Corporation tax rate

As in previous years, there is a firm commitment given to retain the 12.5% corporation tax rate as a key part in Ireland strategy to attract foreign direct investment.

Three-year start-up relief

The relief provides for corporation tax relief for profit-making companies in their first three years of trading to create and maintain employment. It was due to expire at the end of 2018. However, Budget 2019 has extended it for a further three years until the end of 2021.

Employer’s PRSI

The Minister confirmed previously announced increases to the training levy, which means that employer’s PRSI will increase to 10.95% in 2019 and 11.05% in 2020.

Budget 2019 announces that with effect from 1 January 2019, the weekly income threshold for the higher rate of employer’s PRSI will increase from €376 to €386.

This measure has been introduced on recommendation from the Low Pay Commission to ensure that the increase in the hourly minimum wage to €9.80 does not lead to disincentives for workers, in particular those seeking to work full-time.

Accelerated capital allowances for employer-provided fitness and childcare facilities

Originally introduced in Finance Act 2017, this measure has been amended and will take effect from 1 January 2019 to incentivise employers to provide fitness and childcare facilities to their employees. The employer will benefit from an accelerated deduction for capital investment costs.

Accelerated capital allowances for gas-propelled vehicles and refuelling equipment

Budget 2019 provides for an acceleration of existing allowances where businesses opt for gas-propelled vehicles, which are seen as more environmentally friendly, in favour of diesel-fuelled vehicles.

The aim of this measure is to reduce the use of large diesel-fuelled vehicles such as HGVs and buses. The measure should result in a cost-neutral position for the owner over the lifespan of the vehicle.

Key Employee Engagement Programme (KEEP)

KEEP is an incentive to facilitate the use of share-based remuneration in a tax-efficient manner by unquoted SMEs in order to attract and retain key employees, whereby gains are liable to capital gains tax on disposal only as opposed to being subject to income tax, USC and PRSI.

Budget 2019 introduces three separate measures:

• increase the ceiling on maximum annual market value of shares that may be awarded to equal the amount of the salary (up from 50%);
• replacement of the three-year limit with a lifetime limit; and
• increase the quantum of share options that can be granted under the scheme from €250,000 to €300,000.

Crowd-funding regulations

To broaden the financing opportunities available to SMEs, the Minster has committed to introducing regulations to address peer-to-peer lending companies. He has also committed to reviewing withholding tax obligations of such lenders.

Film relief

The scheme provides for relief in the form of a corporation tax credit granted in respect of the cost of producing certain films. This was due to expire at the end of 2020, but has been extended in Budget 2019 until 2024.

The Budget also introduced a new short-term tapered regional uplift commencing at 5% for productions being made in certain designated regional areas. This is subject to State aid approval.