At time of writing (mid-November), the 2019 Finance Bill is meandering through the Oireachtas. In broad terms, it was a quiet budget day on 8 October last in tax terms due to stated concerns about the potential impact of a no deal (or “hard”) Brexit. Minister Donohoe announced the availability of €1.2 billion to support those most affected if a no deal Brexit happens, with about half that for the agriculture/enterprise/tourism sectors and badly hit regions.

A very brief outline of tax changes to date (under summary headings) is:

Personal/Employee Taxes

There is no change to income tax bands or rates. Other than extending (by a year; to 31 December 2020) the reduced 2% rate of for medical card holders earning less than €60,000, there are no USC changes.

The home carer credit is increased again (to €1,600; from €1,500).

The earned income credit increases by €150 to €1,500, which is €150 short of the PAYE credit but perhaps that final gap can be bridged next year. The self­employed can also now “signon” if their business fails, claiming similar benefits to employees made redundant.

The 0% BIK rate for electric vehicles has been extended (by a year) to 31 December 2022 for vehicles with an original market value (OMV) of €50,000 or less. More places to plug­in to recharge on the way too.

The special assignee relief programme (“SARP”) and the foreign earnings deducotin (“FED”) have both been extended (by two years) to 31 December 2022.

The Group A CAT threshold increases from €320,000 to €335,000.

Following much lobbying, an increase in the current €1 million lifetime limit for CGT entrepreneur relief was widely anticipated to bring it more in line with the UK £10 million limit. The pause button was hit on that for now, though it seems likely to be revisited again.

Business Taxes

The EII scheme, now based on a self-­certification model since changes last year, has been tweaked again. With effect from 9 October, full EII relief is now available in the year of investment (rather than the current 30/40 with the remaining 10/40 four years later if conditions are met). Also, from 1 January next, the annual investor investment limit increases to either €250,000 (from €150,000) or, if the investor agrees to hold the shares for ten years, €500,000.

The R&D tax credit regime is to be (once EU State Aid approval comes through) improved for small and micro
(essentially, SME) companies. The two main changes (there are a few) are the rate of credit is increased (from 25% to 30%) and pre-­trading spend qualifying for R&D credit can be offset against VAT/PAYE costs in the same period.

As transfer pricing is becoming a bigger deal internationally, our rules are again being updated from 1 January next, and flagged as also due to apply to the SME sector once a ministerial order is signed.

The employer PRSI rate increases again (from 10.95% to 11.05%) from 1 January 2020.

Due to concerns about individual investors underpaying tax on dividends, the rate of dividend withholding tax (“DWT”) increases (from 20% to 25%); further changes may be on the way in 2021.

There are minor changes to the Key Employee Engagement Programme (“KEEP”), which is designed to help SMEs attract/retain talent by deferring taxation of gains on employee shares until sold.

Property Sector

The non-­residential stamp duty rate jumped again (from 6% to 7.5%). A rate of 2% was often seen as palatable in transferring assets as part of a lifetime succession planning exercise but 7.5% can prove expensive and means many may now simply transfer assets under a will (so no stamp duty applies).

Two­ year extensions were announced for Help­ to ­Buy (to 2021) and the Living City Initiative (2022).

Agri Sector

Another quiet Budget/Finance Bill for the farming community (so far…) with no new tax measures, just a three­ year extension (to 2022) of CGT farm restructuring relief. But Brexit is out there…

Other

From 1 January next, lots of orally consumed food supplements will be more expensive as the “concessional” VAT zero­-rating is replaced by the 13.5% rate.


And finally, as our planet is apparently under threat from carbon dioxide emissions, there are a few “green”­inspired changes in areas like carbon tax, VAT and VRT.

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