Conor Kennedy

Law Library

Four Courts

Dublin 7.

Applies to all incomeExcept

Deposit interestCredit Union DividendsCertain Life PoliciesInvestment undertakingsCertain offshore fundsCertain social welfare payments

Calculation1% up to €100,1002% on excess over €100,100 but not exceeding

€250,1203% thereafter

Not applicable to Over 65’s

Single income less than €20,000Double income less than €40,000

Under 65Exemption threshold = €18,304Medical card

No AllowanceDouble rent reliefS.23DonationsCapital allowancesPension contributions

Effective from 1st JanuaryPreliminary tax payments

Difficult to implementApplies to certain urban areasMinisterial orderRate

Default = €200Possible = €100

Reductions10 or more employeesNot used fully in year Job sharingMaternity

Collected by employers through PAYE system

Tax Year 2008 Tax Year 2009 and Subsequent Years

€ € Single Person 35,400 36,400Widowed/single parent 39,400

40,400 Married coupleOne earner 44,400 45,400Two earners 70,800 72,800

Pref loansHome loans - 5%Other  - 12.5%

Bikes€1,000 expended by employerSafety equipSalary sacrificeOnce every 5 years

1st January 2009

Business mileage Business mileage Percentage of original

lower limit upper limit market value

(1) (2) (3)kilometres kilometres per cent24,000 32,000 2432,000 40,000 1840,000 48,000 1248,000 — 6

CO2 Emission Categories

Category CO2 Emissions (CO2g/km)

A 0g/km - 120g/km B 120g/km - 140g/kmC 140g/km – 155g/kmD 155g/km – 170g/kmE 170g/km - 190g/kmF 190g/km - 225g/km

G More than 225g/km

Category A - Opel Corsa & Toyota Prius 1.5

Category B - Ford FocusCategory C - Audi A3Category D - Ford Mondeo 2litreCategory E - BMW 330iCategory F - Jaguar XJ6Category G - Range RoverMinisterial Order

Business mileage Vehicle Vehicle

VehicleCategories Categories Categories

lower upper A, B and D and E F and G C

(1) (2) (3) (4) (5) km km % % %— 24,000 30 35 4024,000 32,000 24 28 3232,000 40,000 18 21 2440,000 48,000 12 14 1648,000 — 6 7 8

S. 8 - Health Expenses1st January 2009 – standard rate Nursing home expenditure – unaffected

S.9 Share SchemesWithdrawal of approval for failing to file

returnsS.10 Share Schemes

Anti-avoidance regarding exchangesEffected from 2oth November

S.11 Share SchemesPenalties for failing to report

S.12 - Restricted & Forfeitable SharesS.128D – Restricted shares

Tax reduced depending on retention periodPeriod 1 – 5 yrsAbatement 10% - 60%

S.128F – Forfeited SharesShares acquired & assessed on MVSubsequently forfeitedRepayment by Revenue

Effective from 20th November

Section 825B relief to non Irish domiciled employees employed and paid by the overseas employer period of at least three years. from a treaty country but outside the EEA relief ensures tax in Ireland will be the greater of: 

total employment earnings remitted to Ireland; and1st €100,000 plus 50% of the earnings over this

amount. repayment of taxes otherwise payable overseas employer to operate PAYE/PRSI.

S.13Example US assignee earned €300,000 Remitted €150,000Taxes in Ireland on greater of

€150,000 or €100,000 + €100,000 (50% of €200,000)

Year of assessment 2009

S.14 From 1 January 2009 the relief due to first-

time buyers will be as follows— 25 % for years 1 and 222.5 % for years 3, 4 and 5, and20% for years 6 and 7.

The rate of mortgage interest relief for non-first-time buyers will be reduced from 20% to 15%.

 

S.15819 of the Taxes Consolidation Act 1997 in determining the number of days spent in

the Statean individual shall be present in the State for

a day if present in the State at any time during that day

Section 16 amends the formula to determine the standard and

personal fund thresholds to be indexed in line with an earnings adjustment factor in future years.

Formula in section 790A (2) relating to the determination of the annual earnings limit for tax relieved pension contributions. The amendments ensure that where no indexation is provided for, the thresholds and the annual earnings limit will remain at the previous year’s amounts.

Finally, the section restricts the annual earnings limit from €254,000 to €150,000 for 2009.

S.17 – Farm pollution scheme – extends – 31/12/2010

S.18 - Farmers stock relief extended to 31/12/2010

S.19 - IBA allowances 2 yrs after sale to claim full allowsPreviously 1 yr Reflects market trendsEffective from 14/10/2008

S.20 capital allowances palliative care units. in-patient care beds being reduced from 20 to 8.

