Mazars Budget 2012 Report

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We expected a budget of tax increases and we got it. Read Mazars Budget report here.

The 2% VAT hike represents the main extra tax move and this will hit retailers hard. Increases in CAT and CGT rates were always on the cards and Minister Noonan did not disappoint, raising them to 30% from 25%. While delivering on the Programme for Government’s commitment not to increase income tax, a new household charge of €100 will be introduced and this will broaden the tax base in line with EU and IMF requirements. Proposals to remove the current relief of 50% of employer PRSI for pension contributions and an increase in DIRT from 27% to 30% are targeted to yield substantial extra taxes. Excise duties did not escape either, with 25 cents being added to a packet of 20 cigarettes, carbon tax increasing by €5 to €20 a tonne on fossil fuels, betting duty being extended to remote betting along with a betting intermediaries’ duty, and motor taxes increasing from January 2012. So if you don’t drive, smoke or bet, these particular measures won’t get you!

There is some good news. The Finance Bill will introduce measures aimed at promoting international trade in the form of reliefs to attract key people to Ireland and to aid companies seeking to expand into the BRICS countries. It will also contain measures to support the international funds industry, the corporate treasury sector, the international insurance industry and the aircraft leasing industry. Changes to the R&D tax credit regime should help indigenous industry and we await with interest the proposed measure whereby companies will be able to reward key employees with part of the R&D tax credit.

In an effort to restore some confidence in the construction and property sectors, stamp duty on commercial property will be reduced from 6% to 2%. Additionally, there will be no capital gains tax on property bought after 6 December and which is held for seven years.
Changes to the business and farm reliefs will be introduced to encourage early transfers to the next generation.

I hope you find our Budget analysis both interesting and informative.