BUDGET 2013

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The budget for 2013 was announced by Michael Noonan

 The key points are:

CAPITAL TAXES

  •  Capital Gains Tax and Capital Aquisitions Tax increased to 33%
  • The thresholds for these taxes has been reduced by 10%

DIRT TAX

  • DIRT tax has been increased to 33%

INCOME TAX

  • Tax bands and Tax credits remain unchanged
  • Maternity Benefit will be taxable from 1st July 2013
  • Reduced rate of USC for those over seventy and for medical card holders with an income in excess of €60,000 will be discontinued from the 1st of January 2013 and the standard rates of USC will apply.
  • The minimum level of annual contribution from the self-employed from €253 to €500 and abolishing the weekly allowance for employees.
  • Where modified PRSI rate payers (Public sector employments on Class B,C,D and H) have income from a trade or profession, such income and any unearned income they have will be made subject to PRSI with effect from the 1st of January 2013.
  • Unearned income for everyone else will become subject to PRSI in 2014. This means that PRSI will be payable on income generated from wealth such as rental income, investment income, dividends and interest on deposits and savings.

VAT

  • The annual Vat cash receipts basis threshold for small and medium enterprises is being increased from €1 million to €1.25 million with effect from 1 May 2013.
  • The reduced rate of 9% applicable to the tourism sector will continue for 2013.

PROPERTY TAX

  • The local property tax will be introduced from 1st July 2013 for the second half of the year.
  • It will be collected by the Revenue.
  • The owners of the property will be responsible for the payment of the tax
  • The rate of the tax will be 0.18 per cent of market value up to €1 million and 0.25 per cent on values above that level.
  • The Household Charge will cease with effect from the 1st of January 2013 and the NPPR Charge or “second homes charge” will cease with effect from the 1st of January 2014.
  • The Household Charge will cease with effect from 1 January 2013.
  • The Non Principal Private Residence Charge will cease from effect from 1 January 2013

FARMING

  • Stock relief has been extended for another three years to 2012
  • The young trained farmers relief extend for another three years
  • Relief from capital gains tax arising on disposals of farm land for farm restructuring purposes. This is a once-off relief which will apply in respect of transactions initiated in the period from the start of January 2013 to end-December 2015,
  • Farmers flat rate addition will be reduced from 5.2% to 4.8% with effect from 1 January 2013

SMALL BUSINESS SECTOR

  • Reforming the 3 Year Corporation Tax Relief for Start Up Companies to allow unused credits to be carried forward. This will help SMEs and start ups navigate their early years.
  • Increasing the cash receipts basis threshold for VAT from €1 million to €1.25 million and amending the Close Company Surcharge de minimis level. Both of these measures will improve cash flow.
  • Amending the R∓D tax credit by doubling the initial spend eligible for the credit from €100,000 to €200,000 to encourage innovation and business expansion.
  • Extending the Foreign Earnings Deduction for work related travel to certain countries beyond the BRICS, which will support exports