A number of amendments to Finance Bill 2021 were approved by the Government for inclusion at Committee Stage of the Bill. These amendments are primarily required to correct drafting and typographical errors in the Bill. The Minister for Finance also decided not to proceed with section 62 of the Bill in order to give greater consideration to the proposal to value the free use of money by reference to the best price a borrower could obtain for capital acquisitions tax purposes.
Technical amendments are also tabled to ensure that the legislation operates as intended for the Employment Investment Incentive Scheme, the interest limitation rule in line with obligations under the EU ATADs, Anti-Reverse-Hybrid rules transposed from the EU ATAD and the Digital Gaming Tax Credit. The text of these amendments is expected to be available shortly.
The Committee Stage debates for Finance Bill 2021 are scheduled to commence tomorrow and run until 18 November. Report Stage is scheduled for 30 November and 1 December.
A press release issued by the Department of Finance includes details on the amendments below:
Income tax
An amendment is proposed to include a commencement provision to clarify that the USC changes announced in the Budget will apply for the 2022 year of assessment and subsequent years of assessment.
Capital acquisitions tax
It is proposed to introduce a new section to clarify the treatment of non-cash prizes for capital acquisitions tax (CAT) to remove an anomaly between the treatment of non-cash prizes from raffles and draws in legislation and in practice. This is to ensure that CAT does not arise on non-cash prizes won in raffles and draws, provided such raffles and draws are conducted in a bona fide manner.
Capital gains tax
It is proposed to introduce a new section to clarify the treatment of the disposal of property through raffles or draws for the purposes of capital gains tax (CGT). This amendment is said not to change the position that CGT does not apply to non-cash prizes from raffles and draws. Rather to ensure that, where a principal primary residence (PPR) is disposed of through a raffle or draw, the PPR CGT relief is limited to gains made up to the market value of the property. Any gain over and above the market value of the property would be subject to CGT.
Indirect taxes
This proposed amendment provides the legal basis for the waiver of excise duty on Special Exemption Orders granted to holders of on-licences fees, which is being applied by Revenue on an administrative basis at present.
Miscellaneous
Section 75 of the Bill as initiated inserts a new section 1086A into the Taxes Consolidation Act 1997 to provide a new regime for publication of the list of tax defaulters. A Committee Stage amendment to section 75 is proposed to ensure that a qualifying disclosure of an excise matter will be treated the same as qualifying disclosures under other taxes.
Residential zoned land tax
A number of minor technical amendments are being made to ensure that the cross-referencing throughout the legislation is correct, and references to other bodies of legislation for the purposes of the definitions contained in section 653A are accurate.
A new forfeiture provision is being introduced to cater for a situation where the owner of a site within the scope of residential zoned land tax cannot be identified and the tax and interest due and payable exceeds 110 percent of the market value of the site.
A number of changes are to be made to the maps section of the legislation. These include greater clarity regarding commercial businesses which can be excluded from the scope of the tax when they are integral to a residential community and a one month cut-off point prior to the publication of draft and supplemental maps which will provide Local Authorities with sufficient time to prepare maps.
There is also an amendment in relation to the mixed sites provision which provides for the cessation of the tax where a commercial development commences. In order to avoid abuse of this provision, there has to be a significant level of activity. This amending provision is designed to facilitate a situation where there is little activity at the outset, and therefore the tax continues to be paid, but subsequently significant work commences, so the site in question is no longer subject to the tax.
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