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Conor Kennedy Law Library Four Courts Dublin 7.. Applies to all income Except Deposit interest Credit Union Dividends Certain Life Policies Investment.

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Presentation on theme: "Conor Kennedy Law Library Four Courts Dublin 7.. Applies to all income Except Deposit interest Credit Union Dividends Certain Life Policies Investment."— Presentation transcript:

1 Conor Kennedy Law Library Four Courts Dublin 7.

2 Applies to all income Except Deposit interest Credit Union Dividends Certain Life Policies Investment undertakings Certain offshore funds Certain social welfare payments

3 Calculation 1% up to €100,100 2% on excess over €100,100 but not exceeding €250,120 3% thereafter Not applicable to Over 65’s Single income less than €20,000 Double income less than €40,000 Under 65 Exemption threshold = €18,304 Medical card

4 No Allowance Double rent relief S.23 Donations Capital allowances Pension contributions Effective from 1 st January Preliminary tax payments

5 Difficult to implement Applies to certain urban areas Ministerial order Rate Default = €200 Possible =€100 Reductions 10 or more employees Not used fully in year Job sharing Maternity Collected by employers through PAYE system

6 Tax Year 2008 Tax Year 2009 and Subsequent Years € € Single Person 35,400 36,400 Widowed/single parent 39,40040,400 Married couple One earner 44,400 45,400 Two earners 70,800 72,800

7 Pref loans Home loans - 5% Other - 12.5% Bikes €1,000 expended by employer Safety equip Salary sacrifice Once every 5 years 1 st January 2009

8 Business mileage Business mileage Percentage of original lower limit upper limit market value (1) (2) (3) kilometres kilometres per cent 24,000 32,000 24 32,000 40,000 18 40,000 48,000 12 48,000 — 6

9 CO2 Emission Categories CategoryCO2 Emissions (CO2g/km) A0g/km - 120g/km B120g/km - 140g/km C140g/km – 155g/km D155g/km – 170g/km E170g/km - 190g/km F190g/km - 225g/km GMore than 225g/km

10 Category A -Opel Corsa & Toyota Prius 1.5 Category B -Ford Focus Category C -Audi A3 Category D -Ford Mondeo 2litre Category E -BMW 330i Category F -Jaguar XJ6 Category G - Range Rover Ministerial Order

11 Business mileage Vehicle Vehicle Vehicle Categories Categories Categories lower upper A, B and D and E F and G C (1) (2) (3) (4) (5) km km %% — 24,000 30 35 40 24,000 32,000 24 28 32 32,000 40,000 18 21 24 40,000 48,000 12 14 16 48,000 — 6 7 8

12 S. 8 - Health Expenses 1 st January 2009 – standard rate Nursing home expenditure – unaffected S.9 Share Schemes Withdrawal of approval for failing to file returns S.10 Share Schemes Anti-avoidance regarding exchanges Effected from 2oth November S.11 Share Schemes Penalties for failing to report

13 S.12 - Restricted & Forfeitable Shares S.128D – Restricted shares Tax reduced depending on retention period Period 1 – 5 yrs Abatement 10% - 60% S.128F – Forfeited Shares Shares acquired & assessed on MV Subsequently forfeited Repayment by Revenue Effective from 20 th November

14 Section 825B relief to non Irish domiciled employees employed and paid by the overseas employer period of at least three years. from a treaty country but outside the EEA relief ensures tax in Ireland will be the greater of: total employment earnings remitted to Ireland; and 1 st €100,000 plus 50% of the earnings over this amount. repayment of taxes otherwise payable overseas employer to operate PAYE/PRSI.

15 S.13 Example US assignee earned €300,000 Remitted €150,000 Taxes in Ireland on greater of €150,000 or €100,000 + €100,000 (50% of €200,000) Year of assessment 2009

16 S.14 From 1 January 2009 the relief due to first-time buyers will be as follows— 25 % for years 1 and 2 22.5 % for years 3, 4 and 5, and 20% for years 6 and 7. The rate of mortgage interest relief for non-first-time buyers will be reduced from 20% to 15%.

17 S.15 819 of the Taxes Consolidation Act 1997 in determining the number of days spent in the State an individual shall be present in the State for a day if present in the State at any time during that day

18 Section 16 amends the formula to determine the standard and personal fund thresholds to be indexed in line with an earnings adjustment factor in future years. Formula in section 790A (2) relating to the determination of the annual earnings limit for tax relieved pension contributions. The amendments ensure that where no indexation is provided for, the thresholds and the annual earnings limit will remain at the previous year’s amounts. Finally, the section restricts the annual earnings limit from €254,000 to €150,000 for 2009.

