Finance Act 2011

PART 1 Income Levy, Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1. Interpretation (Part 1).

1.— In this Part “Principal Act” means the Taxes Consolidation Act 1997.

Chapter 2 Income Levy and Universal Social Charge

2. Cessation of charge to income levy.

2.— The Principal Act is amended in Part 18A by inserting the following after section 531N:

“Cessation of charge to income levy.

531NA.— Subject to section 531AY, income levy shall cease to be charged, in accordance with this Part, for the year of assessment 2011 and subsequent years of assessment.”.

3. Universal social charge.

3.— (1) The Principal Act is amended—

(a) by inserting the following Part after Part 18C:

“PART 18D

Definitions (Part 18D).

531AL.— In this Part—

‘aggregate income for the tax year’, in relation to an individual and a tax year, means the aggregate of the individual’s—

(a) relevant emoluments in the tax year, including relevant emoluments that are paid in whole or in part for a tax year other than the tax year during which the payment is made, and

(b) relevant income for the tax year;

‘Collector-General’ means the Collector-General appointed under section 851;

‘employee’ and ‘employer’ have the same meanings as in section 983;

‘excluded emoluments’ means emoluments which have been gifted to the Minister for Finance under section 483;

‘income levy’ has the meaning assigned to it by section 531B;

‘income tax month’ means a calendar month;

‘inspector’ means an inspector of taxes or other officer of the Revenue Commissioners;

‘PAYE Regulations’ means the Income Tax (Employments) (Consolidated) Regulations 2001 (S.I. No. 559 of 2001);

‘relevant emoluments’ and ‘relevant income’ shall be construed in accordance with paragraphs (a) and (b), respectively, of the Table to section 531AM(1);

‘similar type payments’ means payments which are of a similar character to social welfare payments but which are made by—

(a) the Health Service Executive,

(b) the Department of Community, Equality and Gaeltacht Affairs,

(c) the Department of Enterprise, Trade and Innovation,

(d) the Department of Education and Skills,

(e) the Department of Agriculture, Fisheries and Food,

(f) An Foras Áiseanna Saothair, in respect of schemes mentioned in clauses (I), (II) and (III) of section 472A(1)(b)(i), or

(g) any other state or territory;

‘social welfare payments’ means payments made under the Social Welfare Acts;

‘tax year’ means a year of assessment within the meaning of the Tax Acts;

‘universal social charge’ has the meaning assigned to it by section 531AM.

Charge to universal social charge.

531AM.— (1) With effect from 1 January 2011, there shall be charged, levied and paid, in accordance with the provisions of this Part, a tax to be known as ‘universal social charge’ in respect of the income specified in paragraphs (a) and (b) of the Table to this subsection.

TABLE

(a) The income described in this paragraph (in this Part referred to as ‘relevant emoluments’) is emoluments to which Chapter 4 of Part 42 applies or is applied, including—

(i) any allowable contributions referred to in Regulations 41 and 42 of the PAYE Regulations,

(ii) the initial market value (within the meaning of section 510(2)) of any shares, excluded from the charge to income tax by virtue of section 510(4), appropriated in accordance with Chapter 1 of Part 17,

(iii) the market value (determined in accordance with section 548) of the right referred to in section 519A(1) or 519D(1), and

(iv) any gain exempted from income tax by virtue of section 519A(3) or 519D(3),

but not including—

(I) social welfare payments and similar type payments,

(II) excluded emoluments,

(III) emoluments disregarded by an employer on the direction of an inspector in accordance with Regulation 10(3) of the PAYE Regulations,

(IV) any amount in respect of which relief is due under section 201(5)(a) and paragraphs 6 and 8 of Schedule 3, and

(V) emoluments of an individual who is resident in a territory with which arrangements have been made under subsection (1)(a)(i) or (1B)(a)(ii) of section 826 in relation to affording relief from double taxation, where those emoluments are the subject of a notification issued under section 984(1).

(b) The income described in this paragraph (in this Part referred to as ‘relevant income’) is income, without regard to any amount deductible from or deductible in computing total income, from all sources as estimated in accordance with the Tax Acts, other than—

(i) relevant emoluments,

(ii) any emoluments, payments, expenses or other amounts referred to in clauses (I) to (V) of paragraph (a)(iv) of this Table,

(iii) any gains, income or payments to which any of the following provisions apply—

(I) Chapter 4 of Part 8;

(II) Chapter 5 of Part 8;

(III) Chapter 7 of Part 8;

(IV) Chapter 5 of Part 26;

(V) Chapter 6 of Part 26;

(VI) Chapter 1A of Part 27;

(VII) Chapter 4 of Part 27,

(iv) where section 825A applies in respect of an individual for a tax year, an amount equal to the difference between—

(I) the individual’s total income for the tax year had that section not applied for that year, and

(II) the amount of total income which if charged to income tax for the year would have given an amount of income tax payable equal to that which would be payable by virtue of the operation of that section,

(v) where section 1025 applies in respect of an individual, the amount of any deduction for any payment to which that section applies, made by an individual pursuant to a maintenance arrangement (within the meaning of that section) relating to the marriage for the benefit of the other party to the marriage unless section 1026 applies in respect of such payment,

