Revenue’s Fascinating Report on Irish Farming

October 23, 2015

Revenue’s Statistics & Economic Research Branch have this week released a fascinating report into the Irish farming sector.

The report includes a wealth of interesting, and some plainly odd, facts on Irish agriculture.

Irish grain field

Here are a few that caught my eye:

  • Over half of all farms earned less than €20,000 in 2012.
  • Only 5% earned more than €100,000.
  • Off-farm PAYE earnings account for nearly half of average family farm income. The old “farmer v PAYE worker” divide is now a thing of the past.
  • Only 18 per cent of farmers who file tax returns are aged under 40.
  • Revenue data records 273 farmers over 90 years old, and a further 3,315 aged over 80.
  • “A small (unspecified) number of incorporated farmers” pay €28 million in Corporation Tax. If each pays the 12.5% rate, that’s a cool €224 million in profits.
  • 89% of farmers filed an online Form 11 tax return in 2013 – so the stereotype of farmers as tech luddites is very much unfounded.

The full report is on the Revenue website


Budget 2015: The Full List of Measures

October 14, 2014

Here is the full list of Tax measures included in Budget 2015.

Some, but not all, of  these measures were unveiled in Minister Noonan’s Budget Speech to the Dáil this afternoon.

Michael Noonan announces Budget 2015.

Michael Noonan announces Budget 2015.

Income Tax 

The standard rate band of income tax increases by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.

The higher rate of income tax falls from 41% to 40%.

USC

The USC rates and bands for 2015 are as follows:

Incomes of €12,012 or less are exempt.

  • Otherwise the first €12,012 is @ 1.5%
  • From €12,013 to €17,576, USC is @ 3.5%
  • From €17,577 to €70,044, USC is @ 7%
  • From €70,044 to €100,000, USC is @8%
  • PAYE income in excess of €100,000 faces a USC charge of 8%
  • Self-employed income in excess of €100,000 faces a USC charge of 11%.

There are now 8 different bands of USC, a tax which is now more complex than ever before.

Tobacco 
The excise duty on a packet of 20 cigarettes rises  by 40 cents (including VAT). A  a pro-rata increase on other tobacco products will also take immediate effect.

The excise duty on roll-your-own tobacco rises by an additional 20 cents (including VAT) per 25g pouch, again immediate effect.

Betting Duty
Betting Duty is being extended in 2015 to remote operators and betting exchanges.

Vehicle Registration Tax (VRT)

The VRT reliefs on the purchase of

  • hybrid electric vehicles,
  • plug-in hybrid electric vehicles,
  • plug-in electric vehicles, and
  • electric motorcycles

are being extended to 31 December 2016.

Microbreweries
The special relief on Excise Duty, which cuts the standard rate of Alcohol Products Tax by 50% on beers from microbreweries producing 20,000 hectolitres or less per annum is being extended to microbreweries  produce 30,000 hectolitres or less per annum.

Mineral oil

A 30 day deferral of excise duty on mineral oil is to be introduced.

Natural Gas as a Transport Fuel

The excise rate for Natural Gas and BioGas as a propellant (ie transport fuel) will be set at the current EU Minimum rate and this rate will be held for a period of eight years.

Artists’ Exemption 

The threshold for the artists’ exemption from Income Tax is being increased from €40,000 to €50,000.

The Exemption is also being extended to non-resident artists, who are resident in another EU/ EEA State.

The Foreign Earnings Deduction is being extended for a further 3 years until the end of 2017 and is now widened to  include Chile, Mexico and certain unspecified countries in the Middle East & Asia.

The number of qualifying days abroad is being reduced from 60 to 40.

The minimum stay in a country is cut to 3 days and now includes travelling time.

The Special Assignee Relief Programme is also being extended for a further 3 years, until the end of 2017.

The upper salary threshold is being removed.

The residency requirement is being amended to only require Irish residency.

The exclusion of work abroad is also removed.

The requirement to have been employed abroad by the employer is being reduced to 6 months.

Employment and Investment Incentive
The EII is being amended “to raise company limits, increase the holding period by 1 year and include medium-sized companies in non-assisted areas and internationally traded financial services”. These measures are subject to EU approval.

Hotels, guest houses and self-catering accommodation will remain eligible for a further 3 years, and the operation and management of nursing homes will be included for  the next 3 years.

Seed Capital Scheme
The scheme is being rebranded as “Start-Up Relief for Entrepreneurs” (SURE) and being widened to included those who have been unemployed up to 2 years.

Rent-A-Room  Scheme

The threshold for exempt income under the Rent-A-Room Scheme is being increased from €10,000 to €12,000 per annum.

Water Charges
Tax relief at 20% will be provided on water charges, up to a limit of €500 per annum. Relief will be given annually for charges paid in the previous tax year.

Home Renovation Incentive
The Home Renovation Incentive (which allows a 13.5% tax rebate on refurbishment, extension and improvement work) will now include rental
properties “owned by landlords subject to income tax”.

Capital Gains Tax

The CGT incentive relief, which provided Capital Gains Tax exemption in respect of the first 7 years of ownership, for properties purchased between 7 December 2011 and 31 December 2014 will not being extended beyond 31 December 2014.

Where property purchased in this period is held for seven years, the gains accrued in that period will not attract CGT.

Windfall Tax

The 80% Windfall Tax on land disposal gains & land development profits attributable to planning decisions is being abolished from 1 January 2015.

Farming

The amounts of long term land leasing income exempt from Income Tax rises by 50%.  A new threshold is being introduced for lease periods of 15 or more years, with income of up to €40,000 being exempted.

The long term land leasing income exemption is also being extended to companies which lease land.

The 40 years of age threshold for leasing relief is being abolished.

