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From Accountingnet.ie Taxation/Budget News
The Minister for Finance, Mr. Michael Noonan and the Minister for Public Expenditure and Reform, Mr. Brendan Howlin presented their fifth Budget speech on Tuesday 13th October 2015. The changes below have been announced and are due to take effect from 1st January 2016, unless otherwise stated. Should you have any queries in relation to anything contained within, please contact Nicola Foster or Niall Grant at nfoster@annebrady.ie or ngrant@annebrady.ie. Personal tax Tax rates and bands No changes to income tax rates or bands. USC bands and rates Favourable adjustments to the lower USC bands and rates. Rates reduced to 1%, 3% and 5.5% with some adjustments to the bands. The rate of 8% for income over €70,044 and the 11% rate for relevant income over €100,000 remain unchanged. Entry threshold for USC increased from €12,012 to €13,000 i.e. where income is less than €13,000 it is exempt from USC. PRSI A tapered PRSI credit (maximum level of €12 per week ) for employees insured at Class A who earn between €352.01 and €424 in a week. Lower rate of 8.5% employer PRSI to apply to weekly earnings of up to €376.01 (up from €356.01). Tax credits:
General stock relief, stock relief for young trained farmers, stock relief for registered farm partnerships and the Stamp Duty exemption for young trained farmers extended to 31 December 2018. A new farm succession transfer partnership model to be introduced, subject to EU state aid approval. Child benefit Child benefit is to increase by €5 per month to €140 per child from January 2016. State pension €3 increase per week for pensioners and carers aged 66 and over. Pensions:
The Minister for Finance will be making a proposal to Government to postpone the revaluation date for the Local Property Tax from 2016 to 2019. Banking Levy It is proposed to extend the banking levy, which is currently due to expire in 2016, by five years to 2021, subject to a review taking place of the methodology used to calculate the levy. Corporate tax Knowledge Development Box (KDB) Profits arising from certain patents and copyrighted software, which are the result of R&D carried out in Ireland, will be taxed at a rate of 6.25%. The KDB will be in line with the recent OECD guidelines and will be the first and only box of its kind in the world to meet the new standards of the OECD’s “modified nexus” approach. International corporate tax – OECD Base Erosion Profit Shifting (BEPS) The Government has published an update on Ireland’s international tax strategy and reaffirms its commitment to the OECD BEPS project. The 12.5% corporation tax rate on trading profits will not be changed as the OECD has confirmed that each country is free to set its corporation tax rate. The Government intends to finalise the Multilateral Instrument (MLI) by the end of 2016 and deliver on a number of changes as proposed by the OECD as part of the BEPS project. In order to enhance transparency in our tax system, Minister Noonan has implemented the Country by Country transfer pricing reporting regime as outlined in the BEPS project. This applies for accounting periods commencing on or after 1 January 2016. Employment and Investment Incentive Scheme (EIIS) The amount of finance that can be raised by a company under EIIS has increased from €2.5m to €5m annually. This will be subject to a lifetime maximum of €15m, up by €5m. The scheme will now be available to all SMEs irrespective of their geographical location. Finally, the scheme has been expanded by allowing investments in the extension, management and operation of existing nursing homes. These changes are effective from midnight tonight. Film relief There is to be an increase in the cap for eligible expenditure qualifying for film relief from €50m to €70m; this limit will be reviewed going forward. Other measures Corporation tax relief for start-up companies has been extended for a further three years. This is based on the number of employees and loss-making companies may carry forward unused relief. The Start-Up Relief for Entrepreneurs (SURE) has been extended by including investments in the extension, management and operation of nursing homes. The scheme of capital allowances for the construction of facilities used in the maintenance, repair, overhaul and dismantling of aircraft is being amended to comply with EU state aid rules. The scheme commences from 14 October 2015. Indirect taxes
Capital taxes
Nicola Foster - nfoster@annebrady.ie Niall Grant - ngrant@annebrady.ie Anne Brady McQuillans DFK, Iveagh Court, Harcourt Road, Dublin 2. Tel:+353 1 4786600 Fax:+353 1 4750170 © Copyright 2005 by Accountingnet.ie | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
