Gerald Nash (Louth, Labour)
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356. To ask the Minister for Finance the estimated yield minus costs of prioritising anti-fraud powers in Finance (No. 2) Act 2013 as set out in a comprehensive review of expenditure 2014 (details supplied); and if he will make a statement on the matter. [39914/21]

Gerald Nash (Louth, Labour)
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358. To ask the Minister for Finance the estimated yield minus costs of a compliance project using merchant acquirer data as set out in a comprehensive review of expenditure 2014 (details supplied); and if he will make a statement on the matter. [39916/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 356 and 358 together.

In relation to Question No. 356 , the anti-fraud powers contained in the Finance (no.2) Act of 2013 considerably strengthened Revenue’s capacity to address Excise related risk, including in regard to the use of Marked Gas Oil (MGO). I am advised that Revenue has conducted extensive compliance programmes since that time designed both to deter and detect abuses in this area and to measure the level of illegitimate activity in the market.

Revenue’s subsequent analysis of the impact of the combined measures confirm a very significant reduction in the abuse of MGO. Extrapolating pre-2013 trends against current Excise data strongly suggests that Revenue's compliance activities may have been responsible for reducing fraudulent MGO usage (product that might otherwise have been laundered) and increasing legitimate diesel usage by over 245 million litres per annum. This translates into more than €150 million annually in additional taxes and duties. There has also been a significant fall in the level of so-called ‘fuel laundering’ activity i.e. the removal of markers from duty rebated fuel.

In relation to Question No. 258, I am advised by Revenue that the recorded yield from an initial pilot compliance project, based solely on the use of merchant acquirer data was €2.78m. I am further informed that this initial project established the value of the use of merchant acquirer data, which is now fully integrated into Revenue risk systems and used alongside other information sources to select and appraise cases for compliance interventions. This approach enables Revenue to focus on risk cases while minimising compliance costs for legitimate businesses. Given the integrated nature of Revenue’s approach to a wide range of risk data, it is not possible to accurately attribute individual intervention yields to specific data elements, such as merchant acquirer data, which form part of an overall profile of a taxpayer.

Gerald Nash (Louth, Labour)
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357. To ask the Minister for Finance the estimated yield minus costs of developing systems and structure to support the new EU VAT mini one stop shop initiative as set out in a comprehensive review of expenditure 2014 (details supplied); and if he will make a statement on the matter. [39915/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by the Revenue Commissioners that new EU VAT rules came into effect on 1 January 2015, changing the place where VAT is chargeable in respect of all supplies of telecommunications, broadcasting and electronic services to consumers. VAT on these services is now chargeable where the consumer is located instead of where the supplier is located. This ensures that VAT is payable in the Member State where the services are consumed and removes the incentive for businesses in these sectors to locate in low-VAT rate Member States. As a result of the change, EU and non-EU businesses are required to register and account for VAT in every Member State in which they supply these services to consumers. As an alternative, they can avail of an optional special scheme known as the Mini One Stop Shop (MOSS).

The MOSS scheme is a simplification which allows a business engaged in these supplies to register in a single Member State, to file a single quarterly return and pay its VAT liability for all Member States through a web portal in the Member State of registration. This enables suppliers to avoid having to register and account for VAT in all the Member States to which they make such supplies. The Irish Revenue web portal for MOSS was developed in advance of 2015 with Ireland being the first Member State to make it available to business to register with MOSS. This was successfully promoted by Revenue through engagement with national and international businesses, representative bodies, and with international business media. As a result, the VAT receipts via the MOSS portal exceeded expectations as many businesses supplying these services opted to register under the Irish MOSS portal. The initial estimate of yield for Ireland was €10 million but the actual yield to date is almost €1.2 billion due to the success in promoting the scheme in Ireland as well as to the significant increases in the electronic services market.

Transitional rules for the period 2015-2018 provided that the Member State of registration would retain a percentage of the VAT collected for other Member States, with the retention percentage being 30% in 2015 and 2016, and 15% for 2017 and 2018. The amount retained by Ireland was €805 million in respect of the four-year period 2015-2018 and, to date, an additional €385 million has been transferred to Ireland by other Member States.

The total IT development cost for VAT MOSS was €1.93m, with €1.05m expended in 2014, the remainder being spent in 2015.

The Deputy might also be interested to know that the MOSS scheme, which has worked so well since 2015, has been extended and turned into a One-Stop Shop (OSS) since 1 July 2021. Retention is not part of this extended scheme.

Gerald Nash (Louth, Labour)
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359. To ask the Minister for Finance the estimated yield from increasing the bank levy rate to 100% or to 157% and 200% respectively in tabular form; and if he will make a statement on the matter. [39917/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 126AA of the Stamp Duties Consolidation Act 1999 imposes an annual levy on banks for each of the years 2017 to 2021. Since the levy was introduced in 2003, it has been extended on several occasions and currently applies until the end of 2021. The levy is calculated by reference to the amount of Deposit Interest Retention Tax (DIRT) paid by the bank in a specified year referred to as the “base year”. The levy is designed to produce a fixed annual yield of €150m, which means that whenever the base year (and the amount of DIRT paid) changes, the rate of charge must also be adjusted to maintain this constant yield.

For the years 2019 and 2020, the levy was charged at a rate of 170% of DIRT payable by the bank in 2017 (2017 being the base year for 2019 and 2020). For the year 2021, the levy is chargeable at a rate of 308% of DIRT payable by the bank in 2019 (2019 being the base year for 2021).

There is currently no statutory basis in place for charging a bank levy for 2022. However, were the levy to be extended to 2022, amending the rate to 100% or to 157% and 200%, respectively, would lead to a reduction in overall yield from the levy. This is illustrated in tabular form below, using both 2019 and 2020 as possible base years.Were the levy to be extended to 2022 and the year 2020 used as the base year, it is estimated that the rate would have to be increased to 639%to maintain the annual yield of €150m.However, if 2019 continued to be used as the base year, then no rate change would be required.