This podcast was recorded on 29 June 2021.
David Moran, Tax Manager with Grant Thornton is joined by Úna Ryan, Tax Director with Grant Thornton.
David discusses the latest in tax developments. Úna shares her insights into the importance of planning for the future and ensuring you tax affairs are considered as you enter the golden years.
Changes to the Local Property Tax regime
The Minister for Finance, Paschal Donohoe TD has published the Heads of the Finance (Local Property Tax) (Amendment) Bill 2021 following approval from Government at the Cabinet meeting in early June. The Bill will give effect to a package of measures in line with the Programme for Government to address the future of the Local Property Tax.
Under the new regime, residential properties will be required to be valued on 1 November 2021 with a subsequent valuation required every 4 years.
The new rules will retrospectively value any residential property built between valuation dates as if it existed at the previous valuation date. New properties brought into the remit of LPT will be valued at the prior valuation date, i.e. 1 November 2021, which Revenue will provide assistance with to help determine the appropriate value.
The rates and bands have also been amended to reflect the higher value of residential properties in the last few years.
The department of finance estimates that there will be a yield of €580 million to the exchequer following the implementation of the new regime.
International tax developments
In a historic move, Finance Ministers of the G7 countries came to an agreement on the introduction of a new international minimum tax rate of 15% for multinationals and online tech companies at their meeting in London on 5 June, which is a move away from the 21% rate suggested by US President, Joe Biden earlier this year.
It was also agreed that at least 20% of profits above a 10% margin may be allocated to market jurisdictions where certain multinationals generate revenue.
Minister for Finance Paschal Donohoe has noted that Ireland could lose up to one fifth of its corporate tax revenue take which could be as a high as €2 billion per annum.
The global minimum tax rate is derived from Pillar 2 of the OECD BEPS Project, which aims to tackle the perceived tax challenges arising from Digitalisation.
Announcement of a membership of the new Commission on Taxation and Welfare
Minister for Finance, Paschal Donohoe TD announced on Thursday 3 June the members of the newly established Commission on Taxation and Welfare, which includes stakeholders from various public and private organisations. Professor Niamh Moloney who is Head of the Department of Law at the London School of Economics and Political Science will chair the new Commission.
The Commission were due to hold their first meeting on 4 June 2021 with the Commission due to submits its report to the Minister for Finance no later than 1 July 2022.
Further Covid Supports announced for businesses as they re-open
Minister for Finance, Paschal Donohoe TD has announced on 1 June 2021 a set of measures to provide support to businesses as they re-open and resume normal trading, including:
The Government has agreed to the drafting of legislation to provide for the above measures.
Úna Ryan, Tax Director, discusses the importance of planning for the future as well as the key tax consideration on passing your business to the next generation or getting ready to sell your business.