Tax incentives aimed at luring senior multinational executives to Ireland and increased mortgage relief for struggling homeowners are among the provisions included in the Finance Bill, which was published today.
Many of the measures were announced by Minister for Finance Michael Noonan in Budget 2012 in December.
Among the provisions is an increase to 30 per cent in mortgage interest relief for first-time buyers who took out their mortgage between 2004 and 2008.
The Bill also makes provision for the Budget announcement that mortgage interest relief will be available at 25 per cent for first-time buyers who purchase property this year and at 15 per cent for non-first-time buyers who purchase in 2012.
A Special Assignee Relief Programme (SARP) is included in the bill which will reduce the cost to employers of assigning skilled individuals from abroad to take up positions in an Irish-based operation.
An exemption from income tax on 30 per cent of a salary between €75,000 and €500,000 will be provided for employees assigned to a role in the State for a minimum of one year and a maximum of five years.
Also included is a Foreign Earnings Deduction (FED) to assist companies seeking to expand into emerging markets in Brazil, Russia, India, China and South Africa.
The maximum amount of income that can be deducted under the scheme will be €35,000 per annum. The deduction will end in the 2014 tax year.
The Finance Bill also makes provision for the Budget announcement to increase the exemption threshold for the Universal Social Charge from €4,004 to €10,036. This measure will remove approximately 330,000 people from liability for the Universal Social Charge.
The DIRT (Deposit Interest Retention Tax) rate has been increased by 3 percentage points to 30 per cent in the Bill and the rate for certain longer term savings products has also been increased by 3 percentage points to 33 per cent. The increased rate applies to interest paid or credited on or after January 1st, 2012.
Retirement relief is to be modified with an upper limit of €3 million on relief for business and farming assets disposed of within the family.
The annual imputed distribution which applies to the value of assets in an Approved Retirement Fund (ARF) each year is being increased from 5 per cent to 6 per cent in respect of ARFs with asset values in excess of €2 million.
The scheme, which provides relief from corporation tax on the trading income and certain gains of new start-up companies in the first 3 years of trading, is being extended to include start-up companies which commence a new trade the next three years.
The Finance Bill includes a number of changes to the R&D tax credit scheme, which were previously announced in Budget 2012. It also includes changes to a number of indirect taxes, including the standard rate of VAT which rose from 21 per cent to 23 per cent at the start of 2012 and carbon tax and excise duty on tobacco products.
"This Finance Bill is a further step towards economic recovery and regaining our fiscal autonomy. The achievement of these objectives will take time but we are making good progress in implementing our Programme for Government," said Mr Noonan.
"Economic circumstances mean we must target support where it is most needed. I am confident that the measures contained in this Finance Bill provide balanced, targeted and effective support to business to encourage job creation which will be the cornerstone of our economic recovery," he said.
The Bill will go through the Oireachtas in the coming weeks.
