Sunday, 29 October 2017 13:06

Ireland - budget 2018

The Irish Government announced the Budget 2018 on the 10th of October 2017, with some changes in critical areas like taxation and social welfare.

The standard rate income tax band for all earners, for example, is increasing by €750. This means an increase from €33,800 to €34,550 for single individuals and from €42,800 to €43,550 for married one-earner couples (January 2018). 

Mortgage interest relief is being extended for remaining recipients (owner occupiers who took out qualifying mortgages between 2004 and 2012) on a tapered basis. 75% of the existing 2017 relief will be continued into 2018, 50% into 2019 and 25% into 2020. The relief will cease entirely from 2021.

The Government has modified also the taxation related to the Universal Social Charge; incomes of €13,000 or less will continue to be exempt from USC in 2018. Once the income is over this limit, the rate of USC will be as follow: 

  • €0 to €12,012 @ 0.5%
  • €12,012 to €19,372 @ 2%
  • €19,372 to €70,044 @ 4.75%
  • €70,044+ @ 8%

The debate in preparation of the Budget 2018 was focus more on the social housing. The public opinion considers the lack of home as one of the major problem the government has to solve. In the budget 2018, an increase of €31 million has been allocated to the Social Housing Current Expenditure Programme, bringing the total to €115 million. Local authorities and approved housing bodies are to build approximately 3,800 new social houses in 2018. Moreover, from 2019, an extra €500 million will be provided for the direct building programme, to build an additional 3,000 social houses by 2021.
In order to solve the problem, the government has also decided to increase the Housing Assistance Payment (HAP) scheme by €149 million to €301 million. This will provide for an additional 17,000 households to be accommodated under HAP in 2018 and support the nationwide rollout of the HAP Place Finder Service for people who are in emergency accommodation. Funding of €134 million is allocated to the Rental Accommodation Scheme (RAS) to provide for an additional 600 new transfers under the scheme, as well as the ongoing cost of households already supported under RAS.

Some measurements were decided by the Government with effect to the day to day life. The budget 2018, for example, increases the excise duty on a packet of 20 cigarettes by 50 cents (including VAT) with a pro-rata increase on other tobacco products and an additional 25 cents on roll-your-own tobacco. This took effect from midnight on 10th October 2017. Furthermore, on 1st April 2018, it will be introduced a tax on sugar sweetened. The tax will apply to sugar sweetened drinks with a sugar content between 5 grams and 8 grams per 100ml at a rate of 20c per litre. A second rate will apply for drinks with a sugar content of 8 grams or above at 30c per litre.


Related items

  • Hong Kong implements the two-tiered profits tax rates regime

    On March 29 2018, Hong Kong’s Legislative Council passed Inland Revenue (Amendment) (No. 3) Ordinance 2018 (the Ordinance) to implement the two-tiered profits tax rates regime announced in the 2017 Policy Address.

    The two-tiered profits tax rates regime will be applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first $2 million of profits of corporations will be lowered to 8.25 per cent. Profits above that amount will continue to be subject to the tax rate of 16.5 per cent. For unincorporated businesses (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 per cent and 15 per centA tax-paying corporation or unincorporated business may save up to $165,000 and $150,000 each year respectively.

  • VAT changes in China starting from May

    Good news about the Chinese VAT tax rate since the Chinese State Council, during the meeting chaired by Premier Li Keqiang and held on 28 March 2018, announced that China will cut VAT tax rates related to some industrial sectors. The State Council decision is part of a tax reduction plan amounting to 400 billion yuan ($63.58 billion) to drive high-quality industries development.

    Indeed, the meeting pointed out that in China the tax reduction over the past five years has reached the amount of 2.1 trillion yuan.

  • Spring Budget 2017 - The Highlights

    Chancellor Philip Hammond presented his Spring Budget to the House of Commons.