The 12.5% corporation tax rate will not be changed.
CGT entrepreneur relief to be amended to reduce rate of tax from 20% to 10%. The lifetime cap of €1m to be reviewed in future budgets.
New SME focused share based remuneration scheme to be introduced in Budget 2018, subject to further consultation and EU state aid approval.
The Minister confirmed that further amendments to section 110 TCA 1997 will be introduced in the Finance Bill, after consultation has taken place.
Knowledge Development Box to be modified to provide for additional benefits for small companies. No further details provided.
A consultation process will take place focusing on the modernisation of the PAYE system to be effective from 1 January 2019.
Universal Social Charge (USC) to be dropped by 0.5% for the lower bands – down to 0.5%, 2.5% and 5%. Incomes of €13,000 or less are exempt from USC and there is an increase to the ceiling of the band on which the reduced 2.5% rate of USC will be payable, from €18,668 to €18,772.
The revised rates will be:
- €o to €12,012 @ 0.5%
- €12,013 to €18,772 @ 2.5%
- €18,773 to €70,044 @ 5%
- €70,045 to €100,000 @ 8%
- PAYE income in excess of €100,000 @ 8%
- Self-employed income in excess of €100,000 @ 11%.
Medical card holders and individuals aged 70 years and over whose aggregate income does not exceed €60,000 will now pay a maximum USC rate of 2.5%.
Special Assignee Relief Programme (“SARP”) and Foreign Earnings Deduction (“FED”) extended to 2020. A change is being made to FED to reduce the foreign work days required from 40 to 30 and to extend it to cover Columbia and Pakistan.
Earned Income Tax Credit for self-employed being increased by €400 to €950.
Homecarer’s tax credit increased by €100 to €1,100.
Rent a Room scheme relief to be increased by €2,000 to €14,000 per annum.
Mortgage interest relief to be extended beyond December 2017 to 2020 – details to be provided in the next year’s Budget.
DIRT will be reduced by 2% each year for the next 4 years. This will result in DIRT falling to 33% by 2020.
Income Tax Credit introduced for fishermen of €1,270.
The Start Your Own Business Relief is to be extended for a further 2 years.
Help-to-Buy scheme to be introduced to help first time buyers acquire newly built houses. A rebate will be available for income tax paid over the last 4 years, up to a maximum of 5% of the purchase price up to €400,000. Relief is available for new houses up to €600,000, with no relief available for houses above this amount. The maximum benefit is €20,000 and it applies to homes purchased from July 2016 until 2019.
Interest deduction available to residential landlords being increased on a phased basis. Will increase from 75% to 80% in 2017 for new and existing mortgages. Will increase 5% each year thereafter until it reaches 100%.
The Living City Initiative to be expanded by including landlords and removing the cap on maximum floor size. Home Renovation Scheme to be extended by 2 years to 2018.
The Minister confirmed the reduced 9% VAT rate for the tourism and hospitality sector will be retained. Duty on a packet of 20 cigarettes will be increase by 50 cent (including VAT) from midnight tonight with a pro rata increase on other tobacco products. No change to the duty rates on beer, cider or other alcohol products.
A tax on sugar sweetened drinks (“sugar-tax”) to be introduced in April 2018 (following a consultation process).
The reduced rate of Alcohol Products Tax on beers produced in microbreweries is being extended to apply to microbreweries which produce not more than 40,000 hectolitres per annum.
To help combat climate-change, measures are being introduced to promote the use of natural gas and other ‘green’ fuels.
The availability of accelerated capital allowances for energy efficient equipment to be extended to sole traders and other non-corporates.
VRT relief for electric and hybrid vehicles to be extended by 5 and 2 years respectively.
The fuel inputs used to create high efficiency electricity in combined heat and power plants are being exempted from carbon tax.
