TaxSource Total

Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

The report of key tax developments are displayed per year, per month, by Ireland, the UK or International and by report title

At a glance: Budget 2021

Minister Donohoe and Minster McGrath delivered the biggest spending budget in the history of the State. Budget 2021 is framed with the expectation of a no-deal Brexit, as well as the assumption of the continued presence of COVID-19 in Ireland next year, with no vaccine available.

Income Tax

  • Increase in the Earned Income Credit of €150 to €1,650. This measure applies from the 2020 tax year onwards
  • Increase in the Dependent Relative Credit from €70 to €245
  • The ceiling of the 2 percent USC rate band will increase from €20,484 to €20,687
  • From 1 January 2021 the weekly income threshold for the Employer PRSI higher rate of 11.05 percent will increase from €395 to €398
  • Confirmation that broadband costs can be included in a remote worker’s claim for tax relief directly from Revenue

Corporation Tax

  • Continued commitment to 12.5 percent rate
  • Ireland’s Corporate Tax Roadmap to be updated, which will consider the latest OECD BEPS Inclusive framework
  • Amendment to Section 291A TCA 1997 bringing the disposal of certain intangible assets within the scope of capital allowances balancing charge rules
  • Tax credit for digital gaming sector – work to commence in 2021
  • Knowledge Development Box extended two years to 31 December 2022
  • Film tax credit relief – Regional Uplift Scheme extended to 31 December 2023
  • Accelerated capital allowances for investment in energy-efficient equipment to be extended for three years to 31 December 2023

COVID-19 Measures

COVID Restrictions Support Scheme (CRSS)

  • A new, Revenue administered, cashflow support scheme providing weekly payments to qualifying businesses when Level 3 or higher public health restrictions are in place

Tax Debt Warehousing

  • Extended to include self-employed individuals in financial difficulty, allowing payment deferral of the balance of any income tax payable for 2019 and preliminary income tax for 2020 for up to one-year interest free, and at a rate of 3 percent thereafter, and
  • Extended to include TWSS subsidy repayments owed by the employer

Employment wage supports

  • Further wage subsidy supports to follow the EWSS beyond 31 March 2021. Announcements on the next scheme will be provided when the economic conditions are clearer

VAT

  • Reduction in the rate of VAT for the tourism and hospitality sector from 13.5 percent to 9 percent, effective from 1 November 2020 to 31 December 2021

Commercial rates

  • Extension of commercial rate waiver to continue upto December 2020

Carbon Tax

  • Carbon tax on auto fuels increased by €7.50 per tonne/CO2 on 14 October and from 1 May 2021 for other fuels
  • The Finance Bill will include a schedule setting out annual increases which will bring carbon taxes to €100 per tonne/CO2 by 2030
  • Pilot Environmental Programmes in Agriculture to support farmers in lowering their carbon footprint, improving biodiversity, and protecting air and water quality
  • Largest ever budget for energy efficiency and retrofitting programmes

VRT, Motor Tax, and Excise duty

  • The methodology for calculating VRT and annual motor tax to be amended in 2021 for alignment with international standards and to ensure vehicles with higher levels of CO2 emissions are taxed appropriately
  • Excise duty on a packet of 20 cigarettes increased by 50 cents (including VAT) on 14 October with a pro-rata increase on other tobacco products

Housing

  • The Help to Buy Scheme, as enhanced through the July Stimulus Package, has been extended to the end of 2021
  • A new national Affordable Purchase Shared Equity Scheme for first time buys and a new funding model to deliver affordable houses by approved housing bodies
  • Residential development stamp duty refund scheme extended by one year for operations commenced by 31 December 2022, and the time allowed between commencement and completion of a qualifying project in order to be eligible for the refund also extended by six months to two-and-a-half years

Brexit

  • New funding of approx. €340 million available to get Ireland Brexit ready, which will be allocated as the need arises
  • In preparation of some specific Brexit measures announced, €100 million is earmarked for the Revenue Commissioners, Department of Enterprise Trade and Employment and the Department of Agriculture

  • A €3.4 billion Recovery Fund has been established to address the dual challenges of Brexit and COVID-19
  • The European Council agreed to establish a €5 billion Brexit Adjustment Reserve

Agri-sector

  • Stamp duty consanguinity relief on farmland extended for three years to 31 December 2023
  • Farm Consolidation relief extended to 31 December 2022
  • VAT: Farmers Flat-Rate Addition will increase from 5.4 percent to 5.6 percent from 1 January 2021