19 S.17 – Farm pollution scheme – extends – 31/12/2010 S.18 - Farmers stock relief extended to 31/12/2010 S.19 - IBA allowances 2 yrs after sale to claim full allows Previously 1 yr Reflects market trends Effective from 14/10/2008 S.20 capital allowances palliative care units. in-patient care beds being reduced from 20 to 8.

20 S.21 – EU SevesoDirective Hinder regeneration of docklands S.22 – Large hotel projects No loss of allows due to delays S.23 – Transfer pricing Prohibited deductions Connected parties S.24 Re-insurance companies S.25 Exemption for non residents Debt instruments S.26 Dirt increased to 23% - 1 st Jan

21 S.27 – Life policies & Investment Funds Increase tax 23% 1 st January 2009 S.28 – Film relief Increases investment to €50,000. Also increase in tax relief available from 80% to 100%. Ministerial Order S.29 Business Expansion and Seed Capital Schemes Extends by three months, the time by which a claim may be made in certain limited circumstances. S.30 Allowance for Know how Introduces anti-avoidance provisions

22 Start up companies – 14 th October Relief from CT for 3 yrs Applies also to gains on disposal of trade assets Trades excluded Service companies Mining companies etc liable @ 25% Old trades/businesses Relief where CT less than €40,000 Marginal relief up to €60,000 Minister to appoint commencement date

23 Marginal Relief 3 x (T – M) xA +B T Where T=Total CT payable M=Lower Relevant maximum limit A=CT on trading income B=CT on Gains on trade assets

24 Example Tax on Trading income 43,000 Tax on trading gain 5,000 Total Tax48,000 Tax Calculation 3 x (€48,000 – €40,000) x €43,000 + €5,000 €48,000 Tax Payable=€24,000

25 S32 – Manufacturing relief technical adjustment Ring fencing of deductions S.33 Tax Treaties Delay in ratification procedures Treaty to be given effect from date of signing S.34 – R&D Base year 2003 Credit increased to 25% Credit can be used in previous year Can claim credit as repayment

26 S.35 – R& D credit on buildings 35% of expenditure for R&D Activities for at least 4 years Credit claimed in year incurred 10 yr clawback S.36 – Limitation of tax credits S.37 – 100% Capital Allowances Companies Extended to Information and Communications Technology, Heating and Electricity Provision, Ventilation and Air-conditioning (HVAC) Control Systems, Electric and Alternative Fuel Vehicles

27 S.38 – Large companies CT of at least €200,000 1 st instalment due in mth 6 of current period Lower of either 50% of current or 45% of previous 2 nd instalment due in mth 11 of current period Aggregate payment must be 90% Balance due on filing return Provision for top up for chargeable gains S.39 ensure that certain interest and royalty payments and employer paid medical insurance premiums paid in accordance with corporation tax rules. S.40 -Amends Sch 4 exempts from tax Institute of Public Health in Ireland Limited and the Private Residential Tenancies Board

28 Section 41 Tax treatment of certain venture fund managers. Investment held for at least six years, in the shares or securities of a private company which is: Carrying on a business set-up and commenced on or after 1 January 2009,and Carrying on a business of research, development or innovation activities; Profits arising from the investment taxed 12.5% for companies and 15% for partnerships

29 S.42 – Remittance basis for UK assets S.43 – Anti-avoidance Connected parties Prevents artificial losses 20 November 2008 S.44 CGT rate now 22% 15 th October 2008 S.45 Pharmaceutical Soc of Ireland New body

30 S.68 Technical amendment to S.3 dealing with immoveable goods S.69 – amend S.7A Opt to tax ceases where landlord occupies S.70 amends S.7B Waiver in VAT groups S.71 – Travel Agents Margin scheme VAT on profit margin Bought in services – no VAT entitlement Effective from 1 st January 2010

31 S.72 – Standard rate increased to 21.5% Effective from 1 st December 2008 S.73Amedment of S.12 S.74 Unjust enrichment windfall gain if that tax is repaid. Tax not borne by trader but passed on in the price charged for goods and services. Amendment Revenue must refund unless refund result in the unjust enrichment. a claim for refund of an overpaid amount must set out full details of the case and the claimant must furnish any relevant documentation requested by Revenue.

32 S.75 - regulations relating to the operation of the travel agent’s margin scheme. S.76 amends 1 st Sch by removing the exemption for agency services in the arrangement of passenger transport or accommodation with effect from 1 January 2010. S.77 – 0% to margin scheme services, for bought-in services are availed of by persons travelling outside the Community. supply of tea and coffee in non drinkable form e.g. tea leaves, tea bags, ground coffee etc. is zerorated. supply of tea and coffee in drinkable form is not zero- rated.

