The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., this afternoon met with US Secretary of the Treasury, Steven T. Mnuchin, as part of his official visit to Washington DC. The meeting was an opportunity to discuss the strong bilateral economic and trade relationship between Ireland and the US, as well as the global economy and the international economic outlook.

Speaking after the meeting, Minister Donohoe said:

“I have had a productive discussion with Secretary Mnuchin on our bilateral relations, including the strong two-way trade and investment relationship our countries enjoy. We discussed the jobs US investment supports in Ireland, and Irish investment supports in the United States. I impressed on Secretary Mnuchin the importance the Government attaches to finding a solution to the issues faced by Aughinish Alumina.

We also discussed the global economic situation, EU-US relations, and the importance of pursuing global solutions in relation to taxation. The United States is an important partner for Ireland, and I look forward to continuing to work closely with Secretary Mnuchin and his colleagues on these and other issues.”

During his visit, Minister Donohoe will also meet with Chairman of the Council of Economic Advisors, Kevin Hassett; Director of the Office of Management and Budget, Mick Mulvaney, and Deputy Director of the National Economic Council, Clete Willems.

 

ENDS

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, will travel tomorrow (Monday) on an official visit to Washington D.C.

 

The Minister will meet with key members of the US Administration, including Secretary of the Treasury, Steven Mnuchin, and Chair of the Council of Economic Advisors, Kevin Hassett. Discussions will focus on our bilateral economic relationship with the United States, EU-US relations post Brexit, as well as trade and taxation issues. Minister Donohoe will also meet with the Managing Director of the IMF, Christine Lagarde, and the CEO of the World Bank, Kristalina Georgieva.

 

In a public address to the Peterson Institute for International Economics scheduled for Tuesday, Minister Donohoe will speak about Ireland, Brexit, and the future of transatlantic relations. He will also set out the two-way trade and investment relationship that Ireland and the US enjoy, and highlight Ireland’s commitment to tackling taxation challenges, especially in the global context.

 

Speaking in advance of his visit, the Minister said: ‘The main objective of this visit to Washington DC, is to engage at the highest levels of the US Administration, as well as with senior members of Congress, on vital issues for Ireland, such as, international trade, transatlantic relations and a global approach to taxation’.

 

“The US is an important partner for Ireland; Irish companies continue to invest in the US, and American investment supports jobs in Ireland. I look forward to discussing how to further strengthen this two-way relationship, as well as to meeting some of the many friends of Ireland on Capitol Hill.”

 

ENDS

Outline of itinerary in Washington DC:

  • Meetings with key figures in the US Administration, including Secretary of the Treasury, Steven Mnuchin, and Chairman of the Council of Economic Advisors, Kevin Hassett;
  • Meetings on Capitol Hill, including with incoming chair of Ways and Means Committee Congressman Richard Neal (D-MA);
  • Meetings at the IMF and the World Bank;
  • Public address to the Peterson Institute for International Economics;
  • Meeting with US Chamber of Commerce CEO Tom Donohue and with Chamber members.

 

Thursday, 6th December 2018

 

HBFI Bill signed into law enabling the financing of up to 7,500 residential units over the coming years

 

The commencement order for the Home Building Finance Ireland Act 2018 was signed by the Minister for Finance and Public Expenditure and Reform Paschal Donohoe TD yesterday (Wednesday), following the signing of the Bill into law by the President earlier this week. The enactment of this legislation allows for the establishment of Home Building Finance Ireland (HBFI) as a new company which will finance commercially viable residential developments within the State.

 

Welcoming the enactment of the HBFI legislation Minister Donohoe said;

 

“The passage of this legislation lays the foundations for HBFI to begin lending and financing new homes. With €750 million of funding available from the Ireland Strategic Investment Fund HBFI will be endowed with the capacity to make a meaningful impact in bridging the shortfall in the supply of housing in Ireland.

 

Now that this important legislative hurdle is cleared, the focus will turn to ensuring that HBFI hits the ground running as soon as possible. HBFI’s website will be launched in the coming weeks, where prospective borrowers can receive more information on loans which will be available. HBFI will commence accepting loan applications by the end of January 2019.”

 

Minister for Housing, Planning and Local Government Eoghan Murphy TD also noted the positive impact HBFI will have on the State’s residential market.

 

“The lack of access to debt funding has been identified as a considerable obstacle for many smaller and medium sized builders and developers. This scheme will be of particular benefit to those firms by providing the credit needed to realise the potential of their viable residential sites. The additional finance provided by HBFI, along with other initiatives laid out in Rebuilding Ireland, will help boost residential construction across the country.”

 

Michael Broderick, HBFI Project Lead, said:

 

“The enactment of the legislation creates the necessary conditions for HBFI to come into effect and the HBFI project team is on schedule to deliver what the Oireachtas has mandated HBFI to do – creating a vibrant, effective organisation that will help to fill the financing gap that currently exists for commercially viable small and medium residential developments in areas of high demand.”

 

 

A copy of the legislation as passed by the Oireachtas can be found at:

 

https://www.oireachtas.ie/en/bills/bill/2018/58/

 

 

Notes for editors:

HBFI will be established as a Designated Activity Company (DAC) for the purpose of lending money to finance commercially viable residential developments within the State. The new company will be an independent entity, with its own board and CEO and the Minister of Finance will be the sole shareholder.

 

HBFI is envisaged as a temporary entity and its operations will be reviewed regularly to determine whether it has achieved its objective of addressing the shortfall in the supply of housing within the State.

 

The loans provided by HBFI will be at commercial market equivalent rates and will not constitute cheap or subsidised funding for developers. The terms of each loan will be assessed upon the risk profile of each project, the quality of collateral and the creditworthiness of each applicant.

 

The Ireland Strategic Investment Fund (ISIF) will provide €750 million in funding to HBFI (€20 million in equity and €730 million in loans) which will enable HBFI to finance up to 7,500 residential units over the coming years.

