax changes are generally taken in the context of the Budget. Deputies will be aware that my officials prepare a series of papers containing tax options for the Tax Strategy Group to be considered in the context of the budgetary process, alongside a wide range of submissions from various stakeholders and lobby groups.

Holly Cairns (Cork South West, Social Democrats)
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290. To ask the Minister for Finance his views on ceasing the real estate investor tax; and if he will make a statement on the matter. [25577/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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It is presumed that the Deputy is referring to Real Estate Investment Trust regime.

Finance Act 2013 introduced the regime for the operation of Real Estate Investment Trusts (REITs) in Ireland, based on an established international standard. The purpose of the REIT regime is to allow for a collective investment vehicle which provides a comparable after-tax return to investors to direct investment in rental property, by eliminating the double layer of taxation at corporate and shareholder level which would otherwise apply. REITs are required to distribute 85% of all property income profits annually to investors. Dividend Withholding Tax (DWT) at a rate of 25% must be applied to a REIT’s distributions, other than those distributed to certain limited classes of investors such as pension funds and charities as they are more generally exempt from tax.

While not referred to specifically in the Deputies question, the Irish Real Estate Fund (IREF) regime is also of relevance in relation to the Irish property market. Finance Act 2016 introduced the IREF regime to address the use of certain fund vehicles to invest in Irish property by non-resident investors, thereby avoiding a charge to tax on profits arising from Irish real estate. The regime provides that the profits arising to an Irish fund from Irish property remain within the charge to Irish tax. Generally IREFs must deduct a 20% withholding tax on distributions to non-resident investors. Certain categories of investors such as pension funds, life assurance companies and other collective investment undertakings are generally exempt from having IREF withholding tax applied provided the appropriate declarations are in place - again these are generally gross roll-up regimes where tax is accounted for on distribution, for example the taxation of pensions paid out to pensioners.

In 2019, officials in my Department produced a report on REITs and IREFs as respects their investment in the Irish property market.  The report was presented to the Tax Strategy Group and published in July 2019. It provided a basis for policy discussions and the amendments which were introduced in Finance Act 2019.

In relation to REITs, Finance Act 2019 extended the obligation to deduct DWT to include distributions of the proceeds of capital disposals. In addition, the deemed disposal provisions upon cessation of REIT status were restricted to REITs that have been in operation for at least 15 years, in line with the regime's stated objective of encouraging long-term, stable investment in rental property. In relation to IREFs, amendments were made in Finance Act 2019 to prevent the use of excessive debt and other payments to reduce distributable profits, and to prevent the avoidance of tax on gains on the redemption of IREF units. These amendments were made to ensure appropriate levels of tax are paid by investors in Irish property.

Institutional investment in commercial and residential property is critically important to generating additional supply of property in Ireland through forward-funding of development projects, particularly in the area of high-density urban developments such as apartment buildings. Rebuilding Ireland identified the encouragement of the build-to-rent sector as a key factor in improving the rental sector and acknowledged that institutional investors have the potential to provide significant investment in such projects.

However I would note that I do not support the bulk purchase of completed homes by institutional investors, and I am currently working together with the Minister for Housing to develop targeted measures to address this issue, and to direct institutional funding towards developments generating real additional supply for Irish households.

John Lahart (Dublin South West, Fianna Fail)
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291. To ask the Minister for Finance if he has considered VAT exemption for counsellors and psychotherapists that is available for other allied health professionals. [25619/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. Under domestic legislation, professional medical care services recognised as such by the Department of Health and Children are exempt from VAT. Professional medical care services recognised by the Department of Health and Children are generally those medical care services supplied by health professionals who are enrolled, registered, regulated, or designated on the appropriate statutory register provided for under the relevant legislation in force in the State or equivalent legislation applicable in other countries. This includes health professionals registered under the Medical Practitioners Act 2007, the Nurses Act 1985 and those engaged in a regulated profession designated under Section 4 of the Health and Social Care Professionals Act 2005.

Statutory Instrument No. 170 of 2018 (Health and Social Care Professionals Act 2005 (Regulations 2018) of 2 July 2018 designates psychotherapists and counsellors as a regulated profession and establishes the Counsellors and Psychotherapists Registration Board. Professional counselling and psychotherapy services provided by persons registered by this Board are exempt from VAT from the date of their registration.

As the Deputy may be aware, the then Minister for Health, Simon Harris TD, appointed the thirteen members of the Counsellors and Psychotherapists Registration Board with effect from 25 February 2019.

The Board has begun the substantial body of work which must be undertaken before it is in a position to open its registers. Questions on the establishment of the Counsellors and Psychotherapists Registration Board and their progress in opening their register are a matter for the Minister for Health.

Seán Sherlock (Cork East, Labour)
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292. To ask the Minister for Finance if there has been further engagement on tax implications for those in receipt of the €250 SUSI credit. [25634/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I wish to advise the Deputy that the position remains as set out in my reply to his question of 10 February last. 

No further engagement in relation to the issue has arisen.