Budget 2010 October 2008 April 2009 December 2009.
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Transcript of Budget 2010 October 2008 April 2009 December 2009.
![Page 1: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/1.jpg)
![Page 2: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/2.jpg)
Budget 2010
![Page 3: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/3.jpg)
October 2008
![Page 4: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/4.jpg)
April 2009
![Page 5: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/5.jpg)
December 2009
![Page 6: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/6.jpg)
Budget Strategy
- Objective - Rebuild Nations Self Confidence- Restore International Reputation
- How- Bold – Decisive – Innovative Steps
- Conclusion - Worst is Over- Return to Growth in 6 – 9 Months
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€4 Billion Question ?
Social Welfare19%Day to Day
Expenditure 25%
Capital Investement
24%
Other Taxes 7%
Public Sector Pay25%
Public SectorPaySocialWelfareDay to DayExpenditure CapitalInvestement Other Taxes
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Signalled Changes
• Taxation of child benefit X
• Introduction of carbon tax • Introduction of property tax
2010
• Review taxation exempt income / reliefs • CAT/CGT Business Reliefs X
• Pension Contributions / Lump Sums ?
• Reduce VAT/Excise • Car Scrappage
![Page 9: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/9.jpg)
Personal Tax
![Page 10: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/10.jpg)
Income Tax Rates
• No Changes
• Reminder – Income Tax – PRSI– Health Levy– Income Levy
![Page 11: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/11.jpg)
Simplify and Reform Tax System
- Reform and Fairness
- Social Contribution
- Low Rate
- Broad Base
- Income Tax
- Progressive Rates
- 2011
![Page 12: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/12.jpg)
Employee
>€75k €75k-€175k €175k+
Income Tax 41 41 41
PRSI 4 - -
Health Levy 4 5 5
Income Levy 2 4 6
51% 50% 52%
IT, PRSI, Health Levy & Income Levy
![Page 13: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/13.jpg)
Self-Employed
>€75k €75k-€175k €175k+
IT 41 41 41
PRSI 3 3 3
Health Levy 4 5 5
Income Levy 2 4 6
50% 53% 55%
IT, PRSI, Health Levy & Income Levy
![Page 14: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/14.jpg)
International Comparisons: Overall marginal tax rates for
employees on €80,000
0%
10%
20%
30%
40%
50%
60%
Total
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Why No Tax Increase?
- Reached Limit of Taxation
- Heaviest Burden on Higher Earners - Income Levy : Gross - High Earners Cap
![Page 16: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/16.jpg)
High Earners Cap
- Introduced 2007
- Restricted Specified Reliefs
- Aim - Effective Rate 20%
![Page 17: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/17.jpg)
How It Worked 2009
- 20% Effective Rate- Restricted Relief to Higher of:
- €250,000OR
- 50% of Income
2010- Now 30% Effective Rate
- Entry Point €125,000- Full Restriction if Income > €400,000
- Finance Bill Clarification
![Page 18: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/18.jpg)
2009 2010
€’000 €;000
Income 600 600
Specified Reliefs 400 400
Allowed 300 150
Restricted 100 250
Taxable 300 450
Tax @ 41% 123 185
Effective Rate 2009 20% 30%
High Earners Cap - Example
![Page 19: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/19.jpg)
Tax Exiles
![Page 20: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/20.jpg)
New Irish Domicile Levy
- Non Resident Domiciled Individuals
- Worldwide Income > €1m
- Irish Located Capital > €5m
- Annual Levy €200,000
- Details in Finance Bill
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Mortgage Interest Relief
• Budget 2009– Relief to cease for loans over 7 years
• Interest Relief now until 2017– Home Owners in Negative Equity – New Loans before 1/7/2011 – Loans from 1/7/2011 to 31/12/2012
(Restricted)
![Page 22: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/22.jpg)
Residential Rental Property
• Reminder – current position
• Tax deduction for interest reduced to 75%
![Page 23: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/23.jpg)
Investments/Savings
• Existing 25%/28% Tax
• New National Savings Product – National Solidarity Bond– 5/7 Years – 2010– Details to be announced
![Page 24: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/24.jpg)
Pension
- Overhaul Imminent- No Immediate Change - Frame Work Policy to Review- Likely Outcome
- Max Tax Tree Lump Sum €200k- Excess Taxable?- SSIA Type Scheme- No Tax Relief
![Page 25: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/25.jpg)
Child Benefits
• Children’s Allowance – 10% cut to allowance– Future Taxation / Means Test ?
• Incentive in 2009– Preschool – Free Year– Effective 1/1/10
![Page 26: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/26.jpg)
Business Taxation
Ireland Inc
![Page 27: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/27.jpg)
Business Taxation• Corporation Tax
– 12.5% tax rate unchanged– International Brand
• Employers– Employers PRSI unchanged (8.5 – 10 ¾ %)– Employer Job Incentive Scheme– Details to be announced
![Page 28: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/28.jpg)
New Company Set Up
• Introduced 2009
• Profits < €320k per annum
• 3 Year Period
• Extended set up’s in 2010.