 

An official launch for HBFI will take place in late January 2019.

 

The Home Building Finance Act 2018 also contains a number of technical changes in relation to the collection of Local Property Tax (LPT). These changes mirror those already enacted in Finance Act 2017, allowing for the continued collection of LPT in line with PAYE modernisation due to come into effect 1 January 2019 and also extend Mortgage Interest Deferral Relief for LTP for qualifying persons until the end of 2019.

 

Higher than expected corporation tax receipts to be used to improve deficit, better positioning Ireland for the future 

  • Taxation receipts up considerably in November, mainly due to very strong performance of corporation tax receipts;
  • Corporate tax receipts reflect higher levels of corporate profitability in the economy;
  • For the year to end-November, total tax receipts were €51.4 billion;
  • Expenditure is marginally ahead of profile.

Exchequer figures published today (Tuesday) by the Department of Finance show that taxation receipts for the month of November were €631 million (7.3 per cent) ahead of target.  Tax receipts in November were €938 million (11.3 per cent) higher than in the same month last year, mainly due to very strong corporation tax receipts.  November is the most important month of the year for corporation tax collection.  These data are consistent with figures from the Central Statistics Office which show an increase in corporate profitability this year.

Welcoming the figures, the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D., said: “At the time of the Budget last October, I announced that corporation tax receipts would exceed original expectations.  The actual figures for November follow a very strong performance in October, and this means that corporate tax receipts for this year will outperform our most recent expectations.”

“These additional receipts are not being used to finance additional expenditure.  Instead, all of the excess will be set aside to reduce – and possibly eliminate – the headline deficit, putting Ireland in a stronger position and better able to meet the challenges that may lie ahead.”

“Some of the increase in corporate tax receipts this year is due to one-off factors, which was signaled at Budget time and will not be repeated.  For next year, my Department has taken account of this and has projected a decline in corporation tax receipts for 2019; expenditure plans have been set on this basis.  Having said that, I am conscious of the increasing concentration of overall taxation revenue on corporation tax receipts and I intend to bring to Government in the new year a set of proposals on how this can be addressed.”

On the spending side, gross voted expenditure to the end of November is €56.0 billion, €73 million ahead of profile.

Minister Donohoe stated: “Public expenditure is being managed within expectations and the annual increase reflects the Government’s commitment to the delivery of improved public services.  It also reflects the importance the Government attaches to addressing infrastructural bottlenecks in order to boost resilience – especially important given the UK’s forthcoming exit from the European Union – and to maintain continued improvements in our living standards.”

Fiscal Monitor November 2018

ENDS

Tuesday, 4th December 2018

Note to editors:

Around €700 million of the corporation tax receipts for this year is assumed to be ‘one-off’ and does not recur next year.

National accounts data show that corporate profitability (after allowance for depreciation) rose by 20 per cent in the first half of this year.

 

Tuesday, 27th November 2018

 

Minister Donohoe appoints Ms. Maeve Carton as Chairperson of the National Treasury Management Agency (NTMA)

Minister thanks outgoing chair Mr Willie Walsh for exceptional contribution to NTMA

 

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has today (Tuesday) announced the appointment of Ms. Maeve Carton as the Chairperson of the National Treasury Management Agency (NTMA) effective from 1st January 2019. 

 

Ms Carton succeeds Willie Walsh who will stand down at the end of the year.  

 

Ms Carton is a former Director and Board Member of Irish-headquartered global building materials group CRH plc, where she held a number of senior executive roles, including Group Finance Director and Group Transformation Director. 

 

Ms Carton has been a member of the NTMA Board since the board was established in 2014, following the enactment of the National Treasury Management Agency (Amendment) Act 2014 which introduced new corporate governance arrangements for the Agency. 

 

Commenting on the appointment, Minister Donohoe said: “Maeve Carton brings outstanding international financial and corporate governance expertise to the role of the Chairperson of the NTMA and I wish her well in the role.”

 

“I thank outgoing Chairperson Willie Walsh for his exceptional contribution to the NTMA over the past five years both as Chairperson of the Agency and before that as Chair of its Advisory Committee.  Over that time he oversaw important and far reaching changes in the Agency’s corporate governance and has ensured that it is well positioned to carry out the wide range of complex and challenging mandates it performs on behalf of the State.”

 

“I will now begin the process of appointing a new member of the NTMA’s Board through the Public Appointment Service.”

 

ENDS

 

Tuesday, 27th November 2018

 

Minister Donohoe welcomes agreement between Revenue Commissioners & Maltese tax authority to prevent ‘Single Malt’ structure

 

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Tuesday) welcomed the publication by the Revenue Commissioners of a Competent Authority Agreement that has been reached with the Maltese authorities. 

The Competent Authority Agreement outlines the shared understanding of the authorities in Ireland and Malta that the BEPS Multilateral Convention on Tax Treaties will, once it is in effect in both jurisdictions, make clear that it is not the purpose of the bilateral Ireland-Malta Tax Treaty to enable an aggressive tax planning structure referred to as the ‘Single Malt’. This Agreement will ensure that the Treaty does not enable that aggressive structure.  
 

Commenting on the Agreement, Minister Donohoe said: ‘While I am confident that US tax reform has already significantly reduced the concerns around the Single Malt structure, I had asked officials to examine any further bilateral action that may be needed.  I am pleased that this agreement has been reached which should eliminate any remaining concerns about such structures. This is another sign of Ireland’s commitment to tackling aggressive tax planning, as set out in Ireland’s Corporation Tax Roadmap’.

The Competent Authority Agreement will be effective as soon as the BEPS Multilateral Convention is in effect for both Ireland and Malta.  Ireland is taking the last legislative steps to ratify this Convention in the Finance Bill 2018 and intends to deposit the final documents with the OECD in early January. 

Ireland remains committed to tax reform implemented at the international level, to address mismatches between jurisdictions and to continue the implementation of new robust global standards that are sustainable in the long run.

