The 2012 Finance Bill was published on 8th February, confirming the measures announced in the budget and adding a few more.  The Bill and Explanatory Memorandum are available on the department of Finance website here

 

The following highlights some of the measures included in the Bill.

 

Business Incentives – 

Key benefits for businesses include:

 

  • A new tax initiative to promote Irish sales efforts in high growth BRICS countries,
  • The introduction of a “Special Assignee Relief Programme” enabling companies to attract key people to Ireland and
  • Measures to allow companies reward key employees who have been involved in R&D and innovation.

 

Property Relief Measure –

a) a 5% USC surcharge on the use of property incentives

b) a restriction of property-based capital allowances, restricting carried-forward relief claimed by passive investors in accelerated capital allowances projects

 

Changes to Self-Assessment -

Chargeable persons will now be obliged to calculate the tax due/refundable as part of their return.  A Revenue Assessment will only issue where Revenue disagree with the calculation or a paper return is submitted by 31st August.  Tax payment deadlines remain unchanged.  These changes will apply for tax year 2013 onwards.

 

Third Level Fees –

The amount ineligible for tax relief has increased by €250 to €2,250 for full-time courses and by €125 to €1,125 for part-time courses.

 

Revenue Powers –

Revenue can now require a Statement of Affairs from a taxpayer who has unpaid tax liabilities.


Collector General is given the power to require a person in business to give the CG a security in relation to fiduciary taxes.  The CG can decide what is appropriate as a security in both amount and form. 

 

Stamp Duty –

A Self Assessment system will be introduced for Stamp Duty. 

 

Share Based Pay –

Following changes to the tax treatment of share based remuneration by employers, the Bill provides for employers to withhold or sell enough shares to meet any USC or PAYE liability they may have on the share awards.

 

CAT Deadline –

The Bill moves the CAT pay and file date back to 31 October.

 

Charities Update

 

The ICTR also announced a major breakthrough on donations for tax relief and discussions to resolve the VAT Compensation issue for charities.  The government has new proposals simplifying rules on tax relief for donations:

 

The government proposal involves:

  • a new composite rate of tax relief on charitable donations of ‘around 30%' to replace existing higher and standard rates.
  • a tax relief scheme on donations that will no longer be subject to the “higher earner” limitation on the amount of cumulative tax relief that can be claimed by individual taxpayers in any tax year. Instead the donations scheme will be capped at €1m.
  • the benefit of the tax relief in all cases now going to the charity (i.e. from now on PAYE and self-assessed taxpayers will be treated the same with charities benefiting from the tax refund in all cases).

 

The proposals are subject to a three-month consultation period, beginning immediately, during which charities and others may make comments and suggestions to fine-tune or improve the proposals. It is intended that the specific terms will be formally announced in next December’s Budget and become operative from January 2013.

 

Progress on VAT

The Minister for Finance has also signaled his attention to address the long-running issue of VAT Compensation for charities.

 

VAT costs a number of charities in excess of one million euro annually and the government has agreed that the issue must be addressed

 

ICTR expects that the process of discussing a solution will begin during 2012