33 Section 79 - e-stamping of instruments for stamp duty Major strategic development Anticipated 90 per cent of cases. Commencement Order. Section 80 Amendment of section 5 Payment of stamp duty in bulk Section 81 an incentive to encourage the presentation of instruments Measure in anticipation of the introduction of e- stamping, to facilitate a smooth transition

34 Section 82 Sub-sales Resting in contract Licences Agreement for lease Subject to a Commencement Order being made. Section 83 Exchange of properties Section 84 Young trained farmers Land transfers Exempt to 31/12/12

35 Section 85 Relief on sale on subsequent reinvestment Period – 18 months Extended to June 2011 Section 86 – ATM Cards Description Old New € ATM cards 5 2.50 Debit cards 5 2.50 ATM/Debit cards 10 5

36 S.87 – Amendment to Sch 1 Cheques – rate - €0.30 to €0.50 15 October 2008. exemption on share transfer forms where the duty is €10 or less after the enactment of the Bill. Non-Residential Property Rates Aggregate Consideration Rate of Duty Up to €10,000 Exempt €10,001 to €20,000 1% €20,001 to €30,000 2 % €30,001 to €40,000 3 % €40,001 to €70,000 4 % €70,001 to €80,000 5 % Over €80,000 6 %

37 Section 89 the relief will apply to agricultural land situated in a Member State of the European Union. It applies to gifts and inheritances taken on or after 20 November 2008. Section 90 increases the rate of tax on gifts and inheritances from 20% to 22%. It applies to gifts and inheritances taken on or after 20 November 2008.

38 Section 92 aligns the definition of ‘‘financial institution’’ to include financial institutions authorised in another Member State operating in Ireland under a passport arrangement. concisely sets out parameters for disclosure of information and professional advices. Section 1002(1) is amended by replacing the existing definition of ‘‘financial institution’’ in order to align it with the same definition as it appears in other areas of the Principal Act.

39 Section 93 new section 896A delivery of information by a third party where that party is concerned with the making of a trust and the settlor is resident in the State but the trustees are not resident in the State. an authorised officer of the Revenue Commissioners may, by notice in writing, request a party to a settlement to provide details of the settlement. Section 94 Relief available from 100% of the market value of the heritage items or heritage property donated to 80% Restriction will apply on and from 1 January 2009

40 Section 95 Enable delegation to nominate authorised officer Concerns protective notices under S.811 Section 96 Extension of return filing dates for ROS 1 st January 2009 23 rd of month Section 97 Extends recovery proceedings for Collector General

41 S.98 – Revenue Penalties Inserts Chapter 3A S.1077A S.1077B S.1077C S.1077D Chapter 3B S.1077E Applies to other Tax Heads Fixed Penalties

42 S.1077A Definitions Court jurisdictional limits S.1077B Absence of agreement regarding penalty Revenue confirm in writing No agreement within 30 days Revenue petition court Court determines whether taxpayers actions gives rise to a liability

43 S.1077C – Recovery Court determination Recovered as a tax Provision applies to liability before on or after passing of Act S.1077D – Proceedings against admin or estate where the person either agreed in writing to pay the penalties or a court has determined, before the person’s death, that the person was liable to the penalties.

44 S.1077E Defines Qualifying disclosure Unprompted qualify disclosure Category of penalty Deliberately fails Carelessly but not deliberately Other careless behaviour tax or duty underpaid is greater than 15% of the correct tax or duty payable for the relevant period. Specific penalties for VAT CAT Stamp Duty

45 Qualifying disclosure Complete information All matters occasioning a penalty Made in writing Unprompted Qualifying Disclosure Voluntary furnished Before investigation started and Before person is notified by Revenue Prompted Qualifying Disclosure Received notification of Revenue investigation Report indiscretion before “investigation or inquiry starts”

46 CategoryBase PenaltyCo-0p onlyCo –op & % of tax underpaid Prompted qualifying dis Unprompted qualifying dis Deliberate100%75%50%10% Careless with signif conseq. 40%30%20%5% Other Careless20%15%10%3%

47 Significant consequences Where tax underpaid is greater than 15% of previously declared Fraud & Neglect changed Now – Deliberate Careless

48 S. 99 and Schedule 6 provide for technical amendments S.100 - Capital Services Redemption Account S101 – “care and management’’ of taxes and duties.

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