Hit enter to search or ESC to close
Institue of Directors - design shape Institue of Directors - design shape

Budget 2017 Announced

News

Budget 2017 was announced by Minister for Finance, Michael Noonan, and Minister for Public Expenditure and Reform, Paschal Donohoe, on 11th October 2016.  The budget package of €1.3bn of tax cuts and increased spending includes:

  • The Universal Social Charge is being cut for lower and middle income earners.  The three lowest rates are being reduced by 0.5% and will now stand at 0.5%, 2.5% and 5%. 
  • The Earned Income Tax Credit will be increased from €550 to €950 for those who do not have access to a PAYE credit e.g. self-employed and farmers.
  • Social Welfare: Home Carers will receive a €100 increase in tax credits to €1,100.  The State Pension will increase by €5 from next March.  All weekly social welfare payments (carer’s and disability allowances and job seekers’ benefit and allowance) will rise by €5 per week, also from March.  The 2016 Christmas Bonus for social welfare recipients will be increased to 85%.
  • DIRT will be reduced by 2% for each of the next four years from 41% to 33% in 2020.
  • Housing:  A 5% rebate is being introduced on income taxes paid by First-time Buyers of a newly built home, capped at €20,000.  The Rent-A-Room scheme ceiling will also be increased by €2,000 to €14,000.
  • Capital Acquisitions Tax on all inheritances will be reduced, especially from parents to children where the threshold for CAT will rise by €30,000 to €310,000.
  • Foreign Earnings Deduction is being extended until the end of 2020. The minimum number of days for travel is being reduced to 30 days per annum, from 40.
  • A Debt to GDP ratio of 45% is being targeted by the mid-2020s.  A Rainy Day Fund is to be introduced from 2019, entailing a saving of €1 billion per year.
  • A reduction in the Capital Gains Tax to 10% will apply to the disposal in whole or in part of a business up to an overall limit of €1 million on chargeable gains.
  • The Special Assignee Relief Programme (SARP) is being extended for a further 3 years until the end of 2020.
  • The Start Your Own Business tax relief is being extended for a further two years until the end of 2018.
  • Retention of the 9% VAT rate for tourism.
  • Programme of targeted compliance interventions against those engaged in offshore tax evasion.
  • Relief on VRT on electric vehicles to be extended for a period of five years and two years for hybrid vehicles.
  • The sole tax increase is the 50c increase in excise duty on a packet of cigarettes.

For further reading, below is a summary of the main changes included in Budget 2017, prepared by a number of professional services firms:

Grant Thornton

Mazars

William Fry

Deloitte

PwC

Davy