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Tag Archive for Irish Tax System

Irish Tax Treatment of Contracts For Difference (CFD)

Recently I’ve received a number of queries relating to the Irish tax treatment of CFDs or Contracts for Difference. Although the information available is plentiful and appears to be straight forward, it’s important to be aware that each situation is different and as a result the tax treatment may vary considerably.

Firstly, what is a Contract for Difference?

Essentially it’s a contract between two parties i.e. the investor and the CFD Provider. At the close of the contract, the parties exchange the difference between the opening and closing prices of a specified financial instrument, including individual equities, currencies, commodities, market indices, market sectors, etc. In other words, two parties take opposing positions on the difference between the opening and closing value of a contract i.e. the price Read more

2013 Finance Act – Part 9 – Irish Tax System

This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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9. CLOSE COMPANY SURCHARGE

Finance Act 2013 increases the de minimis amount of undistributed investment and rental income from €635 to €2,000 which may be retained by a Close Company without giving rise to a surcharge.

A similar amendment is being made to increase the de minimis amount in respect of the surcharge on undistributed trading or professional income of certain service companies.

The aim of these changes is to improve cash flow of close companies by increasing the amount a company can retain for working capital purposes without incurring a surcharge.  Although it’s difficult to imagine how undistributed income of €2,000 could possibly make that much of a difference.

2013 Finance Act – Part 8 – Irish Tax System

This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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8. FATCA – US FOREIGN ACCOUNT TAX COMPLIANCE ACT

The US Foreign Account Tax Compliance Act 2010 comes into effect in 2014.

The aim of this legislation is to ensure that US citizens pay US tax on income arising from overseas investments.

The Finance Act 2013 introduced legislation which allows for the Irish Revenue Commissioners to make regulations for the purpose of implementing this Ireland US agreement. 

The regulations will require that certain financial institutions register and provide a Read more

2013 Finance Act – Part 6 – Irish Tax System

This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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6. DONATIONS TO APPROVED BODIES

Prior to the Finance Act 2013, tax relief for donations was given in two ways:

1.  The self employed individuals and companies received a tax deduction for donations made to approved bodies subject to certain conditions.
2.  PAYE workers (employees paid through the PAYE system) did not obtain a tax deduction.  Instead the approved body applied to Revenue for a repayment as if the PAYE worker had made the donation net of tax at the individual’s marginal tax rate i.e. 41%.

The new provisions have resulted in: Read more

2013 Finance Act – Part 5 – Irish Tax System

This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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5. MORTGAGE INTEREST RELIEF

Prior to Finance Act 2013 Mortgage Interest Relief was due to expire at the end of 2012.

Section 9 Finance Act 2013 introduced transitional provisions in relation to mortgage interest relief which allows certain loans taken out in 2013 to be deemed to have been taken out in 2012.  These include: Read more

2013 Finance Act – Part 2 – Irish Tax System

Finance Act 2013 contains the legislative provisions for a number of changes to the Irish tax system under all the main tax heads including Income Tax, Corporation Tax, Capital Gains Tax, Excise, Value Added Tax, Stamp Duty and Capital Acquisitions Tax.

Due to the amount of changes it is not possible to detail each individual provision so I decided to focus on a cross section of amendments to give a general overview.  The legislative provisions I have selected will have an affect on most if not all Irish individuals whether resident and domiciled or resident and non-domiciled; employed or unemployed; retired or still working; self employed or PAYE workers; corporate structures or individuals, etc.  This is a ten-part Worldwide Tax Blog Series:

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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2. THE REMITTANCE BASIS FOR INCOME TAX

This legislative amendment was introduced as an anti-avoidance measure to ensure that an individual who is resident and/or ordinarily resident in Ireland but non-domiciled cannot avoid paying the correct tax on the remittance of income into Ireland. Read more

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