Here is a brief Summary of some of the Taxation Measures for introduction in Ireland in 2015.
There will be an increase in the standard rate band of income tax by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.
There will also be a reduction in the higher rate of income tax from 41% to 40%.
The threshold for the artists’ exemption will be increased by €10,000 to €50,000.
The Exemption is also being extended to non-resident artists i.e. to individuals who are resident or ordinarily resident in another Member State or in another EEA State.
Foreign Earnings Deduction
FED is being extended for a further 3 years until the end of 2017 and qualifying countries have been extended to include Chile, Mexico and certain countries in the Middle East & Asia.
Other changes are as follows:
• The number of qualifying days abroad is being reduced from 60 to 40
• The minimum stay in a country is reduced to 3 days and
• Travelling time is being included as time spent abroad.
Special Assignee Relief Programme
The main points are as follows with other details being provided in the Finance Bill:
• SARP is being extended for a further 3 years until the end of 2017 and the upper salary threshold is being removed.
• The residency requirement is being amended to only require Irish residency and the exclusion of work abroad is also removed.
• The requirement to have been employed abroad by the employer is being reduced to 6 months.
Employment and Investment Incentive
The EII is being amended:
• to raise company limits
• increase the holding period by 1 year and
• include medium-sized companies in non-assisted areas and internationally traded financial services (These measures are subject to approval from the European Commission).
Hotels, guest houses and self-catering accommodation will remain eligible for a further 3 years and the operating and managing of nursing homes will be included for 3 years.
Seed Capital Scheme
This scheme will now be known as “Start-Up Relief for Entrepreneurs” (SURE).
It has been extended to individuals who have been unemployed up to 2 years.
The threshold for exempt income under this scheme has been increased from €10,000 to €12,000 per annum.
Tax relief at 20% will be provided on water charges, up to a maximum of €500 per annum.
This relief will be paid in arrears
Home Renovation Incentive
The HRI Scheme has being extended to include rental properties owned by landlords subject to income tax.
Universal Social Charge
Incomes of €12,012 or less will be exempt from the Universal Social Charge.
In situations where the annual income is in excess of €12,012 the tax will be calculated as follows:
€0 to €12,012 @ 1.5%
€12,013 to €17,576 @ 3.5%
€17,577 to €70,044 @ 7%
€70,044 to €100,000 @8%
For individuals with PAYE income in excess of €100,000 per annum they will be liable to USC @ 8%.
Self-employed individuals with income in excess of €100,000 will be liable to USC @ 11%
There will be an extension of the exemption from the 7% rate of USC for medical card holders whose total income does not exceed €60,000 (who will now pay a maximum rate of 3.5% USC).
Individuals aged 70 years and over whose total income is €60,000 or less will pay a maximum rate of 3.5% USC.
CAPITAL GAINS TAX
Property purchase incentive
The incentive relief from CGT (in respect of the first 7 years of ownership) for properties purchased between 7 December 2011 and 31 December 2014 is not being extended beyond 31 December 2014.
Where property purchased in this period is held for seven years the gains accrued in that period will not attract CGT.
Windfall tax provisions introduced in 2009 are being abolished from 1st January 2015.
This relates to provisions which apply an 80% rate of tax to certain profits or gains from land disposals or land development, where those profits or gains are attributable to a relevant planning decision by a planning authority.
R&D Tax Credit
The 25% tax credit applies to the amount of qualifying R&D expenditure incurred by a company in a given year that is in excess of the amount spent in 2003 (base year).
This 2003 base year restriction is now being removed from 1 January 2015.
Three Year Relief for Start-up Companies
This relief from corporation tax on trading income (and certain capital gains) of new start-up companies in the first three years of trading has been extended to new business start ups in 2015.
A review of this measure will take place in 2015.
Capital Allowances for the Provision of Specified Intangible Assets
This provides capital allowances for expenditure incurred by a company on the provision of certain intangible assets for use in a trade.
The use of such allowances in any accounting period is currently restricted to a maximum of 80% of the trading income from the relevant trade in which the assets are used.
This 80% restriction on aggregate allowances (and any interest expense incurred on borrowings to fund the expenditure) will be removed.
Accelerated Capital Allowances for Energy Efficient Equipment
This is a measure to incentivise companies to invest in energy efficient equipment was due to expire at the end of 2014 however it is being extended to the end of 2017
Deposit Interest Retention Tax
First time buyers DIRT relief has been introduced which is a relief from DIRT on savings used by first time house buyers towards the deposit on a home.
There have also been changes to Agri-Taxation in terms of Income Tax, VAT (Increase in the Farmer’s Flat Rate Addition from 5% to 5.2%), Capital Gains Tax (Relief for Farm Restructuring), C.G.T. (Retirement Relief), Capital Acquisition Tax (Agricultural Relief) and Stamp Duty (Agricultural leases and Consanguinity Relief).
The aim of this Budget is to secure economic recovery, reward work and create opportunities, support key sectors of the domestic economy, international competitiveness, implementing a fair and progressive tax system, etc.