BUDGET 2013
PENSION
1. MAXIMUM ALLOWABLE PENSION FUND
Changes to be put in place in 2014 to reduce the maximum allowable pension fund (the Standard Fund Threshold) to reduce the maximum tax relieved pension to € 60,000 pa.
2. ACCESS TO ADDITIONAL VOLUNTARY CONTRIBUTIONS
From the passing of the Finance Bill 2013 – a once-off option to access 30% of Additional Voluntary Contributions (AVCs) in a 3 year window.
3. PENSION LEVY
Pension Levy to cease from 2014.
INCOME TAX
1. PRSI
The weekly PRSI allowance is being removed. Increase in the minimum annual PRSI contribution for self-employed earners from €253 to €500.
2. UNIVERSAL SOCIAL CHARGE
The standard rates of USC will apply to people aged 70 years of age and over and medical card holders (PAYE/Self employed income earner) earning €60,000 and above with effect from 1 January 2013.
3. MATERNITY BENEFIT
This will be taxable with effect from 1July 2013
4. TOP SLICING RELIEF
Will no longer be available from 1st January 2013 on ex-gratia lump sums where the non-statutory payment is €200,000 or over.
5. FOREIGN EARNINGS DEDUCTION
The Foreign Earnings Deduction is being extended for employment related travel to certain African countries.
6. CHARITABLE DONATIONS
A blended rate of relief of 31% on charitable donations is being introduced.
7. BIK ON PREFERENTIAL LOANS
The interest rate used in calculating the taxable benefit is being increased from 12.5% to 13.5% other than for home loans.
The specified rate used to calculate the taxable benefit from home loans is decreased from 5.0% to 4.0%.
TAX ON SAVINGS
DEPOSIT INTEREST RETENTION TAX AND EXIT TAX ON LIFE ASSURANCE POLICIES AND INVESTMENT FUNDS
DIRT together with the rates of exit tax that apply to life assurance policies and investment funds is being increased to 33% for payments made annually or more frequently and to 36% for payments made less frequently than annually.
The increased rates will apply to payments, including deemed payments, made on or after 1st January 2013.
LOCAL PROPERTY TAX
Local Property Tax (LPT) will be charged at 0.18% of market value up to €1 million.
A rate of 0.25% will apply to any excess value over €1 million.
Collection of the Local Property Tax (LPT) will commence on 1 July 2013 and will be administered by the Revenue Commissioners.
A half year of LPT will be payable in 2013, full year payable in subsequent years.
The Household Charge will cease with effect from 1st January 2013.
The Non-Principal Private Residence (NPPR) Charge will cease with effect from 1 January 2014.
CORPORATION TAX
3 YEAR RELIEF FOR START UP COMPANIES
This relief is being extended to allow any unused relief arising in the first 3 years of trading due to insufficiency of profits to be carried forward for use in subsequent years. This is subject to the maximum amount of relief in any one year not exceeding the eligible amount of Employers PRSI in that year.
R&D TAX CREDIT
The R&D Tax Credit regime provides for a 25% tax credit for incremental expenditure on certain research and development (R&D).
Finance Act 2012 provided that the first €100,000 of qualifying R&D expenditure would benefit from the tax credit without reference to the original 2003 threshold. The amount of expenditure is being increased to €200,000.
CLOSE COMPANY SURCHARGE
The de minimis amount of undistributed investment and rental income which may be retained by a close company without giving rise to a surcharge on such income is being increased from €635 to €2,000.
EMPLOYMENT & INVESTMENT INCENTIVE (EII)
The EII scheme is being extended from 2014 to 2020
RELIEFS & EXEMPTIONS
FILM RELIEF
The Film Relief Scheme is being extended to 2020.
AVIATION SECTOR
An accelerated capital allowance scheme, over seven years, in relation to construction of certain aviation-specific facilities is to be introduced.
CAPITAL TAXES
CAPITAL GAINS TAX
Increased to 33% and applies to disposals made after the 5th December 2012.
CAPITAL ACQUISITIONS TAX
Increased to 33% and applies in respect of gifts or inheritances received after the 5th December 2012.
The current group tax free thresholds are being reduced by 10%. This reduction applies in respect of gifts or inheritances taken after the 5th December 2012.
EXCISE DUTIES
VEHICLE REGISTRATION TAX (VRT)
Rates of VRT are being increased with effect from 1st January 2013.
MOTOR TAX
Motor tax rates across all categories will increase with effect from 1st January 2013.
ALCOHOL PRODUCTS
The excise duty on a pint of beer or cider, and a standard measure of spirits is being increased by 10c (including VAT).
Duty on a 75cl bottle of wine is being increased by €1 (including VAT) with pro-rata increases on other products.
TOBACCO PRODUCTS
The excise duty on a pack of 20 cigarettes is being increased by 10c (including VAT) with a pro-rata increase on the other tobacco products, with effect from midnight on 5th December 2012.
The excise duty on roll-your-own tobacco is also being increased by 50c per 25g pouch.
These increases will take effect from midnight on the 5th December 2012.
REAL ESTATE INVESTMENT TRUSTS (REITs)
The internationally recognised model for property investment – Real Estate Investment Trusts (REITs) – is to be introduced.
VAT
INCREASE IN CASH RECEIPTS VAT ACCUMULATING
The annual VAT cash receipts basis threshold is being increased from €1 million to €1.25 million with effect from 1st May 2013.