![Page 29: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/29.jpg)
Smart Economy• Irish Economic Focus• Research & Development tax
credits– Qualifying R & D – 25% cash refund
• Intellectual Property• Awaiting Innovation Taskforce
Report
![Page 30: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/30.jpg)
Support Motor Industry
• Car Scrappage Scheme– Car over 10 years old– €1,500 off VRT– Emissions band A or B
• Environmentally Friendly– Extension of VRT Relief to 2012
• VAT Margin Scheme
![Page 31: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/31.jpg)
Supporting Retail Sector
• VAT Rate
– Reduced from 21½% to 21% from 1/1/10
• Excise Reduction on Alcohol
![Page 32: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/32.jpg)
Supporting Agriculture
• Waste Management Capital Allowances – No Income Levy
• Forestry & Bio Energy
![Page 33: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/33.jpg)
Supporting Other Industries
• Construction– Retrofit
• Tourism – Railway Scheme
• Other – Energy Efficient – Extends to Catering/Hospitality
![Page 34: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/34.jpg)
Supporting Financial Services
• Incentives to develop International Funds Industry Hub
• Changes expected in Finance Bill
![Page 35: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/35.jpg)
Incentives to Protect Employment
• Training Fund
• Food Industry
• Employment Job Incentive Scheme
![Page 36: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/36.jpg)
Employment Subsidy Scheme
• Enterprise stabilisation fund– Assist Irish export companies in difficulty
• Second round now open– Eligibility extended Non Export– Minimum of 10 full time employees– Jobs at risk / Commit to retain jobs– Tight Deadline/ Immediate Application
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Getting Credit Flowing
• Review Committee NAMA – External Review Process
• Review Banking Policies– Particular Focus on Retail, Car, Tourism &
Agriculture
![Page 38: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/38.jpg)
New and Other Taxes
![Page 39: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/39.jpg)
Carbon Tax
• €15 per Tonne on Fossil Fuels
• Effective Midnight 9/12/2009– Petrol 3.5% Increase
– Diesel 4.6% Increase
• Effective 1/5/2010– Home Heating …. 8.7%
• Commencement Order – Coal & Briquettes
![Page 40: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/40.jpg)
Other Taxes
• Site Valuation Tax – Residential Property– Establishing Ownership Register– Valuation Database
• Water Charges – Based on Usage
![Page 41: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/41.jpg)
Capital Gains Tax (CGT)& Capital Acquisitions Tax (“CAT”)• No changes currently
• Rate 25%
• Finance Bill?
![Page 42: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/42.jpg)
Stamp Duty
• No changes currently
![Page 43: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/43.jpg)
Anti Avoidance
• Clearly Signalled
• Tax Avoidance Schemes
• Strengthening Revenue Power
![Page 44: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/44.jpg)
Conclusion
![Page 45: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/45.jpg)
Tax Planning in the
Current Environment
![Page 46: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/46.jpg)
Current Environment
• Existing Legislation
• Finance Bill / Finance Act
• Maximise available remaining tax reliefs– Secure tax savings– Improve cashflow
• Window of Opportunity
![Page 47: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/47.jpg)
Cashflow Saving Tax Tips
• Preliminary Tax – If profits decreasing – base on current year
• Move to a cash receipts basis for VAT
• Review direct debits for PAYE / VAT
• Directors loan v Salary
• Use of a Redundancy Rebate
![Page 48: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/48.jpg)
Losses
• Ability to Use Losses • Losses arising
– Land write downs / restricted– Capital allowances claims – obsolete assets– Stock / Bad Debt provisions– Inter group loans – write off / down
• Use – Carried back to prior year (company)– Offset against other Income (Personal)
![Page 49: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/49.jpg)
Tax Based Funding/Reliefs• Pensions • Seed Capital Relief
– Start ups – Tax relief on investments up to €600k – Set against Income Tax bill in prior 6 years– Refund of income tax
• Business Expansion Scheme– Tax relief of €150,000 pa for individuals– Qualifying company can secure €2m– Lack of other tax incentives for individuals
![Page 50: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/50.jpg)
Opportunities with Reduction in Asset Values
• Take assets out of company
• Re-organise company structure
• Transfer assets to children
![Page 51: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/51.jpg)
Opportunities for Family Businesses / Companies
• Low valuations – opportunity to transfer
• CAT threshold for children €434k
• Significant tax reliefs remain at present
• Retirement Relief: extract €1.5m cash tax free (if husband & wife qualify)
• Commission on Taxation Report
![Page 52: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/52.jpg)
Company Pension Schemes
• Significant pension fund contribution – Based on age, years of work and salary
• 25% tax free lump-sum
• Changes Signalled
![Page 53: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/53.jpg)
Conclusion
Economy
• Worst is Over?
Tax
• Watch this Space
![Page 54: Budget 2010 October 2008 April 2009 December 2009.](https://reader035.fdocuments.net/reader035/viewer/2022062518/56649de85503460f94ae2ead/html5/thumbnails/54.jpg)