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
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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.
