Finance Bill: New tax reliefs introduced to boost job creation
Published 08/02/2012 | 14:30
THE FINANCE Bill has been published by the Government and includes some new tax reliefs not included in the budget designed to boost job creation.
This involves 21 measures to support the international financial services industry where targets have been set to create 10,000 jobs over the next ten years.
For example, double taxation in the corporate treasury and aircraft leasing sector will be reduced.
There will also be further easing of the administration burden for non-resident investors in Irish funds.
The Finance Bill is published after the budget and gives effect to the tax measures introduced in it.
Announcing the Bill, Finance Minster Michael Noonan, said: “The Finance Bill is a further step towards economic recovery and regaining our fiscal autonomy.
“The Budget contained a number of targeted supports for employment for both the foreign direct investment and SME sectors and the bill provides additional details of the support for financial services flagged in December.”
It includes additional reliefs for those who purchased their homes in 2008 but did not start paying their mortgages until 2009.
The increased mortgage interest relief at the rate of 30pc will apply to them as well as those who bought homes between 2004 and 2008 as well as 2012.
It also confirms the increase in the exemption threshold for the Universal Service Charge from €4,004 to €10,036.
But the lion’s share of the bill is designed to boost job figures through foreign direct investment in a range of reliefs called the Special Assignee Relief Programme (SARP).
The research and development tax credit has been modified to allow companies award individuals involved in that sector.
For example, the first €100,000 of qualifying R&D expenditure will benefit from the 25pc tax credit which will continue to apply only to incremental or additional spend above that figure as compared with the base year of 2003.
There are also benefits designed to boost indigenous SME sector.
Companies that spend 60 days or more per annum developing business in so-called BRIC countries of Brazil, Russia, India and China, which are fast growing emerging markets, will receive a tax relief called the foreign earnings deduction.
The VAT rate on district heating has been reduced from 21pc to 13.5pc while the three year tax relief for start-ups is being extended to 2012, 2013 and 2014.
The bill also allows for a modification of the tax treatment of foreign-sourced dividend through an extension of the 12.5pc tax rate to dividends from non-treaty countries that have signed up to the OECD convention on tax matters.