Richard O'Donoghue (Limerick County, Independent Ireland Party)
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158. To ask the Minister for Finance if there is an increase or a proposed increase in VRT for full electric vehicles; and if he will make a statement on the matter. [18163/25]

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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159. To ask the Minister for Finance if there is an increase or a proposed increase in VRT for plug in hybrid vehicles; and if he will make a statement on the matter. [18164/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 158 and 159 together.

Vehicle Registration Tax (VRT) reliefs for hybrid and plug-in hybrid vehicles expired on 31 December 2020.

VRT category A and B vehicles which are powered only by an electric motor and registered before 31 December 2025 are eligible for relief from VRT up to a maximum amount of €5,000. Vehicles with an Open Market Selling Price (OMSP) of up to €40,000 are granted relief of up to €5,000. Vehicles with an OMSP of greater than €40,000 but less than €50,000 receive a reduced level of relief. Reliefs have been removed for any electric vehicles above €50,000. Series production electric motorcycles are exempt from VRT until 31 December 2025.

In relation to the question of whether there is an increase or a proposed increase in VRT for full electric vehicles or plug in hybrid vehicles, the Deputy will be aware this is a matter which will be considered in the context of the annual Budgetary cycle which includes the presentation of policy options to the Tax Strategy Group. The consideration of policy options takes account of a wide range of issues including climate action commitments, social policy and economic impacts. Tax Strategy Group papers will be published online following their presentation to the Tax Strategy Group.

Brian Stanley (Laois, Independent)
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160. To ask the Minister for Finance the new measures, he plans to put in place in the case of lost revenue given that Trump and the US administration has imposed 20% tariffs; and if he will make a statement on the matter. [18141/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Let me begin by saying that we deeply regret the imposition of tariffs by the US administration. Tariffs are economically destructive; they drive up the cost of doing business, put upward pressure on prices for consumers, all the while creating uncertainty for investment and future growth.

Regarding the specific measures announced on April 2nd, it is important to note that there remains uncertainty surrounding the degree to which the measures will be permanent and what the EU and global response will be. We will continue to work with the urgency that is required to assess how these specific announcements will impact various sectors across the Irish economy, as well as the potential impacts on the public finances.

It should be noted that widespread tariffs are just the latest tool used in the ongoing trend toward de-globalisation, a consideration that Government has had at the centre of its policy agenda for some time now.

Indeed, I have repeatedly highlighted the inherent risks associated with the windfall element of our corporation tax receipts and the importance of ensuring that these receipts are not used to fund day-to-day expenditure. That is why the establishment of the Future Ireland Fund and the Infrastructure, Climate and Nature Fund, funded from these windfall receipts, are so important.

This is a time of considerable international uncertainty. Government is determined to protect our economy, support and protect jobs, and keep our public finances safe. Government will evaluate what steps are necessary to do this, but we need to avoid doing anything that has such a cost that it in turn could create other difficulties down the line. In other words, the policy response needs to be sustainable over the medium-term.

It is important to stress that we are approaching the challenges ahead from a position of strength because of the careful management of our public finances: it is now more important than ever that we maintain a balanced and sustainable approach to fiscal policy.

Shónagh Ní Raghallaigh (Kildare South, Sinn Fein)
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161. To ask the Minister for Finance the correct and fair treatment of unpaid maternity leave in SCSB calculations; and if he will make a statement on the matter. [18218/25]

Shónagh Ní Raghallaigh (Kildare South, Sinn Fein)
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162. To ask the Minister for Finance if he is a policy review to ensure maternity-related earnings are treated equitably in redundancy tax exemptions.; and if he will make a statement on the matter. [18219/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 161 and 162 together.

The Standard Capital Superannuation Benefit (SCSB) is a relief from income tax arising from a lump sum payment connected with the termination of an employment. SCSB is computed at 1/15th of a taxpayer’s average annual pay for the last 36 months in employment. Annual pay in this regard means pay from the employer and does not include any benefits paid by the Department of Social Protection in the previous 36 months, for example, maternity benefit.

In cases where unpaid leave is taken and where there was no salary for a number of weeks in the previous 36 months, an individual is allowed to add other weeks (i.e. weeks from months 37, 38 or 39, etc.) when calculating the average salary over the last three years of continued service. Examples of such periods would include unpaid maternity leave, unpaid paternity leave and unpaid parental leave. This may provide for a higher level of income tax relief under the SCSB that would otherwise be available.

In relation to what the Deputy refers to as redundancy tax exemptions, statutory redundancy payments made under the Redundancy Payments Acts are exempt from income tax. However, ex-gratia payments received on leaving employment may be chargeable to tax under Schedule E, i.e., through the PAYE system. Section 123 of the Taxes Consolidation Act 1997 (TCA 1997) provides for the general tax treatment of payments on retirement or removal from office or employment.

Where an ex-gratia payment is chargeable to tax under Schedule E by virtue of section 123 TCA 1997, the payment may qualify for exemption from tax under section 201 TCA 1997 as follows:

1) Tax free basic exemption - a tax free amount of €10,160, plus €765 per complete year of service.

2) Tax free increased basic exemption - the basic exemption amount may be increased by an additional €10,000, which is available where an individual has not claimed any exemptions under section 201 TCA 1997 in the previous 10 years and is not a member of an occupational pension scheme.

3) Tax free SCSB - this is calculated as outlined above.

The calculation of income tax relief available to an individual in receipt of a termination lump sum payment through either the tax free basic exemption or the tax free increased basic exemption is not impacted by a period of maternity leave prior to the employment being terminated.

The exemptions available under section 201 TCA 1997 are subject to a lifetime limit of €200,000 and the individual may apply whichever of the three exemptions is more beneficial to them.

The Revenue website sets out further information on the tax treatment of lump sum termination payments in the hands of the employee, and that information is accessible at:

www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/index.aspx.

Further information is available in Revenue’s Tax and Duty Manual Part 05-05-19 Payments on Termination of an Office or Employment or Removal from an Office or Employment at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.pdf.

Naoise Ó Cearúil (Kildare North, Fianna Fail)
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163. To ask the Minister for Finance if he considers that the deemed disposable rule is a disincentive to investment; if he plans any changes in relation to this; and if he will make a statement on the matter. [18240/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Finance Act 2000 introduced the gross roll-up taxation regime for investments in domestic funds and life policies. The general thrust of the regime is that there is no annual tax on income or gains arising within the investment. However, exit tax must be deducted on the occurrence of a “chargeable event”, which originally included –

- the making of relevant payments,

- the redemption of the investment, and

- the transfer by an investor of their investment.

Finance Act 2006 introduced the eight-year deemed disposal requirement for all investments that benefited from the gross roll-up regime. This was introduced as a new category of ‘chargeable event’, designed specifically to prevent the avoidance of tax by way of indefinite deferral of tax.

In October 2024, my predecessor published the ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’, a wide-ranging review of the funds and asset management sector. The Report arising from the Review sets out a series of recommendations to ensure that, in pursuit of continued growth in the funds and asset management sector, Ireland’s funds sector framework remains resilient, future-proofed, supportive of financial stability and a continued example of international best-practice. Recommendations 22 and 23 include consideration of the removal of the eight-year deemed disposal requirement for Irish domiciled funds and life products.

The 2025 Programme for Government has committed to progress and publish an implementation plan taking into consideration the Funds Review recommendations to unlock retail investment and opportunities to grow this sector in Ireland. Recognising the complexities within the current regime for the average retail investor, my officials are reviewing options for measures that could be taken to assist with retail participation in capital markets. This work will also take account of developments at an EU level in respect of the Savings Investment Union.