Finance Act 2015

PART 1 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 Universal Social Charge

2. Amendment of Part 18D of Principal Act (universal social charge)

2. (1) Part 18D of the Principal Act is amended—

(a) in section 531AM—

(i) in paragraph (a) of the Table to subsection (1) —

(I) in subparagraph (IV), by substituting “Schedule 3,” for “Schedule 3, and”,

(II) in subparagraph (V), by substituting “782A(3), and” for “782A(3).”, and

(III) by inserting the following subparagraph after subparagraph (V):

“(VI) emoluments in the nature of a contribution by an employer to a PRSA (within the meaning of Chapter 2A of Part 30).”,

and

(ii) in subsection (2), by substituting “€13,000” for “€12,012”,

and

(b) in section 531AN—

(i) in subsection (3) by substituting—

(I)“€18,668” for “€17,576”, and

(II)“3 per cent” for “3.5 per cent”,

(ii) in subsection (3A)(a) by substituting “3 per cent” for “3.5 per cent”,

(iii) by inserting the following after subsection (4):

“(5) Subject to subsection (7), where relevant emoluments are paid on 31 December in a tax year or, if that year is a leap year, on 30 or 31 December in that year (referred to in this section as the ‘relevant date’) to an individual who is paid weekly or fortnightly, the part of aggregate income specified in column (1) of Part 1 or column (1) of Part 2, as appropriate, of the Table to this section shall be increased by—

(a) where the individual is paid weekly, one-fifty second of the amounts referred to in the appropriate column, and

(b) where the individual is paid fortnightly, one-twenty sixth of the amounts referred to in the appropriate column,

but where the relevant emoluments paid on the relevant date is less than the increase provided in paragraph (a) or (b), as appropriate, the increase in the part of the aggregate income shall be limited to the amount of the relevant emoluments.

(6) Where subsection (5) applies in respect of an individual, each amount of aggregate income referred to in subsections (1) and (3) and section 531AM(2) shall be increased by—

(a) where the individual is paid weekly, one-fifty second of the amount, and

(b) where the individual is paid fortnightly, one-twenty sixth of the amount,

but where the amount of the relevant emoluments paid on the relevant date is less than the increase provided in paragraph (a) or (b), as appropriate, the increase shall be limited to the amount of the relevant emoluments.

(7) Subsection (5) shall not apply where the normal day on which relevant emoluments are paid to an individual, who is paid weekly or fortnightly, during a tax year changes either during that year or the preceding year.”,

and

(iv) by substituting the following Table for the Table to that section:

“TABLE

PART 1

Part of aggregate income	Rate of universal social charge
(1)	(2)
The first €12,012	1 per cent
The next €6,656	3 per cent
The next €51,376	5.5 per cent
The remainder	8 per cent

PART 2

Part of aggregate income	Rate of universal social charge
(1)	(2)
The first €12,012	1 per cent
The remainder	3 per cent

”.

(2) (a) Subsection (1), other than subparagraph (iii) of paragraph (b), applies for the year of assessment 2016 and each subsequent year of assessment.

(b) Subsection (1)(b)(iii) applies for the year of assessment 2015 and each subsequent year of assessment.

Chapter 3 Income Tax

3. Earned income tax credit

3. (1) The Principal Act is amended by inserting the following after section 472AA:

“472AB. (1) In this section—

‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

‘qualifying earned income’ means earned income but does not include emoluments within the meaning of section 472.

(2) Subject to subsection (3), where, for any year of assessment, a claimant proves that his or her total income for the year consists in whole or in part of qualifying earned income (including, in a case where the claimant is a married person assessed to tax in accordance with section 1017, or a civil partner assessed to tax in accordance with section 1031C, any qualifying earned income of the claimant’s spouse or civil partner deemed to be income of the claimant by either of those sections for the purposes referred to in the relevant section) the claimant shall be entitled to a tax credit (to be known as the ‘earned income tax credit’) of—

(a) where the qualifying earned income (but not including, in the case where the claimant is a married person or a civil partner so assessed, the qualifying earned income, if any, of the claimant’s spouse or civil partner, as the case may be) arises to the claimant, the lesser of an amount equal to the appropriate percentage of the qualifying earned income and €550, and

(b) where, in a case where the claimant is a married person or a civil partner so assessed, the qualifying earned income arises to the claimant’s spouse or civil partner, as the case may be, the lesser of an amount equal to the appropriate percentage of the qualifying earned income and €550.

(3) Where the claimant is entitled to—

(a) employee tax credit in accordance with subsection (4)(a) of section 472 and earned income tax credit under paragraph (a) of subsection (2), the aggregate of those tax credits shall not exceed €1,650, and

(b) employee tax credit in accordance with subsection (4)(b) of section 472 and earned income tax credit under paragraph (b) of subsection (2), the aggregate of those tax credits shall not exceed €1,650.”.

(2) Subsection (1) applies for the year of assessment 2016 and each subsequent year of assessment.

4. Amendment of section 466A of Principal Act (home carer tax credit)

4. (1) Section 466A of the Principal Act is amended—

(a) in subsection (2), by substituting “€1,000” for “€810”, and

(b) in subsection (6)(a), by substituting “€7,200” for “€5,080”.

(2) Subsection (1) applies for the year of assessment 2016 and each subsequent year of assessment.

5. Amendment of section 192A of Principal Act (exemption in respect of certain payments under employment law)

5. Section 192A(1) of the Principal Act is amended in the definition of “relevant authority” by substituting the following for paragraph (b):

“(b) the Director of the Equality Tribunal,

(ba) an adjudication officer of the Workplace Relations Commission,

(bb) the Workplace Relations Commission,

(bc) the District Court,”.