ENDS

 

Notes for Editors

Concerns have been raised about an aggressive tax planning structure which may have involved some multinationals using a company incorporated in Ireland but tax-resident in Malta.  While US tax reforms introduced at the end of 2017 should have substantially reduced the benefits of operating this type of structure, Minister Donohoe asked officials to investigate what action was needed domestically or bilaterally to resolve any remaining concerns.

Discussions with Malta have been ongoing and have now resulted in a Competent Authority Agreement being reached.  A Competent Authority Agreement is an agreement between the tax authorities in two countries on the interpretation or application of a tax treaty between those countries, which is a treaty intended to avoid double taxation arising. Typically, the Mutual Agreement Procedure Article of such a bilateral tax treaty facilitates entering into this type of agreement.

 

 

 

Minister Donohoe welcomes CSO figures pointing to continued employment growth

 

  • Employment in the third quarter of 2018 increased by 66,700 (3.0 per cent) relative to the same quarter in the previous year;
  • Full-time employment increased by 44,200 (2.5 per cent) over the same period;
  • The level of employment (2,273,200) is now at its highest level ever.  Employment growth has now been recorded in the last 25 consecutive quarters.
  • The increase in employment remains broad based with annual gains across most sectors and regions recorded by the CSO.

 

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has welcomed the Labour Force Survey (LFS) data published today (Tuesday) by the CSO which shows continued strong momentum in the labour market. Minister Donohoe said annual jobs growth of 3 per cent was reported in the third quarter of 2018. This means there are now 2,273,200 people employed; the highest level ever.

Welcoming the figures, Minister Donohoe said: ‘Today’s figures confirm the continued strength of the labour market. The number of people at work continues to increase, with 66,700 additional jobs created over the year to the third quarter of 2018.  There are now more people at work than ever before, with 2,273,200 people now in employment in Ireland. This is further evidence that the economy is performing well, that Government policy is working and that jobs-rich growth is being generated’.

“We have now seen 25 consecutive quarters of employment growth and, crucially, employment growth remains broad-based, with annual gains recorded in most sectors and regions. In parallel, unemployment continues to fall, with the unemployment rate reaching 5.5 per cent in October; the lowest rate since the beginning of 2008. Encouragingly, we are still seeing declines in long-term unemployment.

“While there are now more people at work than ever before, the Government’s job does not end here. We are now moving into the next phase of Ireland’s economic development. We must continue to implement labour market policies to further to support continued participation and engagement with the labour market, while working to safeguard the gains we have made in competitiveness in recent years. Increasingly our focus should not only be on job creation alone but also on the sustainability and productivity of jobs into the future. The forthcoming Future Jobs Programme 2019 will present a new strategic approach to sustainable economic growth and job creation as we approach full-employment. My ministerial colleagues and I will be engaging with stakeholders at the Future Jobs Summit this Thursday (November 22nd) in the Aviva Stadium ahead of the launch of the new strategy.”

Ends

Note to Editors:

  • On a seasonally adjusted basis, employment increased by 0.5 per cent (+10,700) to 2,265,000 from the second quarter of 2018.
  • The largest employment increases in the third quarter (in annual terms) were in construction (+17,900) and administration and support services (+12,500).

 

Minister Donohoe initiates public consultation to improve corporate anti-tax avoidance measures

Govt committed to delivering programme of corporate tax reform to ensure robust and sustainable policies in place

 

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today launches a public consultation on the hybrid mismatch and interest limitation measures to be introduced as part of the implementation of the Anti-Tax Avoidance Directives (ATAD and ATAD2). 

The ATADs are legally binding instruments which Member States have agreed at EU level to introduce key OECD BEPS actions in a consistent manner.  

Tax policy issues detailed in this public consultation will form part of the Minister’s considerations of the transposition of the ATADs into national law. A list of questions on the anti-hybrid and interest limitation provisions of the ATADs is provided for guidance. The public and interested stakeholders are now invited to give their views on these implementation issues.

Commenting on the public consultation, Minister Donohoe said:

 

“Ireland remains committed to tax reform implemented at the international level, to address mismatches between jurisdictions and to continue the implementation of new robust global standards that are sustainable in the long run. This public consultation marks another step in delivering the programme of corporate tax reform detailed in Ireland’s Corporation Tax Roadmap and is an opportunity for interested parties to contribute to the development of new policy in what is a complex area.”

 

The consultation period will run from 14th November 2018 to 18th January 2019. Any submissions received after this date may not be considered.

The preferred means of response is by email to: ctreview@finance.gov.ie

 

Alternatively, you may respond by post to:

 

Hybrids and Interest Limitation – Public Consultation,

Tax Division,

Department of Finance,

Government Buildings,

Upper Merrion Street,

Dublin 2.

Tuesday 13th November 2018

 

Minister Donohoe welcomes publication of the Review of the Code of Conduct on Mortgage Arrears
 
Code deemed to be working effectively and as intended for borrowers who engage with the process

 

Earlier this year, in March, arising from concerns in relation to loan sales, the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, requested the Central Bank of Ireland, under Section 6A of the Central Bank Act, 1942 (as amended), to carry out a review of the Code of Conduct on Mortgage Arrears (CCMA) to ensure it remains as effective as possible. 

 

The key finding of the Report is that for borrowers who engage with the process, the CCMA is working effectively and as intended in the context of the sale of loans by entities regulated by the Central Bank*. 

The Central Bank will continue to assertively supervise regulated firms’ compliance with the Code and will track how long and short-term arrangements are being applied to borrowers over time.

 

Although strategy, commercial decisions and contractual rights of entities regulated by the Central Bank cannot be interfered with, the Central Bank has committed to investigating any patterns of behaviour it becomes aware of that suggest the CCMA is not being followed. It will engage with industry on providing more information to borrowers on the assessment of their case and the reasons why arrangements considered, and not offered to the borrower, are not appropriate and not sustainable for the borrower’s individual circumstances.  Consequently, the Central Bank is not proposing any changes to the Code of Conduct on Mortgage Arrears in the immediate future.

