Finance Bill 2021 was published on 21 October 2021. In addition to giving effect to measures announced in Budget 2022, the Bill also contains some new measures which are mainly of a technical nature and some anti-avoidance measures.
The Bill legislates for a number of welcome amendments to reliefs for businesses including the Employment Wage Subsidy Scheme (‘EWSS’), Employment Investment Incentive (‘EII’) scheme and the Start-Up Exemption with a view to supporting Irish businesses. A new Digital Gaming Tax Credit is also introduced.
In the context of the Housing Sector, there are important tax changes in respect the new Zoned Land Tax and the extension to the Help to Buy Scheme. There is also a new measure to bring non-resident corporate landlords within the scope of corporation tax (instead of income tax). This will increase the rate of tax on rental profits for those companies from 20% to 25%.
As part of Ireland’s commitment to the implementation of the EU Anti-Tax Avoidance Directive, the Bill legislates for the Interest Limitation and Anti-Hybrid Rules. Amendments have also been made in respect of Transfer Pricing.
The measures in respect of Climate matters remain largely aligned to those announced on Budget Day, with particular interest on the extension of the Benefit-in-Kind (‘BIK’) exemption for electric vehicles.
Other measures of note include the amendment of the Capital Acquisitions Tax (‘CAT’) provisions in respect of interest free loans, extending the Debt Warehousing Scheme to proprietary directors, welcome technical amendments on Pensions/ARF options, and finally some technical changes regarding Value Added Tax (‘VAT’).
We have summarised the key amendments below:
- Tax Reliefs for Businesses
- Housing Measures
- Transfer Pricing / Interest Limitation / Anti-Hybrid Rules
- Other Measures
In addition to these measures, the details regarding the overall Income Tax package, Farming Measures, Excise, and Carbon Taxes are enacted under the Bill as announced on Budget 2022, and a summary of these measures can be found here.
We hope you find our commentary on Finance Bill 2021 of interest and we will keep you updated on developments as the Finance Bill passes through the Dail.
To discuss in confidence what the measures mean for you or your business, please contact a member of our specialist tax team.