 

Income averaging, which allows full-time farmers to calculate their income tax position based on rolling average earnings over 3 years, will now be revised to calculate incomes over 5 years.

It is also extended to farmers with other income from “on-farm diversification”.

 

The farmer’s flat-rate addition rises from 5% to 5.2%. This addition VAT-unregistered farmers for VAT incurred on their farming inputs.

 

The deadline for Capital Gains Tax relief for farm restructurings  is being extended to 31 Decemeber 2016.

CGT Retirement Relief can now apply to land that has been leased for up to 25 years in total (increased from 15) ending with disposal.

Retirement Relief is being extended to land currently let under conacre (11 month letting) and which is disposed of by 31 December 2016 or enters a long-term (5-25 years) letting arrangement (ending with disposal) by that date.

CAT Agricultural Relief will now only be available:

  • for agricultural property gifted to or inherited by active farmers, and
  • to individuals who are not active farmers but who lease out the property on a long-term basis for agricultural use to active farmers.

In addition, 5-35 year Agricultural leases  to active farmers will be exempt from Stamp Duty.

Consanguinity relief, which halves the applicable rate of Stamp Duty, will be extended for a period of three years for transferors under 65 years old, where the transferee is an active farmer.

Corporation Tax

The 2003 base year restriction for the R&D Tax Credit is being removed from 1 January 2015.

The limited Corporation Tax relief on trading income (and certain capital gains) of new start-up companies in the first 3 years of trading is being extended until the end of 2015.

This 80% restriction on aggregate capital  allowances in respect of intangible assets (and any interest expense incurred on borrowings to fund the expenditure) will be removed.

The Accelerated Capital Allowances for Energy Efficient Equipment, which incentivises companies to invest in energy efficient equipment, is being extended to the end of 2017.

DIRT

A new relief from DIRT will apply on savings used by first time house buyers towards the deposit on their first home.

The Dept of Finance Summary of 2015 Budget Measures is here.


Budget 2015: The Key Tax Measures

October 14, 2014

The main tax measures of Minister Noonan’s Budget 2015 Speech, announced this afternoon, are as follows:

Budget 2015

Corporate Taxes

The 12.5% Corporation Tax rate remains unchanged.

The R&D Tax Credit base year provisions will be phased out.

The 3 year Corporation Tax exemption for start-ups is to be extended.

A new “Knowledge Development Box” will be introduced to attract new inward investment.

The “Double Irish” tax loophole is to be eliminated. All Irish-registered trading companies must also be tax-resident here. This will apply with immediate effect for new companies and will be phased in for existing companies.

Farming

To encourage long term leasing of land, the income tax threshold for land leasing is to be extended by 50%.

The CGT retirement relief on farm land is to be extended.

The existing CAT relief on agri land is being restricted to actively farmed land.

Stamp duty is being scrapped on long term land leasing.

The stamp duty relief for farm transfers within families is being extended.

The range of farmers’ Income Averaging is extended from 3 to 5 years.

Income Averaging is also being extended to farmers with diversified farm income.

The farmers’ flat rate VAT addition is up from 5% to 5.5%.

Tourism

The 9% VAT rate for tourism enterprises is being retained.

Pension Levy

The 0.6% pension levy is being scrapped at the end of 2014.

Property Market

The Home Renovation Incentive has attracted €190m worth of work so far.  It is being extended to rental properties whose owners are registered for income tax. This comes in with immediate effect.

The 7 year CGT exemption is being abolished.

A refund of DIRT tax will apply to first time buyers who use their savings to buy their first home.

The existing 80% windfall tax is being abolished.

Water Charges

Income Tax relief at the standard 20% rate will apply to water charges paid by householders.

SME Sector

The Foreign Earnings Deduction is being widened and extended to a range of new countries.

Income Tax

Today’s budget is intended to form the first stage in a 3-year programme of income tax reform and reductions.

The USC entry point will be increased to approx €12,000 and the other USC bands will be increased accordingly.

The 2% USC rate is being cut to 1.5%

The 4% USC rate is being cut to 3.5%

The 41% Income Tax rate is being cut t0 40%.

The standard rate (20%) tax band is being increased by €1,000 per annum.

A new USC rate of 8% for income in excess of €70,000.

A new USC rate of 11% for self-employment income in excess of €100,000.

Excise Duty

Microbreweries will enjoy an increase an the annual excise exemption ceiling. The existing relief for microbreweries was originally introduced in 2005 by Brian Cowen as Minister for Finance.

The price of 20 cigarettes will increase by 40 cents, with a corresponding increase in other tobacco products.

No rise in taxes on alcohol, petrol, diesel or VRT.


VAT Refund Scheme boost for Farmers

April 5, 2011

Ireland’s farmers received a welcome boost today as Revenue announced an extension to the VAT refund scheme for farmers.

Farmers who are not VAT-registered can reclaim VAT paid by them on:

  • farm buildings
  • fencing and other fixed structures
  • land drainage and
  • land reclamation

VAT Refund Boost for Farmers

 

Today, a Revenue eBrief confirms that that VAT refunds may now be claimed in respect of

  • Concrete underpasses,  installed to facilitate the movement of livestock beneath a public road.
  • Hedgerows planted by a farmer for the purpose of stock proofing. This does not include hedgerows grown for decorative, ornamental or domestic shelter purposes.
  • Ploughing and re-seeding works completed as part of a land reclamation project.

 

Eligible farmers can claim VAT repayments on Form VAT58 in accordance with the  Value Added Tax (Refund of Tax) (No. 25) Order 1993, which is also online. Farmers may claim VAT refunds within four tax years of incurring the relevant expenditure.

Please note that this scheme does not apply to VAT-registered farmers, who may reclaim VAT on their regular VAT returns but are subject to VAT on sales of farming produce and livestock.