(vi) where section 382 applies in respect of an individual carrying on a trade or profession, an amount equal to the amount referred to in section 531AU(1), and

(vii) where section 272, 284, 658 or 659 applies in respect of an individual carrying on a trade or profession, an amount equal to the amount referred to in section 531AU(2),

and—

(I) as if sections 140, 141, 142, 143, 195, 232, 234 and 664 were never enacted, and

(II) without regard to any deduction—

(A) in respect of double rent allowance under section 324(2), 333(2), 345(3) or 354(3),

(B) under section 372AP, in computing the amount of a surplus or deficiency in respect of rent from any premises,

(C) under section 372AU, in computing the amount of a surplus or deficiency in respect of rent from any premises,

(D) under section 847A, in respect of a relevant donation (within the meaning of that section), or

(E) under section 848A, in respect of a relevant donation (within the meaning of that section).

(2) Universal social charge shall not be payable for a tax year by an individual who proves to the satisfaction of the Revenue Commissioners that his or her aggregate income for the tax year does not exceed €4,004.

Rate of charge.

531AN.— (1) For the tax year 2011 and for each subsequent tax year an individual shall be charged to universal social charge on his or her aggregate income for the tax year—

(a) at the rate specified in column (2) of the Table to this section corresponding to the part of aggregate income specified in column (1) of that Table where the individual is aged under 70 years, and

(b) at the rate specified in column (3) of the Table to this section corresponding to the part of aggregate income specified in column (1) of that Table where the individual is aged 70 years or over at any time during the tax year.

(2) Notwithstanding subsection (1) and the Table to this section and subject to subsection (3), for the tax year 2011 and for each subsequent tax year where an individual has relevant income that exceeds €100,000, the individual shall, instead of being charged to universal social charge on the amount of the excess at the rates provided for in that Table, be charged on the amount of that excess—

(a) at the rate of 10 per cent where the individual is aged under 70 years, or

(b) at the rate of 7 per cent where the individual is aged 70 years or over at any time during the tax year.

(3) Notwithstanding subsection (1) and the Table to this section, for the tax year 2011 and for each subsequent tax year where an individual is aged under 70 years and has full eligibility for services under Part IV of the Health Act 1970, by virtue of sections 45 and 45A of that Act or Council Regulation (EEC) No. 1408/71 of 14 June 1971, the individual shall, instead of being charged to universal social charge on the part of aggregate income for the tax year concerned that exceeds €16,016 at the rate provided for in column (2) of that Table, be charged on the amount of the excess at the rate of 4 per cent.

(4) Subsections (2) and (3) shall cease to have effect for the tax year 2015 and subsequent tax years.

TABLE

Part of aggregate income	Rate of universal social charge (Individual aged under 70 years)	Rate of universal social charge (Individual aged 70 years or over)
(1)	(2)	(3)
The first €10,036	2%	2%
The next €5,980	4%	4%
The remainder	7%	4%

Deduction and payment of universal social charge on relevant emoluments.

531AO.— (1) An employer shall be liable in the first instance to pay universal social charge due in respect of any payment of relevant emoluments.

(2) As respects any payment of relevant emoluments made to or on behalf of an employee on or after 1 January 2011, universal social charge shall be deducted from such emoluments by the employer at any or all of the following rates:

(a) zero per cent where the amount of the relevant emoluments does not exceed €77, in the case where the period in respect of which the payment is being made is a week, or a corresponding amount where the period is greater or less than a week;

(b) 2 per cent on the full amount of the relevant emoluments where that amount exceeds €77 but does not exceed €193, in the case where the period in respect of which the payment is being made is a week, or a corresponding amount where the period is greater or less than a week;

(c) 4 per cent on the amount of the excess—

(i) where the amount of the relevant emoluments exceeds €193, but does not exceed €308,

(ii) where, in the case of an employee who is aged 70 years or over at any time during the tax year, the amount of the relevant emoluments exceeds €193, or

(iii) where, in the case of an employee who is aged under 70 years and has full eligibility for services under Part IV of the Health Act 1970, by virtue of sections 45 and 45A of that Act or Council Regulation (EEC) No. 1408/71 of 14 June 1971 [^1], the amount of the relevant emoluments exceeds €193,

in the case where the period in respect of which the payment is being made is a week, or a corresponding amount where the period is greater or less than a week;

(d) 7 per cent on the amount of the excess—

(i) where, in the case of an employee who is not aged 70 years or over at any time during the tax year, the amount of the relevant emoluments exceeds €308, or

(ii) where, in the case of an employee who does not have full eligibility for services under Part IV of the Health Act 1970, by virtue of sections 45 and 45A of that Act or Council Regulation (EEC) No. 1408/71 of 14 June 1971, the amount of the relevant emoluments exceeds €308,

in the case where the period in respect of which payment is being made is a week, or a corresponding amount where the period is greater or less than a week,

and notwithstanding that the relevant emoluments are in whole or in part for some tax year other than that during which the payment is made.

