The Finance Bill giving effect to the Government’s Jobs Initiative has been published, giving detail on how the job creation measures will be achieved.
“The central objective of this Finance Bill and the Jobs Initiative is to assist in the creation of jobs. The Bill will achieve this objective through fostering confidence that will stimulate economic growth across the domestic sectors and especially the tourism sector,” said Minister for Finance Michael Noonan.
The tourism sector was pinpointed for various incentives in the Jobs Initiative and the Finance Bill gives more details on how these will be achieved.
As indicated, the €3 per passenger air travel tax is to be abolished, and the Finance Bill empowers the Minister for Finance to pick a date after which the tax will no longer apply. However, it does not include details on when that date will be.
The Bill also provides for a second reduced VAT rate of 9 per cent, mainly aimed at the tourism sector, which will apply from July 1st 2011 to December 31st, 2013.
It will apply to a range of goods and services including restaurant and catering services; hotel and holiday accommodation; admissions to cinemas, theatres, certain musical performances, museums and art gallery exhibitions; and fairgrounds or amusement park services.
On the 0.6 per cent levy which will apply to the market value of pension assets, it will apply for four years and will be payable twice yearly at the rate of 0.3 per cent. The levy will apply to occupational pension schemes, retirement annuity contracts and Personal Retirement Savings Accounts (PRSAs).
The value of the assets subject to the levy will be based on the market value on May 19th for 2011, and on January 1st for 2012, 2013 and 2014, or on the last date of the previous 12 month accounting period.
The research and development (R&D) tax credit regime is also getting a boost, as the Bill provides for an enhancement of the legislation, by giving flexibility to companies in how they account for the credit.
An amendment to the Taxes Consolidation Act, 1997, as proposed in the Bill, will give companies the option of accounting for it either on an above or below the line basis.
