Indirect Tax
- The VAT rate applicable to the tourism and hospitality sectors will be returned to 13.5% from 1 Jan 2019, from the 9% rate which it has enjoyed from 2011.
- The 9% VAT rate is being retained for newspapers and sporting facilities. It will also now apply to electronic newspapers which are currently taxed at 23%.
- Excise duty: 50c increase on a packet of 20 cigarettes from midnight on 9 October 2018.
- VRT: extension of relief for hybrid vehicles until end of 2019.
- Introduction of 1% surcharge for diesel vehicles across all VRT bands with effect from 1 January 2019.
- Betting duty: increase from 1% to 2% with effect from 1 January 2019.
Corporation Tax
Minister Donohoe confirms Corporation Tax rate to remain, stating “Our longstanding 12.5% rate will not be changing”.
- EU Anti-Tax Avoidance Directive (ATAD) measures announced:
- introduction of Exit Tax at 12.5% on unrealised capital gains, where companies migrate tax residence or transfer assets offshore, leaving the scope of Irish tax; and
- Finance Bill 2018 to introduce a Controlled Foreign Company (CFC) regime.
- Three Year Start-Up Relief for companies extended until the end of 2021.
- Film Relief Tax Credit Scheme extended from 2020 to 2024, with proposed new
short-term 5% uplift for productions made in designated areas. - Improvement of Accelerated Capital Allowances scheme for employer-provided fitness/childcare facilities.
- Introduction of Accelerated Capital Allowances for gas-propelled vehicles and refuelling equipment.
Income Tax
- The Minister widened the standard rate income tax bands and increased the Earned Income and Home Carer tax credits. The Minister also made changes to the Universal Social Charge (USC).
- 20% rate band increased by €750 to €35,300 (single) and €1,500 (married, both working) to €70,600.
- Earned Income Credit increased by €200 to €1,350.
- Home Carer Credit increased by €300 to €1,500.
- The impact on net take home pay is €289 per annum (€489 if self-employed) for a single person and €578 per annum for married persons (€978 if both self-employed).
- Key Employee Engagement Programme (KEEP): Share based remuneration qualifying for capital gains tax treatment under KEEP Scheme increased to 100% of salary. Lifetime cap introduced.
Property & Capital Taxes
Minimal changes were announced in this area:
- The Group A CAT threshold, which applies to gifts/inheritances from parents to children will increase from €310,000 to €320,000.
- Restoration of 100% interest relief for landlords on loans used to fund the acquisition, improvement or repair of residential properties with effect from 1 Jan 2019 rather than 1 Jan 2021.
- No change announced to lifetime limit for Capital Gains Tax (CGT) Entrepreneur Relief
- No change to stamp duty rates on property
- Young trained farmer stamp duty relief extended for further three years
Brexit & Other measures
- €110m allocated for Brexit measures across a number of departments.
- Launch of €300m Future Growth Loan Scheme to support the SME and agriculture & food sector.
- Work to commence on regulation of crowdfunding activities, to include a review of withholding tax obligations for peer-to-peer lending.
- Following independent recommendations, additional staffing resources and funding are being made available to the Tax Appeals Commission for improved IT systems and to speed up the tax appeals process.
- A Rainy Day Fund of €1.5 billion will be established. It will be capitalised with €1.5 billion from the Ireland Strategic Investment Fund and supplemented with an annual contribution of €500 million from the Exchequer starting from 2019.
