Budget 2022 was announced on Tuesday 12th October 2021. Below you will find a summary of the changes which are due to take place next year.
Income Tax and USC Rates:
- The Employment Wage Subsidy Scheme (EWSS) has been extended to 30th April 2022.
- The payment levels will begin to be reduced from December 2021.
- The scheme will be closed to new applicants from 1st January 2022.
Warehousing of Tax Liabilities:
- The Tax Debt Warehousing Scheme is expanded.
- This allows self-assessed income taxpayers with employment income who have a material interest in their employer company to warehouse income tax liabilities relating to their Schedule E income from that employer company.
- Remote workers can claim tax relief on 30% of vouched heating and electricity expenses for the days they are working from home.
- This is an increase from the current limit of 10%.
- The temporary concession for broadband expenses, whereby 30% of the cost can be claimed back, has been made permanent.
Employment Investment Incentive Scheme:
- The Employment Investment Incentive (EII) Scheme is extended for three years to December 2024.
- The scheme is a tax incentive allowing an individual investor to obtain income tax relief of up to 40% on investments for shares in certain companies.
- The EII scheme is being opened up to a wider range of investment funds.
- The rule that 30% of an investment in an EII company must be spent before relief can be claimed is removed.
- The ‘capital window’ rules are being relaxed to allow greater capacity for investors to redeem their capital without penalty.
Help to Buy Incentive:
- The Help to Buy Incentive is a scheme for first-time buyers.
- The scheme has been extended to December 2022.
- The scheme offers first-time buyers a tax rebate of up to €30,000 or 10% of the purchase price of the property.
Zoned Land Tax:
- A new self-assessed zoned land tax, will be introduced to encourage the use of land for building homes.
- The tax will apply to land that is zoned as suitable for residential development and is serviced but has not been developed for housing.
- The tax will be 3% of the market value of the land.
- There will be a number of exclusions from the tax, which is due to commence in 2024.
Pre-letting Expenses for Landlords:
- The relief for certain pre-letting expenses of landlords on vacant residential premises will be extended until the end of 2024.
- A new tax credit for the digital gaming sector is introduced.
- This means a refundable corporation tax credit for expenditure incurred on the design, production and testing of a digital game.
- The relief will be available at a rate of 32% on eligible expenditure up to a maximum of €25 million per project.
- There will also be a per-project minimum spend requirement of €100,000.
- The relief for certain start-up companies from corporation tax is extended until December 2026.
- There has been an amendment to the Accelerated Capital Allowance Scheme for energy-efficient equipment.
- Equipment directly operated by fossil fuels now longer qualifies for the scheme.
- The Accelerated Capital Allowance Scheme for gas vehicles and refueling equipment has been extended to December 2024.
- This scheme has been amended to include hydrogen-powered vehicles and refueling equipment.
International Corporation Tax Reform:
- The Irish Government has signed up to OECD proposals for a global minimum effective corporation tax rate of 15% for multinationals with global revenues in excess of €75 million.
- Ireland has negotiated an effective minimum rate set at 15%.
- Ireland has also secured the agreement that the 12.5% rate will continue to apply to companies below the €750 million threshold.
- The new rules are expected to be implemented as early as 2023.
- The reduced VAT rate of 9% for the hospitality sector will remain in place until 31 August 2022.
Commercial Rates Waiver:
- The commercial rates waiver will continue until 31st December 2021.
- The waiver of commercial rates was originally introduced as a COVID-19 emergency support measure in March 2020.
- The waiver applies to the hospitality, arts and tourism-related sectors.
- The rate of carbon tax on fuels will increase again this year by €7.50 per tonne/CO2.
- Carbon tax will rise by the same amount in every Budget until 2029.
- This will further increase the cost of petrol, diesel, and home-heating fuels.
Income from Micro-generation of Electricity:
- A tax disregard of €200 is being introduced for personal income received by households that sell any residual electricity they generate back to the grid.
Vehicle Registration Tax and Electric Vehicles:
- Budget 2022 Vehicle Registration Tax rates to further encourage the transition to lower-emission fuels.
- A revised VRT table will be introduced from January.
- The 20-band table will remain.
- There will be a:
- 1% increase for vehicles that fall between bands 9-12.
- 2% increase for bands 13-15.
- 4% increase for bands 16-20.
- The €5,00 relief from VRT battery electric vehicles (BEVs) is extended to the end of 2023.
- The BIK exemption where an employer makes a BEV (both new and used) available to employees has been extended until 2025.
Agri Tax Measures:
- The Young Trained Farmer Stamp Duty Relief is extended to December 2022.
- This measure provides relief from stamp duty on the conveyance of farmland to eligible young-trained farmers.
- Stock relief is extended for a further 3 years to December 2024.
- Enhanced Stock Relief for young, trained farmers and for registered farm partnerships is also extended for 1 year to December 2022.
- The Farmers Flat Rate Addition is decreased from 5.6% to 5.5%.
- The flat-rate scheme compensates unregistered farmers for VAT incurred on their farming inputs.
- The bank levy, is being extended for one further year to December 2022.