1 / 56

Supplementary Budget 2009

Supplementary Budget 2009. Tax Planning in the Current Environment. What a difference 6 months can make…. Leadership & Vision …. The Rumours…. Income levy increase Income tax rates increase X

baris
Download Presentation

Supplementary Budget 2009

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Supplementary Budget 2009 Tax Planning in the Current Environment

  2. What a difference 6 months can make…

  3. Leadership & Vision …

  4. The Rumours… • Income levy increase • Income tax rates increase X • New high tax rate X • Reduce tax credits X • Pension changes X • Increase in the rate of CGT / CAT • Residential property tax X • Reduce VAT rates X • Employee PRSI cap increased • Employers PRSI rate reduced X • Excise duty increase

  5. Dublin Chamber of Commerce Budget Submission • Retain Corporate rate at 12.5% • No increase in Employers PRSI • Reduce 13.5% VAT rate to 10% X • Reduce excise on alcohol X • Introduce residential property tax X • Introduce wealth tax X

  6. Objectives 6 Steps to Economic Revival • Stabilise public finances • Restore damaged banking system • Regain lost competitiveness • Protect jobs and retrain unemployed • Stimulate economic confidence • Restore reputation internationally

  7. Fairness is Cornerstone Principle: Everyone must give according to means

  8. Personal Tax

  9. Rates No change

  10. Income Levy • Rates doubled • Entry points reduced

  11. Income Levy Yesterdays Budget €0 - €75,036 2% €75,037 - €174,980 4% €174,980 + 6% Effective 1 May 2009? Current Position €0 to €100,100 1% €100,100 - €250,120 2% €250,120 + 3% Effective 1 Jan 2009 Husband and wife separately assessed

  12. Income Levy • Not due if: • Income < €15,028 pa • Entitled to medical card • If over 65 and income < €20k pa • On gross income before capital allowances, losses, pension contributions • On “exempt” income such as patent, forestry, artists exemption • Trading and rental income net of expenses • Deposit interest exempt

  13. Income Levy Example John, single € Self employed net profit 90,000 Less: Pension AVC (15,000) Less: Capital allowances (18,000) Taxable Income 57,000 Annual impact of levy: €75,036 @ 2% = €1,501 €14,964 @ 4% = €599 €90,000 €2,100 Pre Budget €900

  14. Preliminary Tax Impact Preliminary Tax 2009 due on lower of : 90% of tax for 2009 Or 100% of 2008 tax plus income levy on 2008 income € John’s 2008 tax liability 13,896 Plus income levy 2,100 Revised 2008 liability for PT purposes 15,996

  15. Employee PRSI & Health Levy Employees PRSI - Employees PRSI Ceiling (4%) from €52,000 to €75,036 Health Levy Current Position €0 to €100,100 2% €100,100 + 2.5% Yesterdays Budget €0 - €75,036 4% €75,036 + 5% Effective 1 May 2009

  16. New Marginal Tax Rate On income over €175,000 Top rate of income tax 41% Income levy 6% Health levy 5% 52%

  17. What does this mean for Employees?

  18. Mortgage Interest Relief • Ceases for loans over 7 years

  19. Residential Rental Property • Tax deduction for interest reduced to 75% • Potential effect - 13% additional tax

  20. DIRT • Increase to 25% on ordinary deposit accounts • Increase to 28% on other savings products (life assurance / investment funds • Effective 8 April 2009

  21. Pensions • Clear signal – changes to tax free lump sum in 2010 Budget • Public service early retirement scheme • No standard rating of pension contributions

  22. Childcare Benefits • Early childcare supplement • 50% from 1 May 2009 • Abolished from 31/12/2009 • Free pre-school year • Child benefit allowance will be reviewed in 2010 Budget

  23. Capital Allowances • Termination of allowances on private hospitals and nursing homes • Transitional arrangements • Child care and palliative care facilities – relief still available