(3) The provisions of Part 4 of the PAYE Regulations, with any necessary modifications, shall apply to universal social charge in respect of relevant emoluments and universal social charge payable by an employee shall only be recoverable from him or her by his or her employer by deduction in accordance with those provisions.

(4) Within 14 days of the end of every income tax month the employer shall remit to the Collector-General the total of all amounts of universal social charge that the employer was liable to deduct from relevant emoluments paid by the employer during that income tax month.

(5) The Collector-General may, in writing, and unless the employer objects, authorise the employer to remit to the Collector-General, within 14 days from the end of such longer period (if any) than the period specified in subsection (4) but not exceeding one year, as may be so authorised, the total of all amounts of universal social charge which the employer was liable to deduct from relevant emoluments paid by the employer during that longer period.

(6) Where a remittance referred to in subsection (4) is made by such electronic means (within the meaning of section 917EA) as are approved by the Revenue Commissioners, that subsection shall apply and have effect as if ‘within 23 days of the end of every income tax month’ were substituted for ‘within 14 days of the end of every income tax month’ but, where that remittance is not made within that period of 23 days, subsection (4) shall apply and have effect without regard to the provisions of this subsection.

(7) On payment of universal social charge, the Collector-General may send, make available or cause to be made available to the employer concerned a receipt in respect of the payment which shall consist of whichever of the following the Collector-General considers appropriate, namely—

(a) a separate receipt in respect of each such payment, or

(b) a receipt for all such payments made within the period specified in the receipt.

(8) Within 46 days from the end of a tax year, or from the date the employer ceases permanently to be an employer to whom Regulation 7(1) of the PAYE Regulations applies, whichever is the earlier, the employer shall send to the Collector-General—

(a) a return, in a form provided or approved by the Revenue Commissioners, in respect of each individual to whom payment of relevant emoluments was made during the tax year showing—

(i) the total amount of universal social charge payable as respects the individual in the tax year,

(ii) the dates of commencement and cessation within the tax year of the employment of the individual, where applicable,

(iii) the rate of universal social charge payable as respects the individual, and

(iv) the total relevant emoluments paid to the individual in the tax year,

and

(b) a statement, declaration and certificate in such form as may be provided or approved by the Revenue Commissioners, showing the total amount of universal social charge which the employer was liable to remit in respect of every individual to whom payment of relevant emoluments was made in the tax year.

(9) Where the employer is a body corporate, the declaration and certificate referred to in subsection (8)(b) shall be signed either by the secretary or a director of the body corporate.

(10) (a) Within 46 days from the end of a tax year, the employer shall give to every employee who is in the employer’s employment on the last day of the tax year and from whose relevant emoluments any universal social charge has been deducted during that tax year, a certificate showing—

(i) the total amount of universal social charge deducted from the relevant emoluments of the employee during that tax year,

(ii) the date of commencement within that tax year of the employment of the employee, where applicable,

(iii) the rate of universal social charge payable as respects the employee, and

(iv) the total relevant emoluments paid to the employee in that tax year.

(b) The certificate specified in paragraph (a) shall be in such form as may be provided or approved by the Revenue Commissioners.

(11) (a) An employer shall, in the case of an employee to whom he or she makes a payment of relevant emoluments, give to the employee, on the cessation of the period of employment to which the payment of universal social charge in respect of the employee relates, a certificate showing—

(i) the total universal social charge as respects the employee which the employer was liable to remit for the tax year in which the cessation occurs up to and including the date of cessation,

(ii) the dates of commencement (where applicable) and cessation within that tax year of the employment of the individual,

(iii) the rate of universal social charge payable as respects the employee, and

(iv) the total relevant emoluments paid to the employee in that tax year up to and including the date of cessation.

(b) The certificate specified in paragraph (a) shall be in such form as may be provided or approved by the Revenue Commissioners.

(12) This section shall cease to have effect upon the coming into operation of the regulations made under section 531AAB.

Record keeping.

531AP.— (1) An employer shall record the following particulars in respect of each employee to whom payment of relevant emoluments has been made in a tax year—

(a) the amount of each payment of relevant emoluments,

(b) the amount of universal social charge deducted from each such payment,

(c) the total amount of universal social charge which the employer is liable to remit in respect of each such payment, and

(d) the dates of commencement and cessation within the tax year of the employment of the individual, where applicable.

(2) The records specified in subsection (1) shall be in a form approved by the Revenue Commissioners and shall be retained by employers for not less than 6 years after the end of the tax year to which they relate.

(3) This section shall cease to have effect upon the coming into operation of the regulations made under section 531AAB.

Power of inspection.

531AQ.— (1) Regulation 32 of the PAYE Regulations, as it relates to inspection of records, shall apply, with any necessary modifications, to the particulars recorded pursuant to section 531AP as it applies to the records specified in the said Regulation 32.

(2) This section shall cease to have effect upon the coming into operation of the regulations made under section 531AAB.

Estimation of universal social charge due.

531AR.— Sections 989, 990 and 990A shall apply to universal social charge as they apply to income tax.

Universal social charge payable by chargeable persons (within the meaning of Part 41).