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Corporation Tax Pensions Contribution limit The annual earnings limit for determining maximum taxrelievable contributions for pension purposes is being set at €150,000 for 2009 as compared with the 2008 limit of €275,239.
OTHER CHANGES Charge on non-principal private residences A new charge applies to all non-principal private residences. It will be set at €200 per dwelling, and will come into effect in 2009. It will be payable by the owners of private rented accommodation, holiday homes and other non-principal residences but will not be applied to new dwellings not yet sold Change in basis of Benefit-in-Kind charge for company cars. The Finance Bill will contain provisions to change the basis of the BIK charge on company cars to relate it to the cars’ level of CO2 emissions. Levy on car parking facilities provided to employees A flat rate levy of €200 per annum will be charged on employees whose employer provides them with car parking facilities in an urban centre. Mortgage Interest Relief The current rate of mortgage interest relief is being increased from 1 January 2009 for first-time buyers from 20% to 25% in year 1 and year 2 and to 22.5% in years 3, 4 and 5. The additional relief will be available to new first-time buyers and first-time buyers who have bought a house in the last 4 years. The rate of mortgage interest relief for non-first-time buyers is being reduced from 20% to 15% from 1 January 2009. Health Expenses Relief Health Expenses relief will be granted at the standard rate only from 1 January 2009, with the exception of nursing home expenses which will be standard rated from 1 January 2010. Air Travel Tax An air travel tax applying to all departures from Irish airports will come into force on Monday 30 March 2009. The general rate applying will be €10 per passenger with a lower rate of €2 for journeys under 300 kms.
HLB
Nathans
www.hlbnathans.com Lavitts Quay, Cork Tel: 021 4275176 Fax: 021 4277305 email: accountancy@hlbnathans.com
The first instalment will be payable in the sixth month of the accounting period (e.g. 21 June for a company with a 31 December year end) and the amount payable will be 50% of corporation tax liability of the preceding accounting period or 45% of corporation tax liability for the current accounting period.
Ulysses House, Foley Street, Dublin 1 Tel: 01 8881004 Fax: 01 8881005 email: accountancy@hlbnathans.com
The second instalment will be payable in the eleventh month of the accounting period (e.g. 21 November for a company with a 31 December year end) and the amount payable must bring the total preliminary tax paid to 90% of corporation tax liability for the current accounting period. 3 year Tax exemption for Start-up Companies Companies which commence trading in 2009 will be exempt from tax, including capital gains, in each of the first three years to the extent that their tax liability in the year does not exceed €40,000.
Stamp Duty Stamp Duty on Commercial Property The current Stamp Duty applicable to non-residential property is being changed in respect of Instruments executed on or after 15 October 2008. The top rate of duty is being reduced from 9% to 6% and the new rates are: Aggregate Consideration Up to €10,000 €10,001 to €20,000 €20,001 to €30,000 €30,001 to €40,000 €40,001 to €70,000 €70,001 to €80,000 Over €80,000
Rate of Duty Exempt 1% 2% 3% 4% 5% 6%
Extension of Stamp Duty Relief for Young Trained Farmers This Stamp duty relief for young trained farmers is now being extended for 4 years to 31 December 2012.
OFFICES AT:
Mallow, Co. Cork. Tel/Fax: 022-22124
Skibbereen, Co. Cork. Tel/Fax: 028-21392 Tel: 027-70685
028 40248
Castletownbere, Co.Cork.
inspire design and print
Tax Credit scheme for Research and Development Expenditure The current 20% rate of tax credit for expenditure undertaken by a company on qualifying (R&D) is being increased to 25%. commencing on or after 1 January 2009.
Preliminary Tax payment arrangements for Corporation Tax The current single payment for large companies’ preliminary corporation tax (Companies with a corporation tax liability of more than €200,000 in their previous accounting period) will be split into two instalments. This will apply to accounting periods commencing on or after 14 October 2008.
