Finance Bill 2016 Published
The Government has today published the Finance Bill 2016. A commitment to publishing the Finance Bill as soon as possible after Budget day has thus been fulfilled. This follows the early publication of the Tax Strategy Group Reports in July and is therefore a further tangible improvement made by the Government to the ongoing process of Budget reform.
- In addition, the Finance Bill 2016 is shorter than in previous years. It contains 57 sections, the majority of which implement the changes announced on Budget Day together with a limited number of additional anti-avoidance measures and technical changes which are deemed to be important for the effective care and maintenance of the tax system. Again, this new approach to the Finance Bill is in line with recommendations on Budget Reform agreed by the Oireachtas earlier this year.
- The Bill includes the Budget Day announcements such as measures to implement the reductions in the USC, the increases in the home carer tax credit and the earned income tax credit, as well as various measures to help housing supply, first time buyers and renters including the new Help to Buy Scheme. It also includes a number of initial measures as a first response to BREXIT, by extending the Foreign Earnings Deduction and Special Assignee Relief schemes until 2020, reducing the capital gains tax rate for entrepreneurs relief to 10%, allowing farmers to ‘step out’ of income averaging in a year of poor income, and introducing a fishers tax credit. It also provides for the Budget Day announcement of the increase in the excise duty on cigarettes by 50 cent.
- The Help to Buy Scheme as announced on Budget day limited the scheme to persons who had mortgages with a minimum 80% Loan to Value ratio. The Central Bank of Ireland have indicated to the Department of Finance that a sizable number of First Time Buyers take out a mortgage with a loan to value ratio of less than 80%. We have therefore decided to amend the scheme so that First Time Buyers do not feel compelled to borrow larger amounts in order to qualify. We have set a minimum loan to value ratio for the scheme at 70% in the Finance Bill today.
- The Bill provides for amendments to the tax treatment of Section 110 companies and introduces a new regime for the taxation of Irish Real Estate Funds.
- Certain anti-avoidance measures are also included and the Bill provides for the tackling of off-shore tax evasion, updates procedures for dealing with tax defaulters and provides for minor amendments to our provisions on country by country reporting by large multi-national companies in order to bring them fully in line with an EU Directive agreed earlier this year.
Commenting on the publication of the Finance Bill today, Mr Michael Noonan, TD, Minister for Finance stated that:
“I welcome today’s publication of the Finance Bill 2016. The Bill has been finalised and published quickly after the Budget and focuses on implementing the main tax changes announced on Budget Day. This is in line with the recommended process of budgetary reform. As always, I am looking forward to a stimulating and engaging debate with my parliamentary colleagues in relation to the provisions contained in the Bill.”
20 October 2016
Further information from:
David Byrne - Press Officer - email@example.com - 086 026 7978