Here are the main tax points of Minister Paschal Donohoe’s Budget 2020 Speech, which was announced earlier this afternoon.
Income Tax & USC
The Home Carer Tax Credit will increase from €1,500 to €1,600
The Earned Income Tax Credit will increase from €1,350 to €1,500. This credit is claimable by self-employed individuals in lieu of the Employee Tax Credit of €1,650.
The reduced rate of USC for medical card holders (0.5% on the first €12,012 earned, 2% on the balance) will be extended until the end of 2020.
The Key Employee Engagement Programme (KEEP) and Employment and Investment (EII) schemes will be enhanced.
The Special Assignee Relief Programme (SARP) and Foreign Earnings Deduction schemes are to be extended in their current formats until 31 December 2022.
The Research and Development Tax credit will be improved for small and micro companies.
Capital Acquisitions Tax
The Group A tax free threshold which applies primarily to gifts and inheritances from parents to their children is being increased from €320,000 to €335,000. This increase applies to gifts or inheritances received on or after 9 October 2019.
The rate of stamp duty on non-residential property transactions is being increased from 6% to 7.5% from Budget night.
The existing 6% rate will apply to up to 1 January 2020, where a binding contract existed prior to Budget day (8th October 2019).
The relief that small microbreweries enjoy from Alcohol Products Tax will be extended to breweries producing between 40,000 and 50,000 hectolitres of beer per annum. Qualifying microbreweries pay only half the amount of Alcohol Products Tax (APT) paid on beer that they produce.
Dividend Withholding Tax
The rate of Dividend Withholding Tax is being increased from 20% to 25%, from 1 January 2020.
A further change will apply from 1 January 2021, where the rate of this tax will be the rate of tax that the recipient pays on their PAYE income, ie 20% or 40%.
Carbon Tax increases by €6 to €26 per tonne.