 

Minister Donohoe said: ‘I would like to thank the Central Bank for its detailed and comprehensive Report on the effectiveness of the Code of Conduct on Mortgage Arrears in the context of the sale of loans by regulated lenders.  I am glad to see, in this instance, that the Central Bank is satisfied that, for borrowers who engage with the process, the Code of Conduct on Mortgage Arrears is working effectively and as intended’. 

 

“I note that, as a result of its review, the Central Bank is not proposing any changes to the Code at the moment.  However, as the Government and I take matters regarding mortgage arrears very seriously, we are always prepared to make changes and support actions where the Central Bank thinks they are necessary.” 

 

 

Ends

 

Report on the Effectiveness of the Code of Conduct on Mortgage Arrears in the context of the Sale of Loans by Regulated Lenders

 

Note to Editors:

*Findings:

  • The key finding of the Report is that for borrowers who engage with the process, the CCMA is working effectively and as intended in the context of the sale of loans entities regulated by the Central Bank

 

More generally:

  • The Mortgage Arrears Resolution Process (MARP), as set out in the CCMA, provides a clear framework for borrowers in or facing mortgage arrears on their primary residence to engage with relevant regulated entities, including banks, Retail Credit Firms and Credit Servicing Firms.
  • Both regulated lenders and Credit Servicing Firms (acting on behalf of Unregulated Loan owners) continue to put in place arrangements for borrowers who engage with this process.
  • There is no evidence that the Credit Servicing Firms inspected did not seek to engage with borrowers in arrears. The inspected Credit Servicing Firms have frameworks in place to support engagement with borrowers in arrears, as required by the CCMA. The Central Bank did not identify any material breaches of the CCMA by these firms.
  • Where a loan is sold to a Non-banking Fund (Unregulated Loan Owner), existing arrangements with borrowers are honoured by Retail Credit Firms and Credit Servicing Firms (acting on behalf of a Unregulated Loan Owner) until the agreed term of the arrangement comes to an end. Borrowers may then be offered a different arrangement from the suite of arrangements considered by the Retail Credit Firms and Credit Servicing Firms (acting on behalf of the Unregulated Loan Owner), within the MARP framework.
  • There is no evidence that borrowers whose circumstances have not changed are being moved off existing arrangements by Credit Servicing Firms (acting on behalf of the Unregulated Loan Owner) during the term of the arrangement.
  • Based on the number of properties taken into possession by banks, Retail Credit Firms and Unregulated Loan Owners over the period Q1 2016 to end Q1 2018, there is no material difference in the level of repossession activity by Unregulated Loan Owners compared with regulated lenders.

 

 

Background:

  • The Minister wrote to the Governor of the Central Bank earlier this year, under Section 6A of the Central Bank Act, 1942, as amended, requesting the Governor of the Central Bank to carry out a review of the Code of Conduct on Mortgage Arrears (CCMA) to ensure it remains as effective as possible.
  • The CCMA is a statutory Code put in place to ensure that lenders have fair and transparent processes in place for dealing with borrowers in or facing mortgage arrears. 
  • Lenders are required to comply with all aspects of the CCMA and non-compliance with the CCMA is enforceable against regulated entities by the Central Bank. 

 

 

The CCMA:

  • includes the Mortgage Arrears Resolution Process (MARP) framework, which sets out the steps that lenders must follow. The completion of an affordability assessment is a key step in the MARP. 
  • sets out that a lender must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including, inter alia, the borrower’s current repayment capacity, as determined by up to date financial information in a standard form known as a standard financial statement (SFS).
  • also requires lenders to review an alternative repayment arrangement at appropriate intervals for the type and duration of the arrangement.  The lender must also carry out a review of an alternative repayment arrangement at any time, if requested by the borrower.
  • states that all cases must be handled sympathetically and positively by the lender, with the objective at all times of assisting the borrower to meet his/her mortgage obligations. 

Contact

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

Monday 12th November 2018

 

Call for expressions of interest – Irish Financial Services Appeals Tribunal

 

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, invites expressions of interest from suitably qualified candidates for three vacant positions on the Irish Financial Services Appeals Tribunal. The three vacancies are for a Deputy Chairperson and two lay members.

The Irish Financial Services Appeals Tribunal hears and determines appeals from aggrieved parties against certain appealable decisions of the Central Bank of Ireland. The Appeals Tribunal aims to provide an accessible, efficient and effective method of appeal in an informal and expeditious manner. The Appeals Tribunal is chaired by the Honourable John D. Cooke S.C.

Tribunal members are nominated by Government for appointment by the President of Ireland.

The selection process will be managed by the Department of Finance. Although the Tribunal is not a State Board, the process will be undertaken in accordance with the Guidelines for Appointments to State Boards, published by the Government in November 2014.

Minister Donohoe commented:

“The Appeals Tribunal protects a key right, the right of individuals or firms to appeal decisions made by the Central Bank in relation to them. The right to appeal is also an important mechanism for holding the Central Bank to account on its decisions, and ensures that the Bank continues to be conscientious in its decision-making processes. I hope to find suitable candidates to nominate for appointment who will carry on the excellent work of the Tribunal to the same high standards as previous members.”

Details on the roles in question, the criteria for applicants, and how to apply can be found in the Candidate Information Booklet.

Expressions of interest and queries may be addressed to ifsatmembership@finance.gov.ie.

The closing date for expressions of interest is Monday, 10th December 2018.

Ends

12.11.2018

Publication of the Cost of Insurance Working Group’s Seventh Quarterly Progress Update

The Cost of Insurance Working Group – chaired by the Minister of State for Financial Services and Insurance, Michael D’Arcy TD and associated sub-groups are meeting regularly in order to ensure the timely implementation of all of the recommendations of the Report on the Cost of Motor Insurance and the Report on the Cost of Employer and Public Liability Insurance.  