BUDGET 2009
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TAX CREDITS / RELIEFS Single Credit Married Credit Widowed - Without dependent children - Qualifying for One Parent Family Credit
Home Carer’s Credit (max) Employee Tax Credit Incapacitated Child Credit (subject to income limit) Incapacitated Person (Employing Carer) * Fully Allowed at Marginal Rate One Parent Family Credit
2009 € 1,830 3,660 2,430 1,830 900 1,830 3,660
2008 € 1,830 3,660 2,430 1,830 900 1,830 3,660
50,000*
50,000*
1,830
1,830
325 650
325 650
400 800 800
400 800 800
800 1,600 1,600
800 1,600 1,600
At source
At source
Age Credit :Single Married
Rent Paid by Certain Tenants (Under 55): Single Married Widowed
Rent Paid by Certain Tenants (Over 55): Single Married Widowed
Medical Insurance Credit Mortgage Interest Relief First Time Buyers Single Married Widowed
Others Single Married Widowed
Dependant Relative Credit Blind Persons Credit: Single Both Spouses Blind
At source
At source
Maximum Interest 7 years 7 years 10,000 10,000 20,000 20,000 20,000 20,000 Maximum Interest 3,000 3,000 6,000 6,000 6,000 6,000
80 1,830 3,660
80 1,830 3,660
Widowed Parent Credit Year 1 Year 2 Year 3 Year 4 Year 5
4,000 3,500 3,000 2,500 2,000
4,000 3,500 3,000 2,500 2,000
3,810* 1,270*
3,810* 1,270*
Long Term Unemployed Year 1 Additional per each child Year 2 2/3 of above Year 3 1/3 of above * Fully Allowed at Marginal Rate
Benefit-In-Kind Preferential Loans – Home Loans - Other Loans
5.50% 15.00%
5.50% 13.00%
Income Levy
INCOME TAX RATES & BANDS Standard Rate Single Married One Income
2009 € 20% 36,400 45,400
2008 € 20% 35,400 44,400
Married Two Incomes One Parent/Widowed Parent
72,800 40,400
70,800 39,400
Balance Taxable at
41%
41%
The levy is paid on gross income, before deductions for capital allowances or contributions to pensions. The levy does not apply to social welfare payments including contributory and non-contributory social welfare pensions.
Deposit Interest Retention Tax
23%
20%
PRSI CHANGES
Professional Services Retention Tax Dividend Withholding Tax
20% 20%
20% 20%
65 Years and over
20,000
20,000
65 Years and over
40,000
40,000
40 %
40 %
From 1 Jan 2009
From 1 Jan 2008
8.50%
8.50%
10.75%
10.75%
352
352
AGE EXEMPTION LIMITS Single/Widowed
A new income levy is being introduced that will apply at the rate of 1% to gross income up to €100,100 per annum or €1,925 per week. A rate of 2% will apply to income in excess of that amount.
Employee PRSI annual ceiling From 1 January 2009, the PRSI contribution ceiling will increase from €50,700 to €52,000. TAX ON SAVINGS
Married
Marginal Relief
Deposit Interest Retention Tax The rate of retention tax that applies to deposit interest is being increased from 20% to 23%. The increased rates will apply to payments made on or after 1 January 2009.
Capital Gains Tax PRSI Employers PRSI No upper ceiling Earnings up to €356 p.w. Earnings in excess of €356 p.w.
st
st
The rate of capital gains tax is being increased to 22% from 20% in respect of disposals made from midnight on 14 October 2008. Payment Dates Disposal Date Between 01/1/2009 and 30/11/2009 Between 01/12/2009 and 31/12/2009
Payment Date 15/12//2009 31/10/2010
Employees PRSI
Capital Acquisitions Tax Weekly PRSI Exemption Limit
Rates & Bands
Earnings ceiling Rate (not incl. Health Contribution)
52,000 4.00%
50,700 4.00%
Self Employed PRSI All earnings Minimum contribution
3.00% 253
3.00% 253
Threshold Amount Balance
2008 Threshold Amounts Child Brother, Sister, Nephew, Niece Others
Nil 20% €521,208 €49,682 €24,841
Valued Added Tax
LEVIES Health Contribution Earnings Ceiling Rate Rate for earners whose income is in excess of €1,925 per week (€100,100 per annum)
€3,000
Small Gift Exemption
First €127 p.w. is disregarded for Class A contributors
€500 p.w 2.0% 2.5%
€500 p.w 2.0% 2.5%
Increase in standard VAT rate from 21 per cent to 21.5 per cent. The standard rate of VAT will be increased from 21 to 21.5 per cent with effect from 1 December 2008. This document is intended as a guide only and should not be relied upon as an accurate statement of Irish tax law. Professional advice should be sought in relation to your particular Irish tax circumstances.