Capital Acquisitions Tax
Capital acquisitions tax thresholds to be increased as follows for gifts/inheritances taken on after 12 October 2016:
- Category A Threshold (children): Increase by €30,000 to €310,000
- Category B Threshold (relatives): Increase by 8% to €32,500
- Category C Threshold (unrelated): Increase by 8% to €16,250
It is proposed that a review of the application of stamp duty to Irish shares will be undertaken in 2017.
The flat-rate addition for farmers is being increased from 5.2% to 5.4% from 1 January 2017.
Payments under the new raised Bog Restoration scheme to be exempt from Capital Gains Tax.
Farm restructuring relief to be extended until the end of 2019.
Farmers having an exceptionally poor year will be allowed to step out of income averaging and to instead pay tax due on current year basis (with any deferred liability becoming payable over subsequent years).
There will be a comprehensive programme of targeted compliance interventions against those engaged in offshore tax evasion. There will be new legislation designed to encourage early disclosures of liabilities in relation to offshore accounts or assets by i) Denying the opportunity to make a qualifying disclosure in this area after 1/5/2017 and ii) Introducing a new strict liability offence for failure to return details of offshore accounts or other assets.
Increasing Revenue staff resources by 50 (full time equivalent) on audit and investigation activities as well as enhancing ICT systems capacity for data matching and data analytics.
CORPORATION TAX RATEThe Minister reiterated in his Budget speech that the 12.5% Corporation Tax rate will remain in place.
- The deduction for capital allowances for intangible assets, and any related interest expense, will be limited to 80% of the relevant income arising from the intangible asset in an accounting period.
- The scheme of accelerated capital allowances for energy efficient equipment is being extended to 31 December 2020.
- The 9% VAT rate on tourism and services sector is retained.
- An increase in the VAT rate on sunbed services from 13.5% to 23% was announced.
- A VAT refund scheme is being introduced to compensate charities for the VAT they incur on their inputs. This scheme will be introduced in 2019 in respect of VAT expenses incurred in 2018.
BENEFIT IN KIND
A 0% Benefit In Kind rate is being introduced for electric vehicles for a period of one year.
FARMERS FLAT RATE
- There was no change to the farmers flat rate addition announced in the Budget speech.
SOLAR INFRASTRUCTUREFor the purpose of CAT agricultural relief and CGT retirement relief, agricultural land placed under solar infrastructure will continue to be classified as agricultural land, but with a condition restricting the amount of the farmland that can be used for solar infrastructure to 50% of the total farm acreage.
- Consanguinity Stamp Duty relief at 1% for family farm transfers has been continued for a further 3 years.
- The exemption for young trained farmers from Stamp Duty on agricultural land transactions continues.
IRELAND STRATEGIC INVESTMENT FUNDThe Minister announced a €750m investment fund to be made available for commercial investment in housing finance. The funds will be made available through a new vehicle to be known as Home Building Finance Ireland (H.B.F.I.)
STAMP DUTY – PROPERTY
- The rate of Stamp Duty on commercial property transactions increases from 2% to 6% with effect from midnight on 10 October 2017.
- A Stamp Duty refund scheme relating to commercial land purchased for the development of housing is to be introduced subject to certain conditions including a requirement that developers will have to commence the relevant development within 30 months of the land purchase.
VACANT SITE LEVY
The 3% levy that applies in the first year is to increase to 7% in the second and subsequent years. This means that any owner of a vacant site on the register who does not develop the land in 2018 will pay a 3% levy in 2019 and will become liable to the increased rate of 7% from 1 January 2019.
7 YEAR PROPERTY CGT RELIEF
The 7-year period for which owners had to retain qualifying assets to enjoy full relief from Capital Gains Tax (CGT) is reduced to 4 years. Accordingly, owners can sell qualifying assets between the fourth and seventh anniversaries of their acquisition and still obtain full relief from CGT on such chargeable gains.
- To encourage owners of vacant residential property to bring that property into the rental market, a new deduction is being introduced for pre-letting expenses of a revenue nature incurred on a property that has been vacant for a period of 12 months or more.
