On 21 July the Department of Finance published the Tax Strategy Group papers in advance of Budget 2017.
The papers published consider changes to the main areas of Irish tax, while there is a specific briefing note on share schemes which is a strong indicator of changes in this area. Amoung the proposed recommendations are:-
Legislation to implement the EU Directive on Administrative Co-operation ('DAC3'), which will require the automatic exchange of tax rulings between Member States, and the EU Directive on Administrative Co-operation ('DAC4'), to implement the OECD Base Erosion and Profit Shifting (BEPS) recommendation on Country by Country reporting.
Amendment to the Knowledge Development Box ('KDB') in respect of which a separate consultation is underway.
Value Added Tax
An increase in the rate of tourism VAT (currently 9%).
An increase in the VAT thresholds to €40,000 for services and €80,000 for goods.
An increase in the standard rate bands of €1,000 for all tax payers.
An increase in the entry threshold to USC to €14,000 as part of the continued phasing out of the USC.
The withdrawal of PAYE and Earned Income credits (current €550 EIC) for individuals with income in excess of €100,000.
An increase in the annual CGT exemption from €1,270 to €1,500.
The introduction of a second reduced rate of CGT for standard rate tax payers.
An amendment to the existing Entrepreneur Relief in order to incorporate a 10% rate for business disposals up to a limit of €10m (as per the Programme for a Partnership Government)..
The inclusion of a CGT relief or exemption for investors as part of the Employment and Investment Incentive ('EII') Scheme.
Gift and Inheritance Taxes
An increase in the Class A threshold to €500,000 with reciprocal increases in the Class B and Class C bands to keep the thresholds in line with historic levels.
A new tax on sugar sweetened drinks.
Stamp Duty and DIRT
An increase in the 1% rate of duty on share transfers.
The abolition of the insurance levy of 1% on all life assurance premiums.
A reduction in the rate of DIRT to 40% (currently 41%)
Tax Strategy Group
The Tax Strategy Group is an interdepartmental committee chaired by the Department of Finance, with membership comprising senior officials and advisors from the Departments of Finance, Taoiseach, Enterprise Trade and Employment, Social Community and Family Affairs and the Revenue Commissioners. Papers on various options for the Budget and for the medium and longer term are prepared for the Tax Strategy Group