This legislation, introduced last week to give effect to the proposed public sector pension levy, will make amendments to the Taxes Consolidation Act. Tax relief for payments is to be granted by way of that rarest of reliefs, a Schedule E expense.
The Financial Emergency Measures in the Public Interest Bill 2009 reads more like a piece of European rather than Irish legislation, with its lengthy preamble setting out the reasons for its existence - that the country is in serious financial trouble, that the Exchequer spend has to be controlled, that the private sector is suffering and that the public sector must share the suffering in the context of the value of public sector pensions.
In Tax eNews, our focus has to be on any tax measures it contains, and these are in s15 of the Bill as initiated. S15 inserts a new section 790C to TCA97. This provides that any deduction made on a public servant under the Act will be treated as a Schedule E expense incurred in the year in which the deduction is made. There are consequential amendments to permit the PAYE regulations to recognise the deduction.
Though a "pension levy", this is something of a misnomer in tax terms. By granting the tax relief in this way, the relief will not be subject to the many restrictions which apply to pensions relief generally. Nor should it have any impact on any other tax reliefs, entitlements or for that matter the other relief restrictions which also apply.