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Irish Budget 2016

Ireland

Budget 2016 was announced on 13 October 2015. Many of the measures announced were leaked to the media well in advance and so there are few surprises. Taxand Ireland provides further details.

The government is very conscious that it will shortly (whether next month or in Spring 2016) be launching its re-election campaign so this Budget has a little something for everyone:

Knowledge development box

  • Announcement of OECD compliant and 'best-in-class' Knowledge Development Box with a corporation tax rate of 6.25% applying to profits generated by qualifying R&D activities

Corporate tax

  • The Minister reiterated Ireland's commitment to the OECD’s objectives in relation to base erosion and profit shifting with the announcement of the introduction of country by country reporting

Start-up exemption

  • The 3 year relief for start-up companies will be extended to new business start-ups in 2016

CGT entrepreneur relief

  • A reduced rate of CGT of 20% (as opposed to 33%) has been introduced for entrepreneurs and the self-employed

Employment and Investment Incentive Scheme (EII)

  • The amendments announced in last year’s Budget have received EU State Aid Approval and will take effect from 14 October 2015

Farm succession partnership

  • To facilitate the transfer of family farms, plans to introduce a family farm partnership model have been announced. The commencement of this measure is subject to EU State Aid approval

Earned income credit

  • An annual income tax credit of €550 has been introduced for self-employed individuals

Pension levy

  • The remaining pension fund levy of 0.15% will be abolished with effect from 1 January 2016

Discover more: Budget 2016 highlights


Your Taxand contact for further queries is:
Brian Duffy
T. +353 1 639 5157
E. brian.duffy@williamfry.ie

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Taxand's Take

The Budget covers a reduction in the rate of CGT from 33% to 20% for the self employed and entrepreneurs, an easing of the USC burden for the so called 'squeezed middle' and some details of Ireland’s Knowledge Development Box which is designed to increase Ireland’s attractiveness as a location for IP development and investment. 

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