Irish Taxation Institute: Educating, Developing and Representing

Businesses:

1. No change to the 12.5% corporation tax rate.
2. Intangibles: Introduction of Intangibles Regime, where businesses will get relief for the acquisition of intangible property (including Intellectual Property).  Details to be announced in the Finance Bill.
3. Insurance premiums: The rate of tax applying to non-life premiums to increase to 3% (from 2%) and a new rate of 1% introduced to apply to life assurance premiums.
4. VAT: Change in how car dealers account for VAT on 2nd hand cars from July

Individuals:

1. Excises:
   1. Cigarettes: Extra 20C per pack of 20
   2. Diesel: Extra 5c per litre
2. PRSI: The ceiling is increased to €75,036 per annum (from €50,700).
3. Levies.  Both the health and income levies will increase with the new annual rates and bands being:

4. DIRT: The rate of tax applying to interest on ordinary deposit accounts increased to 25% or 28% for certain special savings accounts (from 23% and 26%).
5. Capital tax rates: The rates of capital gains tax and capital acquisitions tax are increased to 25% (from 22% in the last budget).
6. Capital acquisition tax thresholds: Decreased by 20%
7. Mortgage interest relief: only available for the first seven years, with effect from 1 May 2009
8. Pensions: Will wait for the Commission on Taxation’s report
9. Child benefits: Will be taxed or means tested in 2010

Property related:

1. Residential development land: The special tax rate for dealing in residential development land to be abolished.  All profits to be taxed at 25% for companies or an individual’s marginal income tax rate.  The use of losses will be restricted.
2. Interest relief: Restricted to 75% for rented residential properties
3. Tax incentives: Incentives relating to the health care to be abolished, save those relating to palliative care and child care.  More tax incentives will be removed next year.
4. Stamp duty: Trade in scheme to be introduced with effect from publication of the Finance Bill.