S.21 – EU Seveso DirectiveHinder regeneration of docklands

S.22 – Large hotel projectsNo loss of allows due to delays

S.23 – Transfer pricing Prohibited deductionsConnected parties

S.24 Re-insurance companiesS.25 Exemption for non residents

Debt instrumentsS.26 Dirt increased to 23% - 1st Jan

S.27 – Life policies & Investment FundsIncrease tax 23%1st January 2009

S.28 – Film reliefIncreases investment to €50,000. Also increase in tax relief available from 80% to 100%.Ministerial Order

S.29 Business Expansion and Seed Capital SchemesExtends by three months, the time by which a claim may be

made in certain limited circumstances.S.30 Allowance for Know how

Introduces anti-avoidance provisions

Start up companies – 14th OctoberRelief from CT for 3 yrsApplies also to gains on disposal of trade assetsTrades excluded

Service companiesMining companies etc liable @ 25%Old trades/businesses

Relief where CT less than €40,000Marginal relief up to €60,000Minister to appoint commencement date

Marginal Relief3 x (T – M) x A +B

T

Where T = Total CT payableM = Lower Relevant maximum limitA = CT on trading incomeB = CT on Gains on trade assets

ExampleTax on Trading income 43,000Tax on trading gain 5,000Total Tax 48,000

Tax Calculation3 x (€48,000 – €40,000) x €43,000 + €5,000

€48,000Tax Payable = €24,000

S32 – Manufacturing relief technical adjustmentRing fencing of deductions

S.33 Tax TreatiesDelay in ratification proceduresTreaty to be given effect from date of signing

S.34 – R&D Base year 2003Credit increased to 25%Credit can be used in previous yearCan claim credit as repayment

S.35 – R& D credit on buildings35% of expenditure for R&DActivities for at least 4 years Credit claimed in year incurred10 yr clawback

S.36 – Limitation of tax creditsS.37 – 100% Capital Allowances

CompaniesExtended to

Information and Communications Technology,Heating and Electricity Provision,Ventilation and Air-conditioning (HVAC) Control Systems,Electric and Alternative Fuel Vehicles

S.38 – Large companiesCT of at least €200,0001st instalment due in mth 6 of current period

Lower of either 50% of current or 45% of previous 2nd instalment due in mth 11 of current periodAggregate payment must be 90%Balance due on filing returnProvision for top up for chargeable gains

S.39 ensure that certain interest and royalty payments and employer paid medical insurance premiums paid in accordance with corporation tax rules.

S.40 -Amends Sch 4 exempts from tax Institute of Public Health in Ireland Limited and the Private Residential Tenancies Board

 

Section 41 Tax treatment of certain venture fund managers. Investment held for at least six years, in the

shares or securities of a private company which is:Carrying on a business set-up and commenced on

or after 1 January 2009,andCarrying on a business of research, development or

innovation activities; Profits arising from the investment taxed

12.5% for companies and 15% for partnerships

S.42 – Remittance basis for UK assetsS.43 – Anti-avoidance

Connected partiesPrevents artificial losses20 November 2008

S.44 CGT rate now 22%15th October 2008

S.45 Pharmaceutical Soc of IrelandNew body

S.68 Technical amendment to S.3 dealing with immoveable goods

S.69 – amend S.7A Opt to tax ceases where landlord occupies

S.70 amends S.7BWaiver in VAT groups

S.71 – Travel AgentsMargin scheme VAT on profit marginBought in services – no VAT entitlementEffective from 1st January 2010

S.72 – Standard rate increased to 21.5%Effective from 1st December 2008

S.73Amedment of S.12S.74 Unjust enrichment

windfall gain if that tax is repaid. Tax not borne by trader but passed on in the price

charged for goods and services. Amendment

Revenue must refund unless refund result in the unjust enrichment.

a claim for refund of an overpaid amount must set out full details of the case and the claimant must furnish any relevant documentation requested by Revenue.

S.75 - regulations relating to the operation of the travel agent’s margin scheme.

S.76 amends 1st Sch by removing the exemption for agency services in the arrangement of passenger transport or accommodation with effect from 1 January 2010.

S.77 – 0% to margin scheme services, for bought-in services are

availed of by persons travelling outside the Community.supply of tea and coffee in non drinkable form e.g. tea

leaves, tea bags, ground coffee etc. is zerorated.supply of tea and coffee in drinkable form is not zero-

rated.

