BUDGET 2010
TAXATION
THERE WERE NO CHANGES TO TAX RATES AND CREDITS
The main elements, including associated costs, of the personal tax package, which take effect from 1 January 2010, are as follows:
Income Tax
| |
Standard Rate Bands from 1 January 2010:
| | | |
| Current
| Proposed
|
Single
| €36,400
| €36,400
|
Married One Income
| €45,400
| €45,400
|
Married Two Incomes
| €72,800
| €72,800
|
*With a maximum transferability between spouses of €45,400 in 2010
| | |
Income Levy
| |
No change; as 2009
| |
| |
OTHER INCOME TAX
Restriction of Reliefs or Horizontal Measure
The restriction of reliefs measure is being amended for 2010 and subsequent tax years in order to achieve an effective rate of income tax of 30% for those subject to the full restriction. The entry level threshold for the restriction will now occur at adjusted income levels of €125,000 and the full restriction will apply at €400,000.
Mortgage Interest Relief
Qualifying loans taken out before 1 July 2011 will continue to get relief for 7 years. Transitional measures will be provided for qualifying loans taken out between 1 July 2011 and end 2012.
Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until end 2017.
Abolition of the relief entirely by end 2017.
Capital Allowances
Extension of the existing capital allowances scheme for energy efficient equipment purchased by companies from seven categories of eligible equipment to ten.
Corporation Tax
Extension of the existing scheme providing a three year exemption from tax on the income and gains of new start-up companies to include companies who commence trading in 2010. This measure will cost approximately €15m over a three year period.
Relief from Income Levy for certain Farm expenditure
Relief from the income levy will be allowed in respect of certain expenditure incurred by farmers to comply with the requirements of the EU Nitrates Directive 91/676/EEC. This measure will cost approximately €6m over a three year period and will cost €1.8m in 2010.
Vehicle Registration Tax (VRT)
The following package of measures will be introduced:
• Car Scrappage Scheme
• Extension of VRT exemption for Electric Vehicles
• Extension of VRT relief scheme for Plug-in Hybrid Electric Vehicles
A car scrappage scheme is being introduced with effect from 1 January 2010, to run until 31 December 2010. VRT relief of up to €1,500 will be provided where a car of 10 years or older is scrapped in accordance with certain criteria and a new car of emissions bands A or B (i.e. with CO2 emissions of 140g/km or less) is purchased. Further details on the scrappage scheme are set out at Annex F which is available on www.budget.gov.ie.
The existing VRT exemption for series production electric vehicles and the VRT relief of up to €2,500 for series production plug-in hybrid electric vehicles (both of which are due to expire on 31 December 2010) are being extended for two years until 31 December 2012.
<h4>Carbon Tax</h4>
A carbon tax at a rate of €15 per tonne is being introduced on fossil fuels. The tax will apply to petrol and auto-diesel with effect from midnight, 9 December 2009; and from 1 May 2010 to Kerosene, Marked Gas Oil, Liquid Petroleum Gas (LPG), Fuel Oil and Natural Gas. The application of the tax to coal and commercial peat is subject to a Commencement Order. Exemption from the tax will apply only to participants in the EU Emissions Trading Scheme (ETS) in respect of fuels so covered. Further information on the carbon tax is set out at Annex E which is available on www.budget.gov.ie.
VAT
Decrease in standard VAT rate from 21.5% per cent to 21 per cent.
The standard rate of VAT will be decreased from 21.5 to 21 per cent with effect from 1 January 2010. This increase will apply to all goods and services which are currently subject to VAT at 21.5 per cent.
Decrease in Excise on Alcohol
Excise Duty is being reduced on Beer and Cider by 12 cent (VAT inclusive) per pint, on Spirits by 14 cent (VAT inclusive) per half glass, and on Wine by 60 cent (VAT inclusive) per 75cl bottle. These reductions will take effect from midnight on 9 December 2009.
