Income tax
Tax credits
From 1 January 2008, tax credits are increased as follows:
Single person: €1,830 (was €1,760)
Married couple: €3,660 (was €3,520)
PAYE employee: €1,830 (was €1,760)
Widowe(r) (no dependent children): €2,430 (was €2,310)
One parent family: €1,830 (was €1,760)
Incapacitated child: €3,660 (was €3,000)
Blind (single person: €1,830 (€1,760)
(both spouses blind): €3,660 (€3,520)
Widowed parent (year after bereavement): €4,000 (was €3,750)
(2nd year after bereavement): 3,500 (was €3,250)
(3rd year after bereavement): 3,000 (was €2,750)
(4th year after bereavement): 2,500 (was €2,250)
(5th year after bereavement): 2,000 (was €1,750)
Aged 65 or over: Single/widowed: €325 (was €275)
Married: €650 (was €550)
Home carer: €900 (was €770)
Rent tax relief (given at 20%)
Under 55
Single: €2,000 (was €1,800)
Married/widowed: €4,000 (was €3,600)
Aged 55 and over
Single: €4,000 (was €3,600)
Married/widowed: €8,000 (was €7,200)
Trade union subscriptions: €350 (was €300)
Rent-a-room scheme
The exemption threshold applicable where a person rents out a room in his or her private residence, is increased to €10,000 (was €7,620).
Tax bands
The standard rate tax band (20%) has been widened as follows:
Single/widowed: €35,400 (was €34,000)
One parent family: €39,400 (was €38,000)
One income married couple: €44,400 (was €43,000)
Two income married couple: €44,400 (was €43,000) - this may be increased by the lower of:
(a) €26,400 (was €25,000) or
(b) the lower of the two incomes.
Exemption limits
The exemption limits for persons aged 65 years are increased as follows:
Single/widowed: 20,000 (was €19,000)
Married couple: 40,000 (was €38,000)
Tax relief at source - home loan interest relief
From 1 January 2008, for first-time buyers only, the annual ceiling on home loan interest is increased:
(a) in the case of a single person, to €10,000 (from €8,000), and
(b) in the case of a married couple to €16,000 (from €10,000).
The additional relief applies for the first seven years for which there is an entitlement to home loan interest relief.
Remitance basis
From 1 January 2008, the remittance basis (which currently applies to non-UK foreign investment income and foreign employment income) will extend to UK-sourced income. top |
PRSI and health contributions
From 1 January 2008:
The employee's annual earnings ceiling (above which an employee pays no social insurance contributions) is increased to €50,700 (previously €48,800).
The threshold for employee PRSI is increased to €352 a week (previously €339 a week).
The threshold for payment of the 2% health levy is also increased to €500 a week (previously €480 a week). The annual earnings threshold for the health levy is increased to €26,000 (previously €24,960).
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VAT
From 1 March 2008, the VAT rate on the supply of seeds, and of roots, bulbs, rhizomes and similar supplies used for the agricultural production of biofuel crops, e.g. elephant grass, will be reduced to 13.5% (previously 21%).
From 1 May 2008, the VAT registration thresholds are increased to €75,000 in the case of goods (previously €70,000) and €37,500 in the case of services (previously €35,000)
From 1 July 2008, a new simplified system will apply to VAT on property transactions. The new rules will apply to both residential and commercial property supplied in the course of business.
From 1 September 2008, supplies made by a subcontractor to a principal contractor in the construction sector will be subject to a reverse charge. This means that instead of the subcontractor charging VAT on his supply to a principal and accounting to Revenue for the VAT, the principal contractor will account to Revenue for the VAT. top
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Farming taxation
A new relief from capital gains tax on the dissolution of farm partnerships will be introduced in the Finance Bill. The relief will run for a period of 5 years.
Where a farmer on income averaging enters a milk production partnership the income tax claw back provisions will no longer apply.
Farmers in receipt of the Diversification Aid element of the Sugar Beet Compensation Package may spread these payments over six years for the purpose of calculating taxable income.
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Corporation tax 
Small companies have the option of paying their preliminary tax as 100% of the final liability for the previous accounting period. For preliminary tax payments dates after 5 December 2007, the tax liability threshold for treatment as a small company is increased to €200,000 (from €150,000).
Transitional arrangements which relax the interest charge on underpaid preliminary corporation tax for companies in very specific circumstances for certain companies whose accounts are based on International Financial Reporting Standards (IFRS) will be changed in the Finance Bill 2008 so that these arrangements can be used on a permanent basis.
The base year for expenditure which is used to calculate the qualifying incremental expenditure on research and development (R&D) under the tax credit scheme is being fixed at 2003 for a further four years to 2013. The change will provide an additional incentive for increased expenditure on R&D in future years.
These changes require EU approval. top
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Stamp duties
For instruments executed on or after 5 November 2007 in relation to transfers of residential property, a simplified system applies as follows:
The first €125,000* is exempt;
the next €875,000 is charged at 7% and
the excess over €1,000,000 is charged at 9%.
*To fully preserve the existing exemption, transactions with aggregate consideration not exceeding €127,000 are exempt from stamp duty.
The claw back period for first-time buyer relief and owner-occupier relief is reduced from 5 years to 2 years.
The stamp duty chargeable on financial cards is being reduced as follows:
Charge cards and credit card: €30 (was €40)
ATM cards and debit cards: €5 (was €10)
Combined ATM/debit cards: €10 (was €20)
The stamp duty chargeable on cheques/drafts is increased to 30 cent (from 15 cent).
The exemption threshold relating to the transfer of a site from parent to child for the purposes of constructing the child's principal private residence, is increased to €500,000 (from €254,000). A similar change will apply for capital gains tax purposes. top |
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