Overview - Finance Bill 2013
by Padraig Cronin, Head of Tax & Legal Services
T: +353 1 417 2417
Finance Bill 2013 was published on 13 February against a different economic background than when the Budget for the year was announced in December, 2012.
Ireland has been able to conclude a deal on the debt incurred to bail out the banks and thus reducing the annual costs of financing this debt. The Euro has strengthened against both the US Dollar and Sterling indicating that the international community is satisfied for now with the way that the Euro governance is being reformed. Also the Irish and the International economies are beginning to show some green shoots with unemployment beginning to stabilise.
However, Irish business both domestic and even some international business are continuing to suffer. While we see that the banks have met their recent lending targets, it is still not easy to obtain the required finance for business.
Time will tell if the steps being taken by the Government including the measures in this Finance Bill are sufficient for the consumer to start spending to return Irish enterprises to growth. In our view, efforts have been made to assist the Irish entrepreneur but a lot more needs to be done. The recent focus on tax planning by multinationals poses challenges for continued growth in the FDI area. Real substance in Ireland is key in this regard.
The Finance Bill legislates for the provisions in the December 2012 Budget. Already the Local Property Tax has been enacted in a separate piece of legislation. The more significant measures from the Budget being now being implemented are:
- The introduction of the legislation for Real Estate Investment Trusts (REITs),
- The incentivisation of the aviation maintenance sector,
- The increase in the CGT and CAT rates, and
- The increase in excise duties.
The Finance Bill also legislates for:
- A reduction of the period giving rise to the claw back of IP allowances,
- Improvement of the R&D credit available to certain employees,
- The withdrawal of the Foreign Service Relief for ex gratia payments,
- Individuals to be taxed where certain loans are written off,
- Extension and improvement of the start-up relief, and
- Implementation of Stamp Duty anti avoidance measures for resting on contract arrangements.
Should you wish to discuss how the Finance Bill will affect you, please contact us.