As stated by Chartered Accountants Ireland, The Finance Bill includes details on the main new income tax reliefs; the Home Renovation Incentive and the Start Your Own Business Relief. The Bill gives legislative effect to these reliefs and the other tax measures announced in the Budget.
A number of further tax measures are included in the Bill. The Minister of Finance, Michael Noonan said: “Budget 2014 was carefully calibrated to support economic growth and job creation, to reduce our deficit to 4.8% and to secure Ireland’s exit from the EU/IMF programme. Finance (No.2) Bill 2013 give effect to the tax measures that underpin this strategy.
Twenty five pro-business and pro-jobs measures were introduced in Budget 2014, including the retention of the 9% rate of VAT for the tourism sector, the reduction of the air travel tax to €0, the introduction of a home renovation tax incentive scheme, enhancements to a number of agricultural incentives and a package of measures to encourage innovation, entrepreneurship and investment.
In addition, I have decided to bring forward the commencement date for the home renovation incentive to include works that commence on or after the 25 October 2013. This will act as a timely boost to this key sector and will ensure that works starting from tomorrow will be eligible for this incentive.
The full cost of the pro-jobs measures is in excess of €500m in a full year and as I set out on Budget day close to €700m of new tax measures are required to funds the jobs package and reduce the deficit in the public finance. This Bill sets out further details on these revenue raising measures.”
Here are some measures not in Budget 2014 but are included in the Bill:
- The Bill will enhance double taxation relief in respect of leasing income by providing for the carry-forward of unrelieved foreign tax against future taxable profits from the same source of income. This measure will be of particular benefit to the aircraft leasing industry;
- The Bill provides for the removal of the 50% restriction on the amount of prior year trading losses a NAMA participating institution (PI) can set off against trading profits. The remaining PIs comprise AIB and Bank of Ireland, of which the State owns 99.8% and15% respectively. This amendment will protect the accounting carrying value of deferred tax assets at the banks, improving capital ratios under the new Basel III rules and enhancing the valuation of the State’s equity holdings in the two banks. It also reduces the risk of future capital injections by the State arising from upcoming stress tests.
- Section 627 of the Taxes Consolidation Act (TCA) provides for an ‘exit tax’ on certain companies that cease to be resident for tax purposes in Ireland. Such companies are deemed to have disposed of their capital assets at market value (other than assets which are used for the purposes of a continuing trade in Ireland). In response to recent decisions of the Court of Justice of the European Union in relation to the ‘exit tax’ regimes of other Member States, the Bill amends Ireland’s regime. The amendments provide for an optional scheme of deferred payment of the ‘exit tax’ in cases where a liability arises on unrealised gains on the migration of a company from Ireland to another EU or EEA Member State
- As the legislation relating to benefit-in-kind is still determined in miles it has been necessary for employers and payroll providers, in correctly calculating the notional pay associated with the use of a company car, to carry out additional calculations to convert distances and usage into miles. An amendment is proposed to rectify this
For full information, see FMB’s Finance Bill announcement
FMB Chartered Accountants are experts in Taxation and can assist you in the minimisation of taxation arising on your income. For information and advice, email us at firstname.lastname@example.org or call 01 645 2002. You can also sign up for our quarterly newsletter full of tips and updates on topical issues which are of interest to our clients and followers.