Section 79 - e-stamping of instruments for stamp dutyMajor strategic development Anticipated 90 per cent of cases. Commencement Order.

Section 80 Amendment of section 5Payment of stamp duty in bulk

Section 81 an incentive to encourage the presentation of instruments Measure in anticipation of the introduction of

e-stamping, to facilitate a smooth transition

Section 82 Sub-salesResting in contractLicencesAgreement for leaseSubject to a Commencement Order being made.

Section 83Exchange of properties

Section 84Young trained farmersLand transfersExempt to 31/12/12

Section 85Relief on sale on subsequent reinvestmentPeriod – 18 monthsExtended to June 2011

Section 86 – ATM Cards

Description Old New € €

ATM cards 5 2.50Debit cards 5 2.50 ATM/Debit cards 10 5

 

S.87 – Amendment to Sch 1Cheques – rate - €0.30 to €0.50 15 October 2008. exemption on share transfer forms where the

duty is €10 or less after the enactment of the Bill. Non-Residential Property Rates

 Aggregate Consideration Rate of Duty Up to €10,000

Exempt€10,001 to €20,000 1%€20,001 to €30,000 2 %€30,001 to €40,000 3 %€40,001 to €70,000 4 %€70,001 to €80,000 5 %Over €80,000 6 % 

Section 89 the relief will apply to agricultural land situated in a Member State of the European Union. It applies to gifts and inheritances taken on or after 20 November 2008.

 Section 90 increases the rate of tax on gifts

and inheritances from 20% to 22%. It applies to gifts and inheritances taken on or after 20 November 2008.

Section 92aligns the definition of ‘‘financial institution’’ to

include financial institutions authorised in another Member State operating in Ireland under a passport arrangement.

concisely sets out parameters for disclosure of information and professional advices.

 Section 1002(1) is amended by replacing the existing definition of ‘‘financial institution’’ in order to align it with the same definition as it appears in other areas of the Principal Act.

 

Section 93new section 896A

delivery of information by a third party where that party is concerned with the making of a trust and the settlor is resident in the State but the trustees are not resident in the State.

an authorised officer of the Revenue Commissioners may, by notice in writing, request a party to a settlement to provide details of the settlement.

Section 94Relief available from 100% of the market value of

the heritage items or heritage property donated to 80%

Restriction will apply on and from 1 January 2009

Section 95Enable delegation to nominate authorised

officerConcerns protective notices under S.811

Section 96Extension of return filing dates for ROS1st January 200923rd of month

Section 97Extends recovery proceedings for Collector

General

S.98 – Revenue PenaltiesInsertsChapter 3A

S.1077AS.1077BS.1077CS.1077D

Chapter 3BS.1077E

Applies to other Tax HeadsFixed Penalties

S.1077ADefinitions Court jurisdictional limits

S.1077BAbsence of agreement regarding penaltyRevenue confirm in writingNo agreement within 30 daysRevenue petition courtCourt determines whether taxpayers actions

gives rise to a liability

S.1077C – RecoveryCourt determinationRecovered as a taxProvision applies to liability before on or after

passing of ActS.1077D – Proceedings against admin or estate

where the person either agreed in writing to pay the penalties or

a court has determined, before the person’s death, that the person was liable to the penalties.

S.1077EDefines

Qualifying disclosure Unprompted qualify disclosure

Category of penaltyDeliberately failsCarelessly but not deliberatelyOther careless behaviour

tax or duty underpaid is greater than 15% of the correct tax or duty payable for the relevant period.

Specific penalties forVATCATStamp Duty

Qualifying disclosureComplete informationAll matters occasioning a penaltyMade in writing

Unprompted Qualifying Disclosure Voluntary furnishedBefore investigation started andBefore person is notified by Revenue

Prompted Qualifying DisclosureReceived notification of Revenue investigationReport indiscretion before “investigation or inquiry

starts”

Category Base Penalty

Co-0p only Co –op & Co – op &

% of tax underpaid

Prompted qualifying dis

Unprompted qualifying dis

Deliberate 100% 75% 50% 10%

Careless with signif conseq.

40% 30% 20% 5%

Other Careless

20% 15% 10% 3%

Significant consequencesWhere tax underpaid is greater than 15% of

previously declaredFraud & Neglect changedNow –

DeliberateCareless

S. 99 and Schedule 6 provide for technical amendments

S.100 - Capital Services Redemption AccountS101 – “care and management’’ of taxes and

duties.