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| Written by Donald Cronin | |
| Wednesday, 15 October 2008 | |
 Income Levy
Business Taxation Existing scheme of accelerated capital allowances for companies in relation to certain energy efficient equipment to be extended to include energy efficient data server systems, electricity provision equipment and control systems. Indirect Tax Motor tax rates are to increase by 4% for cars below 2.5 litres and CO2 bands A to D. A 5% increase will apply to cars above 2.5 litres and CO2 bands E, F and G. These new rates will apply for motor tax discs taken out on or after 1 January 2009. Other Measures Online Pay and File - a general extension to existing deadlines where returns and payments are made via the Revenue Online System (ROS). Details to be announced. Property A new local authority charge of €200 per dwelling will come into effect in 2009. This will be payable by the owners of private rented accommodation, holiday homes and other non-principal residences. This will not apply to any new dwellings as yet unsold. Other Measures Farmers Stock Relief, Farm Pollution Control Relief and Farm Consolidation Relief is being extended for a further two years. Stamp Duty Relief for young trained farmers will be extended for a further four years to 2013. No change to the Farmers flat rate VAT for 2009. Business Taxation Measures will be introduced to bring forward the payment dates for companies paying more than €200,000 corporation tax on their profits in 2009. Details to be announced. Business Taxation Proposal to introduce an exemption (within certain limits) on Corporation Tax and Capital Gains Tax for new start-up companies in their first three years of operation. Details to be announced. Indirect Tax Excise duty on cigarettes will increase by 50c per packet of 20. Excise duty on a bottle of wine will increase by 50c. Excise duty will increase by 8c on a litre of petrol. No change to excise duty on beer, cider, spirits or diesel. These excise duty changes are effective from midnight tonight. There is also an intention to reduce excise duties on low alcohol beer and low alcohol cider. Business Taxation Commission on Taxation to investigate options in the area of Intellectual Property which could provide jobs and revenue to the State. Income Tax Tax relief for unreimbursed medical expenses will now be at the standard rate as opposed to the full marginal rate of tax. Nursing home expenses will not be standard rated until 1 January 2010. Other Measures The payment date for Capital Gains Tax liabilities is being accelerated in 2009. Details to be announced. Income Tax The annual earnings limit for tax relieved pension contributions decreases from €275,000 to €150,000. Other Measures The Government is reviewing the introduction of a carbon levy. The Commission For Taxation is examining this and will report in September 2009. A decision will be made in Budget 2010. Other Measures A Car Parking levy of €200 is being brought in where employers provide a car parking space to employees in major urban areas Stamp Duty Top rate of stamp duty on commercial property comes down from 9% to 6% and the Government commits to keep it at this rate during the lifetime of the Government. No change to the residential stamp duty rates. Other Measures The rate of Capital Gains Tax is to increase by 2% to 22%. This measure will be subject to ongoing review. This is effective from midnight on 14 October 2008. Stamp Duty Stamp duty on combined ATM and Debit Cards will decrease from €10 to €5. This will be financed by increasing the rate of stamp duty on cheques from 30c to 50c. Business Taxation Research and development tax credit increases from 20% to 25%. Further enhancements to be considered in the forthcoming Finance Bill. Income Tax DIRT increased to 23% on ordinary deposit accounts and 26% on certain other savings products (to be announced). Increased rates will apply to payments and deemed payments on or after 1 January 2009. Income Tax Mortgage interest relief for first time buyers will be amended as follows: From 1 January 2009 tax relief is available at 25% for the first two years. In years 3-5 tax relief is available at 22.5% and in years 6-7 relief is available at 20% These provisions are being brought in for all first time buyers who purchased from 1 January 2005. Relief for non-first time buyers will be reduced from 20% to 15%. Other Measures Betting tax up 1% to 2%. Business Taxation No change to the corporation tax rate of 12.5% Other Measures An air travel tax for departures from Ireland of €10 is to apply. This will be €2 for shorter flights. Effective from 30 March 2009. Income Tax Standard tax rate band increases by €1,000 for a single person; and €2,000 for married couple with two incomes. Indirect Tax The higher rate of VAT of 21% is to increase by 0.5% This is effective from 1 December 2008. The lower rates of VAT shall remain unchanged. Budget Framework Single Government equity initiative which will see the Government take an equity stake in affordable housing. Budget Framework Gross capital spending will amount to over 5% of projected Gross National Product in 2009. This amounts to €8.2bn. It is intended to maintain this rate of investment in 2010 and 2011. Childcare Child benefit payment for children over 18 will cease from 1 January 2010 and be halved from 1 January 2009. Early childcare supplement will cease at 5 and a half years of age. Budget Framework Automatic entitlement to Medical Card abolished for certain persons over 70 and this measure is introduced from 1 January 2009. Budget Framework Spending on health up 2.1% to €15.8bn; on social welfare up 8.4% to €19.6bn; and on education up 2.7% to €8.7bn. Other Measures Government Ministers to take a 10% pay cut. Also other Public Servants in senior management positions to consider whether it is appropriate in their circumstances to take a pay cut.      |