On Tuesday, 13th October, the Minister for Finance Michael Noonan TD delivers the 2016 budget against a backdrop of exceptional growth in the domestic economy and tax revenues ahead of target. A budgetary adjustment of between €1.2bn and €1.5bn, split equally between tax and spending measures, is expected.
Last year, both the marginal rate of Income Tax and USC rates were reduced for those earning below €70,000. The Taoiseach has confirmed that next week's budget will continue the process of cutting personal taxes and a further reduction in the top rate of tax to below 50% for middle income earners, likely to be achieved through a reduction in the top of Income Tax and the USC rates, is expected.
Numerous pre-Budget submission have stressed the need to equalise the tax treatment of the self employed (55% marginal tax rate and no PAYE tax credit) with the employed (52% marginal tax rate plus PAYE tax credit) and it is hoped that some attempt to redress this imbalance will be made.
We are also hopeful that that Budget 2016 will introduce some measures to stimulate entrepreneurship and recognise the contribution that entrepreneurs make to the Irish economy, through a reduced CGT rate on the disposal of business assets or some form of rollover relief which would facilitate the reinvestment of proceeds.
Regarding capital taxes generally (capital gains tax and gift/inheritance tax), rates have remained unchanged for the last number of years so some reduction/re-basing of assets would be welcome. With property valuations increasing, it is rumoured that some specific measures may be introduced to reduce the rate of Inheritance tax applicable to the family home.
In the international arena/foreign direct investment front, a very significant development will have happened pre-Budget - with the OECD having issued their final report on the BEPS project (base erosion and profit shifting) project earlier this week. This 2 year project which looks at how multinationals pay taxes globally may impact on Ireland's relative competiveness for FDI investment.
In light of this, there is increased pressure on Ireland to maintain its international competitive advantage whilst being complaint with International rules. In this regard, the Budget is expected to provide details on the Knowledge Development Box (announced last year), specifically in relation to the preferential tax rate (5%?) to apply to income from the exploitation of Intellectual Property under the "Box" regime.
Fiona Murphy, Taxation Director with Russell Brennan Keane stresses that "attracting talent is also key to Ireland's offering to FDI" and we are expecting some enhancements to the Special Assignee Relief Programme, following on from last's years positive changes.
Finally, as the housing crisis continues, there is pressure on the government to introduce measures which will stimulate the construction industry and promote residential development. It has already been confirmed that the Home Renovation Incentive has been extended for another year, until the end of December 2016.
Overall, it is hoped that the forthcoming budget should be positive from a tax perspective particularly for low and middle income families with an increase in their take home pay.
Russell Brennan Keane, Ulster Bank and Athlone Chamber are holding a Budget Briefing on Wednesday morning, 14th October 2015 at the Hudson Bay Hotel to analyse the Minister's proposals and provide timely advice for businesses on the implications.
As one of the standout events in the Athlone Chamber of Commerce and Industry's calender the Chamber would like to once again thank RBK and Ulster Bank for supporting this very informative briefing. It is an opportunity for business people in Athlone and its Region to be immediately briefed on the content of the Budget as RBK work through the night to prepare the content with no small thanks to Fiona Murphy of RBK. Simon Barry Chief Economist, Republic of Ireland at Ulster Bank thereafter generally gives a very good overview of the effect of the budget as well as those of previous years and is never one to shy away from what in his view might be a good or bad budget for the economy as a whole. This year Regina Bushell, Athlone Chamber, will be chairing the briefing and looks forward to a lively questions and answers session to conclude the event.
Caroline Miney of Ulster Bank commented "We are delighted to again to be associated with the Annual Budget Breakfast in conjunction with our friends in Russell Brennan Keane and Athlone Chamber. I look forward to an informative and worthwhile event and to meet with you on the day," Caroline Miney is Head of Ulster Bank Galway / Mayo / Midlands Business Centres .
To register and hear all the latest from Fiona Murphy on how the budget affects you please contact firstname.lastname@example.org or call (090) 6480651.