The publication of the Working Group’s Seventh Progress Update shows that 62 of a total of 78 separate applicable deadlines relate to actions that are now completed, equating to an 80% ‘completion rate’.  While the goal is to improve upon this completion rate, it is important to consider the ground that both reports are laying for a more transparent and fairer insurance environment going forward.

The Minister of State notes that this quarter marks the occasion when much of the “heavy lifting” work of bringing necessary legislative changes through the Houses of the Oireachtas is beginning to bear fruit.  In July, the Insurance (Amendment) Bill 2018 was enacted.  This is an important piece of legislation necessary to address the Setanta legacy.  In addition, two other important pieces of legislation were published by the Government during this period, namely the Central Bank (National Claims Information Database) Bill 2018 and the Personal Injuries Assessment Board (Amendment) (No. 2) Bill.  Work has already commenced on bringing the Central Bank (National Claims Information Database) Bill 2018 through the Houses of the Oireachtas. Second stage was completed in Dáil Éireann in September, and it is hoped that with the assistance of all parties in the House, that this Bill can be enacted by the end of this year to allow the database be operational from early 2019.  The Personal Injuries Assessment Board (Amendment) (No. 2) Bill completed Second Stage on 8 November.

Also of note this quarter is the Personal Injuries Commission’s publication of its second and final report.  It has made ten recommendations, the implementation of which will be a matter for each of the bodies responsible.  Minister D’Arcy believes that the implementation of the PIC report is key to fundamentally addressing many of the concerns that people have with the personal injury compensation framework in this country – in particular the recommendation that this country follows the example of judicial intervention which has occurred in Northern Ireland and in the UK, namely the introduction of Judicial Guidelines for judges in relation to damages for personal injury claims. 

Minister D’Arcy reiterates that the implementation of the Cost of Insurance Working Group’s recommendations remain a priority for this Government.  In that context, he, and the Minister for Finance, Paschal Donohoe, TD will continue to work closely with colleagues in Government, as well as other stakeholders, to ensure that the Working Group’s recommendations are implemented in a satisfactory manner.  He remains hopeful that there will be a further positive impact on pricing over the next 12 months or so over and above the 22.9% fall which has taken place since July 2016.

 

ENDS

Further information from:

Aidan Murphy (Press Office) – pressoffice@finance.gov.ie   

 

Background Note to Editors:

The Cost of Insurance Working Group was initially chaired by the Minister of State at the Department of Finance, Mr Eoghan Murphy T.D.  However, following his appointment as Minister for Housing, Planning and Local Government, he was replaced as Chair by Minister of State for Financial Services and Insurance, Mr Michael D’Arcy T.D.  The Working Group is comprised of representatives from the Department of Finance, the Department of Business, Enterprise and Innovation, the Department of Justice and Equality, the Central Bank of Ireland, the State Claims Agency, and the Personal Injuries Assessment Board.

The Report on the Cost of Motor Insurance was published in January 2017 and made 33 recommendations with 71 associated actions to be carried out in an agreed timeframe.  The Report on the Cost of Employer and Public Liability Insurance was published in January 2018 and made 15 recommendations with 29 associated actions to be carried out in an agreed timeframe.

There is a commitment in both Reports that the Working Group will prepare quarterly updates on its progress. The first update was published in May 2017, the second in July 2017, the third in October 2017, the fourth in January 2018 the fifth in May 2018, and the sixth in August 2018 and all six provided details on how the implementation of the recommendations were progressing, with a particular focus on the action points which were due for completion during the respective quarters.

This Seventh Progress Update is the third such quarterly report to encompass both the Motor and EL/PL Reports and provides details on how the implementation of the recommendations is progressing, with a particular focus on the 7 actions which were due for completion during Q3 from both Reports.  4 of the 7 actions have been completed in this quarter.  In overall terms, 62 of a total of 78 separate applicable deadlines relate to actions that are now completed, equating to an 80% ‘completion rate’.  

The Special Assignee Relief Programme (SARP) was introduced in Finance Act 2012. The aim of the programme is to reduce the cost to employers of assigning skilled individuals in their companies from abroad to take up positions in their Irish based operations.

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, T.D., announced today that he proposes to bring forward amendments to the operation of the programme at Report Stage of Finance Bill 2018 in the coming weeks.

The Revenue Commissioners prepare an annual analysis of SARP. The 2016 report (published today) notes that the cost of SARP has risen significantly to €18.1 million in 2016 from €9.5 million in 2015 and €5.9 million in 2014. The increase in cost is related to the removal of the cap of €500,000 in eligible income in Finance Act 2015 and a substantial growth in very high earners availing of the relief.

Speaking today, Minister Donohoe said,

“In light of the information on the tax expenditure costs of the programme set out in the report, I propose to bring forward at Dáil Report Stage of the Finance Bill, amendments to s. 825C  of the Taxes Consolidation Act 1997 to place a ceiling on eligible income for SARP recipients at €1m. This change would be effective for new entrants to the programme from 1 January 2019 and for existing beneficiaries of the programme from 1 January 2020.”

 

The Programme will be subject to a full review in 2019 in accordance with the Department of Finance Tax Expenditure Guidelines. The review will look at all aspects of the programme, including its effectiveness in creating employment and assisting business expansion.

 

ENDS

Contact:

Deborah Sweeney [Press Adviser to Minister Donohoe] – 086 858 6878
Aidan Murphy [Press Officer, Department of Finance] – 085 886 6667

 

Press Office pressoffice@finance.gov.ie – 01 676 0336

 

 

 

 

Notes to Editors

The Special Assignee Relief Programme (SARP) was introduced in Finance Act 2012. The aim of the programme is to reduce the cost to employers of assigning skilled individuals in their companies from abroad to take up positions in their Irish based operations.

