At MANUS BRADY we have summarized the main points of Budget 2017 with a view to indicating some of the key elements that could impact your business.
Relevant to employers and business owners:
Commitment to 12.5% rate of corporation tax and a fair but competitive corporation tax regime.Entrepreneurial capital gains tax rate is being reduced from 20% to 10%. €1 million threshold to be reviewed in the future. No change to 33% capital gains tax rate.
Special Assignee Relief (income tax relief for individuals coming to work in Ireland from related companies) and Foreign Earnings Deduction (income tax exemption for time worked in specific countries) extended until 2020.
Reduction from 40 days to 30 days for Foreign Earnings Deduction making relief more relevant to business owners travelling abroad as now greater scope for income tax relief
Start Your Own Business Scheme extended for 2 years.
SME Share Based Incentive Scheme to be introduced in Budget 2018. State-aid discussions will be ongoing in the interim. Relevant for employers granting shares to employees.
Property specific
Rebate of income tax paid in previous 4 years up to 5% of purchase price/€400,000 for first time buyers. Pro-rata for prices between €400,000 and €600,000. No relief for purchases over €600,000. Second hand properties not included.
Home Renovation Incentive extended for another 2 years.
Interest for tax relief on rented residential properties to be restored to 100% over phased basis of 5% per annum. From 2017, increases from 75% to 80%.
Tax-free “rent a room” threshold increased to €14,000.
Living City Initiative expanded to include landlords.
Specific sectors
Publication in the Finance Bill on matters specific to the funds industry.
Offshore defaulters – specific procedures to be introduced including criminal proceedings.
The 9% rate of VAT is retained for the hospitality sector.
Consultation in relation to tax on sugar-sweetened drinks.
VRT relief extension for electric vehicles extended by 5 years and by 2 years for hybrid vehicles.
Carbon tax relief for solid fuels that have a biomass element as well as full relief on fuels for combined heat and power plants.
Accelerated capital allowances for energy efficient equipment extended to sole traders.
Right of farmers to step out of income averaging in a particularly poor year. Required due to current volatility in the sector.
5.4% new rate for flat rate farmer addition.
Extension of farm restructuring to 31 December 2019.
Tax rates and credits
0.5% reduction in each of the 3 lower USC rates i.e. 1% to 0.5%, 3% to 2.5%, 5.5% to 5%.
Small adjustment to the lower 2.5% band from €18,668 to 18,772.
DIRT reduction by 2% per annum for next 5 years.
Increase by €400 in self-employed credit to €950.
Threshold exemption for gifts/inheritances from parents to children (Class A) increased to €310,000. 8% increase in Class B and Class C thresholds.
Home carer’s credit increased by €100 to €1,100.