NRF Budget Briefing 2013

1. Budget 2013
KIERAN COUGHLAN – TAX MANAGER

2. • Backdrop
• Measures to improve job creation
• Property tax
• Taxation measures
• Measures to improve credit
• Changes in social welfare benefits
• Pensions
• Other matters
• Road tax
• Implications for contractors
• Summary

3. Backdrop
Reductions in Exchquer deficits
• 2009 Deficit €22,694m 11.8% GDP
• 2010 Underlying Deficit €16,700m 10.7% GDP
• 2011 Underlying Deficit €9,400m 9.4% GDP
• 2012 Deficit 8.2% GDP
• 2013 Deficit 7.5%GDP
• 2014 Deficit 5.1%GDP
• 2015 Deficit 2.9%GDP

4. 2013 Measures to improve job creation
• Corporation tax exemption for start ups to be extended
• EI to be granted extra €139m to assist exporting companies
• €175m Venture capital fund for start ups
• Doubling of initial amount qualifying for R&D tax credit
• Extending the Foreign Earnings Deduction for work related travel to
certain countries beyond the BRICS,
• Luas Broombridge project
• 520 construction jobs in Oberstown detention facility
• Energy efficiency fund – private funds to be supported by Government
• Continuation of reduced rate VAT for hospitality industry
• Tax measures for development of hangers and ancillary services

5. Property Tax
• 0.18% for houses up to €1m, additional 0.25% for excess over €1m
• Half rate Property Tax for 2013
• No NPPR for rental properties after 1/1/2014
• To be collected by Revenue
• Revenue will also collect any unpaid household charge (increases to
€200 for household charge not paid by 1 July 2013)
– Amount can be paid direct debit in July 2013,
– Or deducted by employer
• Exemption from property tax for 3 years for first time buyers and
purchasers of new properties
• Deferral available for very low income persons (€15k/€25k)

6. Property Tax - Examples
2014-15 Rate
Assessable Value 2013 Rate (per annum)
€50,000 €45 €90
€125,000 €113 €225
€175,000 €158 €315
€225,000 €203 €405
€275,000 €248 €495
€325,000 €293 €585
€375,000 €338 €675
€425,000 €383 €765
€475,000 €428 €855
Etc. Etc. Etc.
Homes over €1m
€1,000,000 €900 €1,800
€1,100,000 €1,150 €2,050

7. Taxation measures
• No increase in income tax
• No increase in universal social charges (except for pensioners earning
more than €60,000)
• No increase in rate of PRSI
• DIRT up 3% to 33%, CAT/CGT up 3% to 33%
However
• Extension to USC, PRSI on all income of self employed for 2013
• Extension to USC, PRSI on all income of employees for 2014
• USC increasing from 4% to 7% for pensioners earning more than
€60,000
• Employee exemption of €127 per week to be abolished – this will cost an
employee an additional €264 per year

8. 2013 – Measures to improve credit?
• Local enterprise offices - a new one stop shop for those looking for
advice…
• National Pensions Reserve fund to provide credit…
• Credit Review office staff to be increased…
• Nama to provide funding to purchasers…
• Questionable how successful these will be?

9. Changes in social wefare benefits
• No change to jobseekers, or disability payments
• Maternity benefit to become taxable from 1 July 2013
• Jobseekers benefit duration to be reduced by 3 months
• Household benefits package (TV, Phone to be restricted)
• Reduction in child benefit by €10 per month (but also previous reductions
announced) - 4 children €696 per annum drop!
• Low income households – child care places for low income workers and
some disadvantaged areas
• Medical card holders, increase by €1 to €1.5 per prescription
• Increase in monthly thresholds from €132 to €144 for drugs repayment
scheme
• GP card to replace Medical Card for pensioners earning between €600 to
€700 per week (single), & €1,200 to €1,400 per week (married)
• No cut to fuel allowance but…carbon tax?

10. Pensions
• Tax relief to continue at up to 41% for employees and 52% for company
contributions
• Overall cap where the pension scheme can deliver income of up to
€60,000 per annum
• Pensions levy not to be continued into 2014
• Option to withdraw up to 30% of funds invested in AVC’s, withdrawal
taxable at marginal rates

11. Other matters
• Student contribution to be increased by €250 per year for each year
2013 to 2015.
• Carbon Tax of €10/€20 from 1 May 2013/2014 – effect is same as
reduction in fuel allowance but affects wider
• No top slicing relief for termination payments made after 1/1/2013 where
the payment exceeds €200,000.
• VRT up approx 2% on value of car
Excise
• Pint 10cent
• Spirits 10cent
• Wine €1 per bottle
• Cigarrettes 10cent
• Rollies 50cent

12. Road Tax
Road Tax Road Tax
Road Tax Class - Pre 2008 cars Old Rate New Rate Difference
1L €185 €199 €14
1.4L €384 €413 €29
1.6L €506 €544 €38
1.9L €660 €710 €50
2L €843 €906 €63
Road Tax Road Tax
Road Tax Class - Post 2008 Cars Old Rate New Rate Difference
A A0 €160 €120 -€40
A A1 €160 €170 €10
A A2 €160 €180 €20
A A3 €160 €190 €30
A A4 €160 €200 €40
B B1 €225 €270 €45
B B2 €225 €280 €55
C €330 €390 €60
D €481 €570 €89

13. Implications for contractors
• No negative tax implications from Contracting
• No impact on income tax, PRSI or USC
• Pension relief continues at up to 52% for contributions from company
• In fact contractors have been sheltered from the cuts faced by regular
employees – €127 per week PRSI exemption applied only to employees

14. Overall consensus
• Taxes by the back door
• No great incentives introduced
• Repetition of previously introduced “positive tax measures”
• No debt forgiveness
• Cuts in social welfare at the periphery