Saturday, 12 November 2016

Irish finance bill 2016 presented

The Finance Bill 2016, presented by the Irish government on 20 October, contained few surprises and largely represented the measures announced by the Minister for Finance in the budget that was presented on 11 October 2016, in addition to some measures that would affect the financial services sector. The finance bill passed through its second stage on 26 October 2016 and is expected to pass through the third and fourth stages by 15 and 23 November, respectively. Once passed by both houses of parliament, the bill is expected to be signed into law by 3 January 2017. Many of the measures included in the finance bill would be effective as from 1 January 2017.

Measures announced in the budget that were provided for in the finance bill include the following:

  • A capital gains tax relief scheme for entrepreneurs, which would provide for a tax rate of 10% (reduced from 20%) on gains of up to EUR 1 million arising from disposals of qualifying businesses after 1 January 2017;
  • Changes in the foreign earnings deduction and special assignee relief program;
  • A reduction of the lower universal social charge (USC) rates of 1%, 3% and 5.5% by 0.5%, respectively, following the stated intention by the Minister for Finance to phase out the USC; and
  • A provision that offshore tax defaulters no longer would be able to use the qualifying disclosure regime after 1 May 2017; interestingly, this would cover not only jurisdictions commonly regarded as offshore, but any country outside Ireland, so EU countries would be included for this purpose. 

Source & more info: Deloitte