Robert Troy (Longford-Westmeath, Fianna Fail)
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67. To ask the Minister for Finance if he will clarify any current plans to adjust benefit-in-kind taxation; and if his Department currently has plans to substantially increase the taxation levels of benefit-in-kind. [58182/22]

Michael Lowry (Tipperary, Independent)
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73. To ask the Minister for Finance if he has considered delaying the implementation of the new benefit-in-kind regime for company vehicles, which is scheduled to begin in 2023, given the broader context of rising living costs and the fact that these changes will reduce income for workers who require a company vehicle to perform their duties; and if he will make a statement on the matter. [58348/22]

Kathleen Funchion (Carlow-Kilkenny, Sinn Fein)
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74. To ask the Minister for Finance his views on the changes to the benefit-in-kind model regarding company cars proposed in the Finance Bill 2022, given that the proposed changes will now see a significant increase for employees who must use their cars for their work; and if he will make a statement on the matter. [58376/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 67, 73 and 74 together.

For clarity, I did not make any changes in Budget 2023 to existing benefit-in-kind (BIK) provisions that would negatively impact on the application of benefit-in-kind for workers. Rather, I amended two specific measures to further enhance the BIK treatment applicable to employees.

Firstly, the relief provided for in section 112B of the Taxes Consolidation Act 1997 (TCA), which is commonly referred to as the Small Benefit Exemption, was enhanced by increasing both the value and number of qualifying incentives that can be provided tax free by employers under this scheme, from €500 to €1,000 and one to two incentives respectively. This change will apply for the 2022 tax year and subsequent years. In addition, I introduced a higher exemption limit where an employer provides a cargo bike and related safety equipment to an employee under the Cycle to Work scheme, with the BIK exemption limit in respect of a cargo bike and safety equipment increased to €3,000 (with a limit of €1,250 and €1,500 for e-bikes applicable). This measure will apply from the 01 January 2023.

I made changes to the calculation of benefit-in-kind on employer provided vehicles, in section 6 of the Finance Act 2019. This measure is due to commence from 1 January 2023, and it is therefore assumed that the query is referring to the implementation of these new rules applying to the calculation of BIK in respect of employer provided cars to employees, for the tax year 2023 and subsequent years. This is a key part of Government policy to strengthen the environmental rationale behind employer-provided car taxation, as committed to in the Climate Action Plan.

Broadly, new rates of benefit-in-kind will apply to the provision of a company car, from 1 January 2023, which among existing factors will now take into account the CO2 emissions of the car, its original market value and the number of business kilometres travelled annually. Therefore, lower rates of tax will generally apply to cars that are more environmentally friendly. The early announcement of this measure in Budget 2020 was purposely provided to send an advanced signal to industry and allow for typical lease renewal periods of approximately 3 years.

I have no proposals to make any change to the new BIK regime.

Finally, I am advised by Revenue that further information on the taxation of employer-provided vehicles is included in Tax and Duty Manual Part 05- 01-01b, which is available on the Revenue website.