Budget 2012 Live Updates

Michael Noonan, Minster for Finance is now delivering his Budget 2012 speech to Dáil Éireann.

Budget 2012 6 December 2011The Minister has announced the following Tax measures:

Corporation Tax

  • No change in the 12.5% Corporation Tax rate.
  • A special Assignee Relief Programme to attract multinationals’ executives to Ireland
  • New Foreign Earnings deductions for individuals developing markets abroad
  • International financial services sector boosted by measures to be announced in Finance Bill
  • First €100,000 of Research & Development expenditure to be allowed for R&D credit.
  • Corporation Tax exemption for new companies extended for a further 3 years.

Farming

  • Farm transfers to the next generation are to be incentivised
  • Significant fall in the rate of stamp duty for farmland and other commercial property
  • Retirement relief for CGT to be modified – no detail of this measure included in the Budget Speech.
  • Farm partnerships to be encouraged by 50% Stock relief for participating farmers and existing 100% Stock relief for young farmers
  • The 9% rate of VAT to apply to Open Farms

Air Travel Tax

  • Government are ‘prepared to negotiate’ with Aer Lingus and Ryanair to incentivise tourist routes into Ireland

Construction Sector

  • Stamp duty for commercial property to be cut to 2% overnight – the previous top rate was 6%
  • The current rates for residential property will apply
  • CGT exemption for properties bought between tonight and the end of 2013 – if they are held for 7 years.
  • Commercial properties – NAMA can now approve rent reductions in certain cases, even in cases where ‘upward only rent review’ clauses apply
  • Those who bought homes at the end of the property boom will gain by an increase in mortgage interest relief to 30% for those homeowners
  • First time buyers will get 25% mortgage interest relief for property purchases in 2012

Property Reliefs

  • Detailed policy measures to be made in Finance Bill
  • s.23 Reliefs to small scale investors will not be cut
  • Surcharge of 5% will apply to sheltered income where one’s income is over €100,000

Income Tax

  • No increase in Income Tax bands, rates or credits.
  • Universal Social Charge to be changed to help low paid seasonal & temporary workers – the exempt income level rises from €4,004 to €10,036
  • the USC will be collected on a cumulative basis in 2012

Value Added Tax

  • The Standard rate of VAT will rise by 2% to 23%
  • The other rates of VAT remain unchanged

Capital Taxes

  • Capital Acquisitions Tax & Capital Gains Tax go from 25% to 30%
  • Standard Exemption for Capital Acquisitions Tax (parent-child transfers) cut from €332,084 to €250,000

Investment Income

  • Deposit interest retention tax (DIRT) increased from 27% to 30%
  • PRSI will cover rental and investment income from 2013

Approved Retirement (ARF) Funds

  • ARF ‘imputed distribution’ charge increased to 6%
  • ARF tax on death of a child over 21 goes to 21%
  • Citizenship condition on domicile levy is scrapped
  • Carbon Tax goes up from €15 to €20 per tonne – a 33% increase. This increase does not apply to home heating oil or solid fuel.
  • Double income tax deduction for Carbon tax for farming
  • VAT Refunds on farm buildings will include wind turbines

Other

  • The income tax relief on pension contributions remains unchanged – tax relief will remain at the marginal rate of tax.
  • A household charge of €100 per household is being introduced. Certain limited waivers will apply.
  • Motor Tax increases to raise €47 million
  • A new export refund scheme will apply to exports of motor cars
  • The existing tax exemption for the first 26 days of disability benefit per annum is to be abolished. The Minister described this as ‘an incentive for absenteeism’

Excise Duty

  • Alcohol excise duty is unchanged.

 

 

 

 

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