For the tax years 2012, 2013 and 2014, SARP provided relief from income tax on 30% of salary between €75,000 and €500,000. In 2015, the upper salary threshold of €500,000 per annum was removed to encourage senior decision makers to come to Ireland. There is no exemption from USC and PRSI is payable where the individual is not liable to social insurance contributions in their home country. School fees of up to €5,000 and one trip home per year are exempt from tax where they are paid for by the individual’s employer.

In Finance Act 2014, following a review of the incentive, the following changes were made:

  • The upper income cap on eligibility was removed;
  • The requirement for an individual to have been a full time employee for 12 months prior to his or her arrival in Ireland was reduced to 6 months;
  • The requirement regarding tax residence was amended to ensure that individuals who are tax resident in Ireland will qualify;
  • The restriction on the performance of duties outside the State was removed; and
  • The reporting obligations of employers was strengthened.

In Finance Act 2016, the relief was extended to end-2020.

The 2016 report shows that while the initial uptake of the scheme was low, the numbers of claimants continues to increase, with a greater than proportionate increase in cost, as shown in the table below:

Year Claimants Cost
2012 11 €0.1 million
2013 121 €1.9 million
2014 302 €5.9 million
2015 586 €9.5 million
2016 793 €18.1 Million

 

The sectors of the economy in which the assignees are located are spread across IT, Financial Services, Pharmaceutical and Medical, Consumer and Industrial and Other services. This shows that the incentive continues to reach a broad range of commercial sectors.

08 November 2018

 

 

Credit Union Fund (Stabilisation) Levy Regulations 2018

 

The Minister for Finance, Mr Paschal Donohoe T.D., has signed into law the Credit Union Fund (Stabilisation) Levy regulations.

Under the Regulations credit unions will be required to pay a stabilisation levy contribution in 2019. This stabilisation levy is the fifth in a series of annual levies that will be used to build up a Stabilisation Fund for credit unions. 

The size of the Stabilisation Fund and the length of time it will take to build it up is reviewed every three years, with the first of these reviews having taken place in October 2017. The outcome of the review was to reduce the rate of the levy (from 0.022% to 0.017%) while still meeting the original target of €30 million over a ten year period due to growth in assets for the sector. The Minister for Finance has committed to a review of the levy again before the introduction of the 2021 levy.

The Credit Union Fund (Stabilisation) Levy Regulations, along with a Q&A are published on the Department of Finance website (www.finance.gov.ie).

 

Background Information

The introduction of the Stabilisation scheme was one of the recommendations of the Commission on Credit Unions which also recommended that the scheme be funded by mandatory contributions from credit unions.                                                                                                       

The target size for the Stabilisation Fund is €30 million to be built up over ten years. The size of the Fund and the length of time it will take to build it up will be reviewed every three years. On the basis of the results of these reviews any necessary adjustments can be made to the target size of the Fund and the number of years in which it should be built up.

To be eligible for consideration for Stabilisation support, a credit union must have a regulatory reserve ratio equal to or greater than 7.5% of the credit union’s total assets and less than 10% and must in the opinion of the Central Bank be viable as a credit union.

The Minister has made the Regulations under Section 59(3) of the Credit Union and Co-operation with Overseas Regulators Act 2012. 

Ends

 

I

Contact:

Deborah Sweeney [Press Adviser to Minister Donohoe] – 086 858 6878
Aidan Murphy [Press Officer, Department of Finance] – 085 886 6667

 

Press Office pressoffice@finance.gov.ie – 01 676 0336

07 November 2018

 

 

Minister Donohoe commends Sharon Donnery as an official of the highest calibre

 

The Minister for Finance, Paschal Donohoe T.D., this evening (Wednesday) acknowledges the achievement of Sharon Donnery in being one of the final two candidates for the role of Chair of the European Single Supervisory Mechanism.  

 

He stated:  ‘The fact that Sharon Donnery was one of the final two candidates for this important position reflects her deep knowledge of, and experience in, financial regulation, and the high esteem in which she is held across Europe.  I also want to thank Sharon for putting her name forward for the role. It is important that Irish officials of the highest calibre go forward for these important international positions.  I look forward to continuing to work with Sharon in her Central Bank role’.

 

“I would also like to congratulate Mr. Enria on his nomination, I have no doubt he will serve Europe well.” 

 

Ends

 

I

Contact:

Deborah Sweeney [Press Adviser to Minister Donohoe] – 086 858 6878
Aidan Murphy [Press Officer, Department of Finance] – 085 886 6667

 

Press Office pressoffice@finance.gov.ie – 01 676 0336

Mr Patrick Walsh will today begin his term as the new Irish Director of the European Bank of Reconstruction and Development (EBRD). Until recently, Mr Walsh served as a Special Advisor in the Secretariat General of the European Investment Bank (EIB), an institution that he has worked for in various development financing roles inside and outside the EU since 1983. Prior to this, Mr Walsh worked with the ICC Bank, the Investment Bank of Ireland, and with the Irish Civil Service. He is a Fellow of the Chartered Institute of Management Accountants (UK) and an Associate of the Irish Institute of Bankers.

Mr Walsh was chosen following a competitive interview based on experience, skills and ability to perform effectively in the position.

His term of office as Director runs until May 2021.

ENDS 

1 November, 2018

Note for Editors

The EBRD, headquartered in London, was established in 1991 to provide finance to develop open and sustainable market economies in countries committed to, and applying, democratic principles in Central and Eastern Europe in the former Soviet Bloc countries. The EBRD has since significantly extended its geographical scope of operations to include the countries of Southern and Eastern Europe, as well as Turkey, Egypt, Jordan, Morocco and Tunisia.

The EBRD provides project finance and equity for banks, industries and businesses, both new ventures and existing companies. It also works with publicly-owned companies to support privatisation, the restructuring of state-owned firms and the improvement of infrastructure.

The EBRD Board of Directors, composed of twenty‑three members of high competence in economic and financial matters, is responsible for the direction of the general operations of the Bank.

