Minister Michael Noonan announced the 2016 Budget provisions today. Some of the headline tax changes in Budget 2016 are as follows;
The introduction of an Earned Income Tax Credit to the value of €550 for those with earned income & no access to the PAYE credit, e.g. income from Schedule D I, II & III and business owner/managers not eligible for the PAYE tax credit.
Universal Social Charge
Entry threshold to USC moves from €12,012 to €13,000
1.50% rate cut to 1.00%
3.50% rate cut to 3.00%
7.00% rate cut to 5.50%
The introduction of a tapered PRSI credit with a maximum level of €12 per week or €624 annualised
Entry point to the top rate of 10.75% is being increased by €20 per week to €376 per week.
The minimum wage is to increase by 50c to €9.15 as recommended by the Low Pay Commission
Annual Pension Levy
The annual pension levy is being abolished.
Capital Gains Tax
Reduced rate of 20% for disposal, in part or in whole, of a business up to an overall limit if €1M in chargeable gains.
Capital Acquisitions Tax
The Group A tax-free threshold, which broadly applies to transfers between parents and their children is being increased from €225,000 to €280,000.
Home Carer Tax Credit
There will an increase of €190 in the Home Carer Tax Credit to bring it up to €1.000.
Increase in home carer’s income threshold from €5,080 to €7,200.
Free childcare to be made available for children from age three to 5 1/2, or the beginning of primary school
Child benefit increases from €135 to €140 per month
Family income supplement is being increased by €5 per week for families with one child and by €10 for those with two or more children
Two weeks paternity leave on the way for fathers.
3 Year relief for Start-Up Companies
This is being extended for new start-ups commencing to trade over the next 3 years.
Film Tax Credit
Increase in the cap on eligible expenditure to €70M.
Research & Development
There are plans for a Knowledge Development Box incentive for conducting research & development in Ireland. Income that qualifies for the KDC will be subject to a reduced rate of corporation tax of 6.25%.
Financial Institutions Levy
This is being extended to 2021.
Local Property Tax
It is proposed to postpone the revaluation date for LPT from 2016 to 2019.
NAMA to deliver 20,000 residential units before the end of 2020.
Commercial motor tax rates are to be simplified, the 20 existing rates to be replaced by 5 new rates ranging from €92 to €900. The maximum rate had been €5,195.
Abolish current €2.50/€5 p.a. chare on ATM cards & combined (ATM & Debit) cards from 1st January 2016 & introduce a new12c ATM withdrawal fee capped at €2.50/€5 p.a.
Employment & Investment Incentive
Scheme being amended to include expansion works on existing nursing homes.
Home Renovation Scheme
Extended to 31 December 2016.
The ‘old Reliable’s’
A pack of 20 cigarettes is to rise by 50c
Petrol and diesel – no change
Alcohol – no change
Full budget details are available at www.budget.gov.ie
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