Budget 2017 Highlights

INCOME TAX

• There were no changes to the Income Tax rates.

• The exemption limits, tax credits and standard rate bands applicable for the tax year 2017 are set out in detail under the Personal Tax Facts section.

• A number of changes have been made to the rates and bands for USC which are set out in detail under the Personal Tax Facts section.

• Medical card holders and individuals aged 70 years and over whose aggregate net income is less than €60,000 will pay a maximum USC rate of 2.5 %.

EARNED INCOME CREDIT

• The Minister has increased by €400 the Earned Income Credit to €950 which is available to taxpayers earning self-employed, trading or professional income and for business owners/managers who are ineligible for a PAYE credit on their salary income.

 INTEREST RELIEF – LANDLORDS

• The interest deductibility available for qualifying interest payments on monies borrowed to purchase, improve, repair residential rented property is being increased from 75% to 80%. This measure will apply to both new and existing mortgages. It is the Minister’s intention to increase this by 5% per annum until the full 100% deductibility is restored.

CORPORATION TAX RATE

• The Minister reiterated in his Budget speech that the 12.5% Corporation Tax rate will remain in place.

VAT

• The 9% VAT rate on tourism related activities is retained

 HIGH EARNERS RESTRICTION

• The Minister in his speech did not extend the exclusion from the High Earners Restriction for investments in the Employment Investment Incentive Scheme. The exclusion is due to cease on 31 December 2016.

 START YOUR OWN BUSINESS RELIEF

• The Start Your Own Business relief has been extended for a further 2 years until the end of 2018.

FARMERS FLAT RATE

• The farmers flat rate addition will be increased from 5.2% to 5.4% with effect from 1 January 2017.

FARMERS RESTRUCTING RELIEF

• The farmers restructuring relief has been extended to 31 December 2019. The terms of the relief are unchanged.

 CAPITAL GAINS TAX

• No change to the standard rate of 33% was announced in the Budget speech.

ENTREPRENEUR RELIEF

• The reduced rate of 20% Capital Gains Tax is being further reduced to 10%. This will apply to disposals in whole or part of a business up to an overall limit of €1 million.

 CAPITAL ACQUISITIONS TAX

• No change to the rate of Capital Acquisitions Tax was announced in the Budget speech.

• The current group A tax free threshold which applies primarily to gifts and inheritances from parents to their children is being increased from €280,000 to €310,000.
• The group B and C thresholds are being increased. The revised thresholds are set out in the table;

EXCISE DUTIES

• The excise duty on a packet of 20 cigarettes is increasing by 50c. with a pro rata increase on other tobacco products. This will come into effect from midnight on 11 October 2016.

• There were no other excise changes to the old reliables, e.g. alcohol, diesel, petrol, motor tax etc.

VEHICLE REGISTRATION TAX

• VRT reliefs available on the purchase of hybrid electric vehicles and plug-in hybrid electric vehicles are being extended to 31 December 2018.

• VRT reliefs on electric vehicles and electric motorcycles are being extended to 31 December 2021.

UNIVERSAL SOCIAL CHARGE – EMPLOYEES & SELF EMPLOYED