- Allowable expenses of €5,000 per property will apply, and the relief will be subject to clawback if the property is withdrawn from the rental market within 4 years. The relief will be available for qualifying expenses incurred up to the end of 2021.
- There were no changes to the Income Tax rates.
- The exemption limits, tax credits and standard rate bands applicable for the tax year 2018 are set out in detail under the Personal Tax Facts section.
- A number of changes have been made to the rates and bands for USC which are set out in detail under the Personal Tax Facts section.
- Medical card holders and individuals aged 70 years and over whose aggregate net income is less than €60,000 will pay a maximum USC rate of 2%.
The Minister has increased the Earned Income Credit by €200 to €1,150. The Home Carer Credit has also been increased by €100 to €1,200.
MORTGAGE INTEREST RELIEF
A tapered extension of mortgage interest relief for owner occupiers who took out qualifying mortgages between 2004 and 2012 was announced. 75% of the existing 2017 relief will be continued into 2018, 50% in 2019 and 25% in 2020. This relief will cease entirely from 2021.
- Excise Duty on a packet of 20 cigarettes is being increased by 50c with a pro rata increase on other tobacco products and an additional 25c on roll your own tobacco. This will take effect from midnight on 10 October 2017.
- Tax on sugar sweetened beverages is to be introduced on 1 April 2018. The tax will apply to sugar sweetened drinks with a sugar content between 5 – 8 grams per 100ml at a rate of 20c per litre. A second rate will apply for drinks with sugar content of 8 grams or above per 100ml at 30c per litre.
- A €5 increase on all weekly Social Welfare payments was announced together with a further €5 increase in the State pension. These changes will take effect in the last week of March 2018.
- The Christmas bonus payment of 85% will again be paid to all Social Welfare recipients in 2017.
- The free pre-school programme will be extended to provide a full 2-year service.
- The Minister announced an increase in the earnings disregard for the One Parent Family payment and the Jobseekers Transitional scheme by €20 per week.
- The threshold for receipt of the Family Income Supplement is also increasing by €10 per week for families with up to 3 children.
- The weekly rate for the qualified child payment will also increase by €2 per week.
DRUG PAYMENT SCHEME
- The drug payment scheme threshold is to be reduced from €144 to €134 per month.
- Prescription charges have been cut from €2.50 per item to €2 with the monthly cap decreasing from €25 to €20 for medical card holders under the age of 70.
TAX CREDITS FOR TAX YEAR 2018
|Single Person Child Carer||€1,650||€1,650|
|Home Carer Credit||€1,200||€1,100|
|Earned Income Credit||€1,150||€950|
WIDOWED PARENT BEREAVEMENT
|Tax Credit Year 1||€3.600||€3,600|
|Tapering to year 5||€1,800||€1,800|
UNIVERSAL SOCIAL CHARGE
EMPLOYEES & SELF-EMPLOYED
|0.00% on total earnings < €13,000||0.00% on total earnings < €13,000|
|0.50% on €0 to €12,012||0.50% on €0 to €12,012|
|2.00% on €12,013 to €19,372||2.50% on €12,013 to €18,772|
|4.75% on €19,373 to €70,044||5.00% on €18,773 to €70,044|
|8.00% on €70,045 to €100,000||8.00% on €70,045 to €100,000|
PAYE INCOME 8.00% on excess over €100,000
SELF-EMPLOYED 11.00% on excess over €100,000
|Total For Employer||10.85% on all income
8.5% on earnings less than €375p.w.
|10.75% on all income
8.5% on earnings less than €376p.w.
|PRSI||*4% on all income||*4% on all income|
|Self Employed / Directors Contributors||2018||2017|
|PRSI||*4% on all income||*4% on all income|
Not applicable if earnings less than €18,300 p.a. (€352 p.w.) **4.00% subject to a minimum payment of €500