Revenue Note for Guidance
This section contains the main charging provisions of income levy. It also sets out in detail income tax exemptions that are rescinded for the purposes of income levy and the exemptions that apply.
(1) Subsection (1) contains the main charging provision describing the “income levy” as a “tax”. The Schedule to the section details the income which is subject to the levy.
(1)(a) Paragraph (a) of the Table to subsection (1) defines “relevant emoluments” as all income within the charge to Schedule E but excluding-
(1)(b) Paragraph (b) of the Table to subsection (1) defines “relevant income” as all other income other than that dealt with by paragraph (a), and similarly excluding social welfare pension and similar type payments made by other Departments or other states or territories, and also income which has been gifted to the Minister for Finance under section 483. This confirms that income levy applies to all income before deduction of losses, capital allowances or any other deduction from, or deduction allowed in computing total income. The legislation makes some specific inclusions which would otherwise be outside the tax net.
(1)(b)(i) Subparagraph (i) disregards the exemptions which would normally apply in relation to exempt income under-
to bring all this income within the charge to the levy.
(1)(b)(ii) Subparagraph (ii) disregards some specific allowable deductions, namely-
(1)(b)(iii) Subparagraph (iii) excludes from the levy financial products that are subject to the increased DIRT regime.
(1)(b)(iv) Subparagraph (iv) provides for a deduction from income levy in respect of maintenance payments made under section 1025 to a separated spouse, provided there has been no claim for joint assessment under section 1026.
(1)(b)(iva) Subparagraph (iva) provides for any reduction arising as regards the application of section 825A for certain income earned outside the State.
(1)(b)(ivb) Subparagraph (ivb) provides for a deduction from income levy in respect of capital allowances arising under section 659 in respect of capital expenditure which farmers were obliged to make in relation to satisfying the Nitrates Directive (Council Directive 91/676/EEC of 12 December 1991).
(2) Subsection (2) provides for-
(3) Subsection (3) provides that where someone has utilised a proportion of the original exemption in the period up to 30 April 2009, then in applying the new lower limit to the income for the year of assessment 2009, any underpayment of levy arising in the period to 30 April 2009 as a result of that higher exemption for that short period will be disregarded.
(4)(a) Subsection (4) paragraph (a) provides for a specific “ring-fencing” provision to ensure that where redundancy payments made in the period from 1 January 2009 to 30 April 2009 were subjected to the levy that they specifically will not be subjected to the composite annual rate of income levy.
(4)(b)(i) Paragraph (b) provides that the levy charge at the rates in force at date of payment which fall between 1 January 2009 and 30 April 2009 will be the final amount of levy that will be due in respect of such redundancy payments. These rates are-
(I) 1 per cent on the first €100,100 of such emoluments,
(II) 2 per cent on the next €150,020 of such emoluments, and
(III) 3 per cent on the remainder of such emoluments.
(4)(b)(ii) Such emoluments which form part of an ex-gratia payment made in the period 1 January 2009 to 30 April 2009 shall not be reckoned in computing relevant emoluments for 2009 for any other purpose of this Part.
(4)(c) Paragraph (c) allows for an individual to elect in writing that the provisions of subsection (4) shall not apply. If there is no election then the subsection will automatically apply.
Relevant Date: Finance Act 2021