  24. Business Taxation Ireland Inc

  25. Business Taxation • 12.5% corporation tax rate unchanged Reminder: • “Manufacturing” tax rate of 10% ceases on 31 December 2010 • Employer PRSI unchanged at: • 8.5% on salary ≤ €18,512 pa • 10.75% on higher salaries

  26. Incentive to Protect Employment • Enterprise stabilisation fund • €100 m fund = €50m 2009: €50m 2010 • Assist indigenous companies in difficult business environment • Particular focus SME and exports • Not in financial difficulty at 1 July ’08 • Remain financially viable

  27. “Smart Economy” • Measures to support “Smart Economy” through investment and incentives • R & D target of 2.5% of GNP by 2013 • Tax relief on acquiring intangible assets including intellectual property

  28. Capital Gains Tax

  29. Capital Gains Tax (CGT) Current Position • 22% since 15 October ‘08 Yesterdays Budget • Increase to 25% • Effective 8 April ‘09

  30. Capital Acquisitions Tax • Rate increased from 22% to 25% • Effective from midnight 7 April • Thresholds Pre 8 April 8 April • (Parent to Child) €542,544 €434,000 • (Relations) €54,254 €43,400 • (Strangers) €27,127 €21,700

  31. Property

  32. Dealing in Residential Development Land • Special 20% rate abolished • Taxable at marginal rate for individual - 2009 • Taxable at 25% for company - accounting periods from 1 January 2009 • Trading losses set off restricted – maximum value 20% • If not claimed by 7 April ‘09

  33. Stamp Duty • “Trade-In” Scheme • No stamp duty payable on “traded in” property • As payment / part payment • In exchange for new house / apartment • Stamp duty due when “swapped” house sold

  34. Property - Commercial Current Position • Stamp Duty rate still 6% • Stamp duty deferral for “resting on contract” still available

  35. VAT & Other

  36. VAT Rates No changes

  37. Car Dealers • VAT Margin Scheme • Second Hand Cars Acquired from 1st July • VAT on Margin • Second Hand Cars Acquired before 1st July • Taxed on resale price • Spread Payments if resold before 31st December

  38. Excise • 25 cent increase on cigarettes • 5 cent increase on diesel

  39. Future Tax Cuts to be Reviewed • Taxation of child benefit • Introduce carbon tax • Introduce property tax • Review tax exempt income / reliefs

  40. Other Possibilities • Tax mobile phone texts! • Rock concerts! • Electronic tag high worth tax exiles!

  41. Supplementary Budget 2009

  42. Tax Planning in the Current Environment

  43. Current Environment • Tax certainty rates / reliefs • Next budget – due Dec ’09 • Commission on Taxation Report • Fundamental changes to tax regime • Maximise available remaining tax reliefs • Secure tax savings • Improve cashflow

  44. Losses • Losses arising in your company? • Land write downs / restricted • Capital allowances claims – obsolete assets • Stock provisions • Bad debt provisions • Inter group loans – write off / down • General trading losses • Can be carried back to prior year • Obtain a refund of tax paid • Prepare accounts and return early to get refund

  45. Cashflow Saving Tax Tips • Preliminary tax • If profits decreasing – base on current year • VAT refund on bad debts • Move to a cash receipts basis for VAT • Review direct debits for PAYE / VAT • Less frequent filing of VAT / PAYE • Directors current account

  46. Tax Opportunities for Companies • Research & Development tax credits • Qualifying R & D • 25% cash refund • What costs qualify? • What is R & D? • Sectors benefiting: • Software, pharma, food, plastics, medical devices, electronics, biotech, manufacturing etc

  47. Tax Based Funding • 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 €150,000pa for individuals • Qualifying company can secure €2m • Lack of other tax incentives for individuals

  48. Redundancy Planning • Some elements taxable, others not • Maximise after tax payments to staff

  49. Tax Savings for New Start Ups • Taxation exemption for new companies • Commence new trades in ’09 • Profits of €960k over 3 years • Existing companies?

More Related