Mr Walsh’s nomination followed a publicly advertised selection process. A Selection Committee considered expressions of interest and made a recommendation to the Minister for Finance following a shortlisting process and competitive interview. Mr Walsh’s nomination was approved by the Government. His nomination was subsequently notified to the EBRD and he was successfully elected by Ireland’s constituency (Denmark, Lithuania and Kosovo) in the Bank.

Patrick Walsh – Career Summary

2017 to Present

Special Advisor in the General Secretariat, European Investment Bank

2009 to 2017 

Director for Financing Operations in the African, Caribbean, Pacific, Asian and Latin America Regions, European Investment Bank

2005 to 2009

Head of the “JASPERS” (Joint Assistance to Support Projects in European Regions) Project Preparation/Technical Assistance Programme (in conjunction with EBRD, KfW and the EU Commission), European Investment Bank

2000 to 2005

Head of the Western Balkans and Turkey Division, European Investment Bank

1995 to 2000

Head of the Mashreq Division, European Investment Bank

1992 to 1995

Lending Operations in the Middle East, including the Palestinian Territories, European Investment Bank

1986 to 1992

Loan Officer, Lending Operations in the former FSRY (Yugoslavia) and Turkey, plus Cyprus and Malta, European Investment Bank

1983 to 1986

Monitoring Department of the Directorate for Operations outside the Community, European Investment Bank

 

 

The significant growth of the Personal Contract Plan (PCP) market in recent years led both the Competition and Consumer Protection Commission (CCPC) and the Central Bank of Ireland to conduct studies of the market, which were published in March of this year. Both of these reports identified a number of issues in relation to the PCP market that have potential financial stability and consumer protection implications.

In light of this, in June of this year the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe, TD, commissioned Mr Michael G Tutty to conduct a review of the current Personal Contract Plan market and in particular, to consider the adequacy of existing consumer protection in relation to PCPs.

Mr Tutty has now completed his review and submitted his report, which is being published today on the Department of Finance website. The Minister of State at the Department of Finance, Michael D’Arcy, on behalf of the Government, took the opportunity to thank Mr Tutty for carrying out this important work.

Speaking upon publication of the Report, Minister D’Arcy said: ‘In overall terms, the Tutty report has found that there is currently no evidence of consumer detriment arising from PCPs. Nevertheless, it also found that there is a risk that certain potential problems could arise at a future point and that it would be prudent at this point to address these matters before they materialise.’

The report therefore sets out a number of recommendations to tackle these potential future problems and to improve consumer protection in relation to PCPs without imposing an undue burden on providers or regulators.

One of the key recommendations of the report is that relevant provisions of the Central Bank Consumer Protection Code, in particular the provisions which require lenders to assess the suitability of the product for the consumer and also the ability of the borrower to repay the debt over the duration of the credit agreement, should be extended to hire-purchase/PCP agreements.

The Tutty report also recommends that legal advice should be obtained to confirm whether or not PCPs fall within the Consumer Credit Act 1995 definition of “hire-purchase agreement”, and, if not, that a review of that Act should be carried out with a view to enshrining PCPs in consumer protection legislation either as part of the hire-purchase provisions or on a separate basis.

Minister D’Arcy welcomed these recommendations and stated that: ‘The conclusions in the Tutty report are worthy of adoption and will improve the level of consumer protection in relation to PCPs without imposing an undue burden on providers or regulators. Therefore, having published the report, it is now the Government’s intention to liaise closely with the Central Bank, the Attorney General’s Office, the CCPC, and other relevant bodies with a view to implementing the report’s conclusions.’

The report published today (1 November) on the Department of Finance website can be found here.

Note for editors:

Mr Michael G Tutty is a former Second Secretary General of the Department of Finance and also former Chairman of the Commission for Energy Regulation. He is currently a member of the Irish Fiscal Advisory Council.

Ends

1 November, 2018

 

30 October 2018

 

Launch of the 2019 Economic Policy Competition

 

  

The Department of Finance is pleased to announce the launch of the sixth annual Department of Finance Economic Policy Competition.

This is an essay-based competition that assesses undergraduate students’ understanding of the Irish macro economy and Ireland’s policy-making system. The Competition allows students to demonstrate their sound economic analysis by preparing a policy submission, through their respective third level institution, on one of two set questions.

Following the assessment of submissions, the Competition winner will be offered a 12 week paid summer internship, working alongside economists in the Department of Finance. The successful applicant will also be presented with a certificate from the Minister for Finance.

Please find details on questions, presentations and submission guidelines below:

 

 

·       Information & Submission Tips

·       Q1: Mitigating the economic impact of Brexit on Ireland- what policies do you propose?

·       Q2: The return to monetary policy normalisation- Impact on Ireland?

·       Economic Policy Competition 2018 Intern Blog – Marcus Rafferty

 

 

For Further information please contact: economicpolicycompetition@finance.gov.ie

An Taoiseach, Leo Vardakar TD, has this week, on behalf of the Government, signed an Order that brings Ireland one step closer to ratifying the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS). The Convention, which aims to tackle aggressive tax planning by multinationals and facilitate businesses to operate internationally on a more level playing field also helps Ireland to remain competitive in attracting foreign investment here. The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, jointly brought a memo to Government with An Tániaste, Simon Coveney TD on the matter this week.

The Programme for a Partnership Government states that Ireland will “engage constructively with any measures to work towards international tax reform” and “will work with our international partners in tackling aggressive international tax planning through the OECD’s Base Erosion and Profit Shifting (BEPS) initiative.” The move this week brings the Government a step closer to meeting that objective.

