Bernard Durkan (Kildare North, Fine Gael)
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179. To ask the Minister for Finance the degree to which the OECD agreement on corporation profits tax remains; if attempts in some European countries to derail the proposal are ongoing; and if he will make a statement on the matter. [21586/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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On 8 October 2021, Ireland, along with 136 jurisdictions, signed up to a two-pillar International agreement at the OECD/G20 Inclusive Framework on BEPS to address the tax challenges arising from the digitalisation of the economy.

Pillar One will see a reallocation of 25% of residual profits to the jurisdiction of the consumer. The scope is confined to multinational groups with turnover in excess of €20 billion annually. Residual profit is profit greater than 10% of turnover.  Pillar Two provides that the minimum effective rate is 15% for in-scope businesses (MNEs over €750m revenue).

Signatories to the agreement are working intensively at the OECD working parties to reach agreement on the technical detail required to ensure these complex provisions are transposed robustly and in co-ordination by all signatories to the agreement.

In respect to Pillar One, the OECD have divided the work into 14 building blocks which are under development with drafts released for public consultation periodically with a number of building block already gone to public consultation. 

For Pillar Two, Model Rules were published by the OECD in December 2021 and the European Commission subsequently published a legislative proposal, the Minimum Tax Directive, to transpose Pillar Two within the European Union. Ireland has been actively involved in the technical negotiations on the Directive since the start of 2022 and we support the current draft text which is broadly faithful to the OECD agreement. It is hoped that final agreement on the Directive can be reached soon between all EU Member States and this will allow its coordinated implementation in national laws across the EU to proceed.

Mairead Farrell (Galway West, Sinn Fein)
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180. To ask the Minister for Finance his plans to examine the tax treatment with respect to capital acquisition tax for couples who are long-term cohabitants; and if he will make a statement on the matter. [21631/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, for the purposes of capital acquisitions tax (“CAT”), the relationship between the person who provides a gift or inheritance (“the disponer”) and the person who receives it (“the beneficiary”) determines the tax-free threshold (“Group Threshold”) below which CAT does not arise.

Any prior gift or inheritance received by a person since 5 December 1991 from within the same Group Threshold is aggregated for the purposes of determining whether any CAT is payable on a benefit. Where a person receives gifts or inheritances that are in excess of the relevant Group Threshold, CAT at a rate of 33% applies on the excess.  In the case of long-term cohabitants who are not related, the relevant Group Threshold is the Group C threshold, which is currently €16,250.  In addition to this, a CAT exemption may be available in relation to certain gifts and inheritances between long-term cohabitants. 

Firstly, where a cohabitant inherits the family home from his or her deceased partner, he or she may be in a position to avail of the dwelling house exemption.  To qualify for the exemption, the inherited property must have been the deceased cohabitant’s principal private residence at the date of his or her death. This requirement is relaxed in situations where the deceased person left the property before the date of death due to ill health; for example, to live in a nursing home. In addition, the inheriting cohabitant must not have a beneficial interest in another residential property. The inheriting cohabitant must also have lived in the house for 3 years prior to the date of the inheritance and must continue to live in the house for 6 years after that date.  Detailed guidance on the dwelling house exemption has been published on the Revenue website at www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part24.pdf.

In addition to the dwelling house exemption, gifts and inheritances taken by a qualified cohabitant in accordance with a court order made under Part 15 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 are exempt from CAT. Part 15 of that Act provides for a redress scheme whereby court orders can be obtained in certain circumstances in relation to the transfer of property. A “qualified cohabitant” is a person who has been in a committed and loving relationship with another person for a minimum period of 5 years (or 2 years where they are parents of one or more dependent children), whose relationship has ended due to death or separation and neither of whom was married to and living with another person in 4 of the 5 years immediately prior to the end of the relationship.

In relation to the Deputy’s reference to couples who are long-term cohabitants, it is important to note that differences in the tax treatment of the different categories of couples arise from the objective of dealing with different circumstances. Under the law, couples who have obtained legal recognition of their relationship status through marriage or civil partnership are not in an analogous situation to other cohabiting couples, which is why they are not accorded similar tax treatment to couples who have a civil status that is recognised in law.  Any change in the tax treatment of cohabiting couples can only be addressed in the broader context of future social and legal policy development in relation to such couples.

Further information on the taxation of cohabiting couples can be found on the Revenue website, available at www.revenue.ie/en/life-events-and-personal-circumstances/marital-status/cohabiting-couples/index.aspx.

Neale Richmond (Dublin Rathdown, Fine Gael)
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181. To ask the Minister for Finance if he will remove the VAT on automated external defibrillators, replacement pads and batteries; and if he will make a statement on the matter. [21637/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Officials in my Department are currently reviewing the options now available to Ireland in setting VAT rates. This will include consideration of the new options available to Member States  as a result of the recently updated EU VAT rules when setting VAT rates as well as the new limitations introduced on how reduced rates may be applied.

Decisions about tax changes are generally taken in the context of the Budget and, as part of our normal annual Budget preparations. In this context, various options for tax policy changes will be considered by the Tax Strategy Group prior to Budget 2023.