41% higher tax rate remains.

PRSI

The 4% PRSI rate will apply to all taxpayers.

As previously announced, from 1 January 2014, unearned income such as rental income, investment income, dividends and deposit interest will be subject to PRSI for all taxpayers.

Universal Social Charge (USC)

A 10% rate applies to self-employed income over €100,000.

Tax relief for medical insurance

From 16 October 2013, the tax relief on medical insurance premiums will be restricted to the first €1,000 per adult insured and €500 per child.

One parent family tax credit

From 1 January 2014, the one parent family tax credit will be replaced with a single person child carer tax credit. The new credit will be equal in value to the one parent family tax credit but can only be claimed by the primary carer of the child.

DIRT & exit taxes

41% on interest payments whether payments are made annually or more frequently.

Home Renovation Incentive (HRI)

This incentive will apply to expenditure by an individual on the renovation or improvement of their principal private residence. Individuals who avail of the scheme will be able to write off 13.5% of the cost of the renovation work. The relief will be granted by way of a tax credit split over two years commencing in the year following the year of the expenditure. There is a minimum threshold spend of €5,000 and a maximum threshold of €30,000 over two years. The contractor carrying out the work must be tax compliant.

Tax reliefs on loans to acquire an interest in a partnership

From 15 October 2013, tax relief for acquiring an interest in a partnership will be abolished. The relief will be phased out over 4 years for existing claimants until 1 January 2017.

High earner restriction

Capital allowances and losses on plant and machinery used in manufacturing trades which are claimed by passive investors will be included as a specified relief for the purpose of the high earner restriction.

Top slicing relief

From 1 January 2014, top slicing relief will no longer be available in respect of all ex-gratia termination payments.

Maternity benefit

From the 1 January 2014 the rate of maternity benefit will be standardised at €230 per week for all new claimants.

Pension fund levy

The 0.6% stamp duty levy on pension fund assets is to increase to 0.75% for 2014.  The levy will then be reduced to 0.15% for 2015.

Changes to the standard fund threshold (SFT) regime

With effect from January 2014, tax relief will only be available on pension contributions up to the level that provides an annual income of up to €60,000. As such with effect from 1 January 2014 there will be a further reduction in the Standard Fund Threshold from €2.3 million to €2 million. 

The current single valuation factor of 20 used to value Defined Benefit pension entitlements will be replaced by a range of higher factors which will vary with the age at which the pension is drawn down.  The aim of this measure is to improve the equity of the Standard Fund Threshold regime as between the Defined Benefit and the Defined Contributions pension arrangements and between those who retire at an early age and those who retire at a later age.

Where an individual's pension rights exceed the new lower SFT on 1 January 2014, they can protect those rights by formally applying for a Personal Fund Threshold (PFT) of up to €2.3m (unless the individual already has an existing PFT).

Corporation tax rate

No change to the 12.5% corporation tax rate.

Start Your Own Business (SYOB)

Individuals who have been unemployed for a period of at least 15 months prior to starting their own unincorporated business will be exempt from income tax for two years. The maximum exemption from income tax is €40,000 per annum.

Employment and Investment Incentive

The Employment and Investment Incentive will not be included as a specified relief for the purpose of the high earner restriction for three years.

Film relief

Last year the Minister announced a change in the operation of the Film Relief scheme by changing from a tax deduction for individual investors to a tax credit for film companies.  This change is being accelerated from 1 January 2016 to 1 January 2015.

To make Ireland more attractive for major film productions expenditure on non-EU talent will now qualify. The Minister also announced the introduction of a withholding tax. EU approval and a commencement order will be required to implement these changes. 

Changes to R&D tax credit

A review of the R&D tax credit scheme was completed and this has resulted in some positive changes.

In 2013 the first €300,000 of qualifying R&D expenditure will qualify for the 25% R&D tax credit on a volume basis.  Credit will continue to apply to incremental expenditure in excess of €300,000 compared to such expenditure in the base year 2003.

The limit on the amount of expenditure outsourced to third parties that qualifies for relief is increased from 10% to 15% of total spend.

Changes to the key employee relief whereby some of the credit can be used to reduce the key employee’s tax bill will be introduced to make the relief more attractive.

Living City Initiative

This is being extended to cover residential properties built before 1915 and will apply to properties in Dublin, Cork, Limerick, Galway, Waterford and Kilkenny.

Irish registered non-tax resident companies

The Minister announced that he intends to implement changes in the Finance Bill to ensure that an Irish registered company will have to be tax resident in Ireland or another country and can no longer be “stateless”.

The cash receipts basis threshold will increase from €1.25M to €2M with effect from 1 May 2014.

The reduced VAT rate of 9% for goods & services mainly related to the tourism and hospitality industry will remain for 2014.

The unregistered farmer’s flat rate addition will be increased from 4.8% to 5% with effect from 1 January 2014.

The budget contains a number of Revenue measures to combat VAT fraud including a proposal that businesses which have not paid for supplies, in full or part, within a six month period will be required to repay the VAT claimed on those supplies. In addition, the Budget proposes to allow Revenue to apply an emergency reverse-charge measure to address sudden VAT fraud.

Entrepreneurial relief

A new CGT incentive is being introduced, subject to EU State Aid approval.  It will apply where an individual makes an investment in the period 1 January 2014 to 31 December 2018 in assets to be used in a new productive trading activity and disposes of this investment three years after the date of investment.  The relief will be granted by way of a tax credit which will be equal to the lower of the CGT paid by the individual on a prior disposal in the period from 1 January 2010 and 50% of the CGT due in relation to the gain arising on the disposal of the new investment. 

Property purchase incentive

The CGT property purchase incentive that was introduced in Finance Act 2012 is being extended to 31 December 2014.  Properties purchased in this extended period that are held for a minimum of 7 years will not be subject to CGT on any gains if disposed of at that point.  Where disposals are made after 7 years proportionate relief will apply.

CGT retirement relief

CGT retirement relief for farmers is being extended to disposals of long-term leased farmland.  Conditions for the relief to apply include a minimum lease period of 5 years and that the subsequent disposal of the farmland is not to a child.

Property Tax

In 2014 property tax for the full year is due on 1 January 2014 for payments by cheque and on 21 March 2014 for online payments.