Welcoming the signing of the Order, Minister Donohoe said “This is an important step in our work to ratify the BEPS Multilateral Convention.  Once fully ratified this will introduce an important anti-abuse clause into our double taxation treaties, of which we have 74 in existence, and ensure that Ireland is meeting our commitments under the OECD BEPS project.  Ensuring that a more level playing field exists and that, by working together, appropriate standards are set internationally is key to tackling aggressive tax planning and ensuring that multinational corporations pay their fair share of tax. This progress marks another step in delivering the programme of corporate tax reform, which is detailed in Ireland’s Corporation Tax Roadmap, and which I published just last month, and points to the direction of travel set by the Irish Government in this area for the years ahead.”

Background Information

The Multilateral Convention was agreed in November 2016 following extensive discussions at the OECD.  Government approval to sign the Multilateral Convention was granted in May 2017 and Ireland signed the Multilateral Convention in Paris in June 2017 with more than 60 other countries. This is subject to ratification. 

A key recommendation of the OECD BEPS project is that changes should be made to bilateral double taxation treaties to reduce the possibility of double non-taxation arising, while ensuring that treaties remain effective in eliminating double taxation. There are approximately 3,000 double taxation treaties in existence worldwide.  Ireland has 74 signed double taxation treaties.  Rather than updating these treaties individually through bilateral negotiations the Multilateral Convention provides a method for countries to update the application of their existing treaties to ensure the highest standards are met in respect of international tax planning. The Convention provides a mechanism for countries to transpose recommendations made by the BEPS project into existing bilateral tax treaties. It will modify the application of the majority of Ireland’s double taxation treaties to ensure that they are compliant with OECD BEPS recommendations. 

The next step in ratifying the Multilateral Convention is the inclusion of the Order in primary legislation. 

Finance Act 2017 made changes to the Taxes Consolidation Act 1997 to empower the Government to facilitate the ratification of the Multilateral Convention.  In September this year the draft Multilateral Convention to Implement Tax Treaty Related Measures Order 2018 was discussed at the Select Committee on Finance, Public Expenditure and Reform and was subsequently debated and approved by Dáil Éireann.  The Government has now made the Order and it is intended that it will be included in Finance Bill 2018 by way of a Committee Stage amendment.  Once the Order has force in primary law it can then be deposited with the OECD, completing Ireland’s ratification of this key element of the OECD BEPS project.

Ends

26 October, 2018

The Minister for Finance and Public Expenditure and Reform Paschal Donohoe T.D., notes today’s announcement by Allied Irish Banks plc (AIB) regarding the intention of Mr Bernard Byrne to step down as chief executive and director in 2019.

Mr Byrne joined AIB in May 2010 as Group Chief Financial Officer and held several roles before being appointed Group Chief Executive in May 2015.

 

Commenting on Mr Byrne’s resignation, the Minister stated:

“AIB has continued its transformation under Mr Byrne’s leadership and is an important supporter of economic growth and jobs in the Irish economy. Mr Byrne was instrumental in the successful IPO of AIB last year working closely with my predecessor and I and officials in my Department. Mr Byrne can be proud of the many changes he introduced in the bank including a renewed focus on customers and staff engagement. He leaves the bank in a much stronger financial position as outlined in this morning’s trading update.

“I would like to thank Mr Byrne for his professionalism and dedication throughout his time in AIB and I wish him continued success in the future.”

ENDS

 

Contact:

Deborah Sweeney [Press Adviser to Minister Donohoe] – 086 858 6878
Aidan Murphy [Press Officer, Department of Finance] – 085 886 6667

Press Office pressoffice@finance.gov.ie – 01 676 0336

The Minister for Finance, Paschal Donohoe T.D., today (Tuesday) announced that the Government has approved the publication of the legislation to establish the Rainy Day Fund, which will formally be known as the “National Surplus (Exceptional Contingencies) Reserve Fund.” 

Minister Donohoe stated: ‘Establishing a Rainy Day Fund is a key commitment of the Programme for Partnership Government and the Confidence and Supply Agreement.  This Bill is part of the Government’s strategy to enhance the resilience of the public finances and build strength in the economy to better safeguard our future. We are doing this alongside balancing the budget for the first time in a decade and maintaining a more sustainable tax-base’.

“The Rainy Day Fund will provide financial space, which can be drawn on in the event of a severe economic shock in order to help mitigate its effects.  The lessons from 10 years ago illustrate the importance of having such a Fund in place so as to mitigate dramatic reductions in expenditure and increases in taxation at a time when the economy can least afford it.  To adopt any other approach is putting our economy at risk for short-term gain.” 

Background

The Rainy Day Fund was a core element of both the Programme for a Partnership Government and the Confidence and Supply Agreement. 

The Bill will be referred to as the “National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018.

Payments into the Fund

The Minister has set out that he will be seeding the fund with a €1.5 billion transfer from the assets of the Ireland Strategic Investment Fund.  There will then be annual transfers of €500 million for the next five years. After that initial five year period the Government of the day can review and decide how to proceed. The Minister has also provided for a facility to lodge potential windfall tax receipts or income to the Fund where the Dáil so approves. This will be considered on a case by case basis.

Payments out of the Fund

The legislation provides for the Fund to be drawn down if there is a severe economic shock. To do this, the Minister for Finance of the day must be satisfied, on reasonable grounds, involving evidence and expert analysis, that a drawdown is necessary. The Minister will seek a Government decision to bring a proposal to the Dáil, and the Dáil will then vote on whether or not to draw down funds. This is the “triple-lock” that the Minister has referred to previously:

  1. Minister for Finance’s view based on expert advice;
  2. Government decision; and
  3. Dáil resolution.

Contingency Reserve

The legislation also provides for a ‘contingency reserve’ to be created by way of a special exemption by which the annual payment into the Fund will not be made until the end of the financial year.  This may be reduced by the amount – if any – paid out in that year to mitigate the effect of natural or other disasters. The contingency reserve can be accessed where there are unforeseeable costs arising as a result of a natural or other disaster. This could include, for example, for the purposes of mitigating the costs of exceptionally severe weather events, or of a major epidemic such as foot-and-mouth.

Ends

23 October 2018


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