6. Exemption in respect of certain expense payments for relevant directors

6. The Principal Act is amended by inserting the following section after section 195A:

“Exemption in respect of certain expense payments for relevant directors

195B. (1) In this section—

‘company’ has the same meaning as it has in section 4;

‘director’ has the same meaning as it has in section 770;

‘expenses’ means vouched expenses;

‘relevant director’, in relation to a company, means a director who is not resident in the State and is a non-executive director of that company;

‘relevant meeting’ means a meeting attended by a relevant director in his or her capacity as a director for the purposes of the conduct of the affairs of the company;

‘travel’ means travel by car, motorcycle, taxi, bus, rail, boat or aircraft.

(2) This section applies to payments made by a company to or on behalf of a relevant director of that company in respect of expenses of travel and subsistence incurred by the relevant director, on and from 1 January 2016, solely for the purpose of the attendance by him or her at a relevant meeting.

(3) So much of a payment to which this section applies shall be exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.”.

7. Exemption in respect of certain expenses of State Examinations Commission examiners

7. The Principal Act is amended by inserting the following section after section 195B:

“Exemption in respect of certain expenses of State Examinations Commission examiners

195C. (1) In this section—

‘civil servant’ has the meaning assigned to it by the Civil Service Regulation Act 1956;

‘employee’ has the same meaning as in section 983;

‘examination purposes’ means:

(a) the development of examination papers or other examination materials;

(b) the marking of such papers or other such materials; or

(c) the carrying out of invigilator duties at an examination;

‘examination’ means any examination standing specified for the time being in Schedule 2 to the Education Act 1998;

‘examination paper’ includes any paper, plan, map, drawing, diagram, pictorial or graphic work or other document and any photograph, film or recording (whether of sound or images or both)—

(a) in which questions are set for answer by candidates as part of an examination or which are related to such questions, or

(b) in which projects or practical exercises are set which candidates are required to complete as part of an examination or which are related to such projects or exercises;

‘examiner’ means, other than a person employed as an Examinations and Assessment Manager, a person who is an employee of the relevant employer for examination purposes;

‘relevant employer’ means the State Examinations Commission;

‘travel’ means travel by car, motorcycle, taxi, bus or rail.

(2) This section applies to payments made by the relevant employer to or on behalf of an examiner in respect of expenses of travel and subsistence incurred by the examiner, on and from 1 January 2016, for examination purposes.

(3) So much of any payment to which this section applies, as does not exceed the upper of any relevant rate or rates laid down from time to time by the Minister for Public Expenditure and Reform in relation to the payment of expenses of travel and subsistence of a civil servant, shall be exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.”.

8. Amendment of section 470 of Principal Act (relief for insurance against expenses of illness)

8. (1) Section 470 of the Principal Act is amended in subsection (1) by substituting the following for the definition of “child”:

“ ‘child’ means an individual under the age of 21 years in respect of whom the payment under a relevant contract has been reduced in accordance with paragraph (a)(ii) or (b)(i)(I) of section 7(5) of the Health Insurance Act 1994;”.

(2) This section shall apply in respect of relevant contracts (within the meaning of section 470 of the Principal Act) entered into or renewed on or after 1 May 2015.

9. Amendment of section 477B of Principal Act (home renovation incentive)

9. Section 477B of the Principal Act is amended in subsection (2) —

(a) in paragraph (a) by substituting “2016” for “2015” in each place where it occurs, and

(b) in paragraph (d) —

(i) by substituting “2016” for “2015” in each place where it occurs, and

(ii) by substituting “2017” for “2016” in each place where it occurs.

10. Professional services withholding tax

10. (1) The definition of “professional services” in section 520(1) of the Principal Act is amended—

(a) in paragraph (d) by substituting “other legal services, and” for “other legal services,”,

(b) in paragraph (e) by substituting “geological services;” for “geological services, and”, and

(c) by deleting paragraph (f).

(2) Schedule 13 to the Principal Act is amended—

(a) by deleting paragraphs 24, 28, 100, 101, 103, 114, 121, 149 and 182,

(b) by inserting the following paragraph after paragraph 195:

“196. Irish Human Rights and Equality Commission.

and

(c) (i) in paragraph 35 by substituting “daa public limited company” for “Dublin Airport Authority public limited company”,

(ii) in paragraph 40 by substituting “Ervia” for “Bord Gáis Éireann”,

(iii) in paragraph 82 by substituting “The Pensions Authority” for “The Pensions Board”, and

(iv) in paragraph 148 by substituting “Health Products Regulatory Authority” for “Irish Medicines Board”.

11. Granting of vouchers

11. (1) The Principal Act is amended by inserting the following after section 112A:

“112B. (1) In this section—

‘benefit’ means a tangible asset other than cash;

‘qualifying incentive’ means either a voucher or a benefit that is given to an employee by his or her employer in a year of assessment where the following conditions are satisfied:

(a) the voucher or the benefit does not form part of a salary sacrifice arrangement;

(b) the voucher can only be used to purchase goods or services and cannot be redeemed, in full or in part, for cash;

(c) the voucher or the benefit cannot exceed €500 in value;

(d) not more than one voucher or benefit can be given to that employee in any year of assessment;

‘salary sacrifice arrangement’ means any arrangement under which an employee forgoes the right to receive any part of his or her remuneration due under his or her terms or contract of employment and in return his or her employer agrees to provide him or her with a qualifying incentive.

(2) A qualifying incentive shall be exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.”.

(2) Subsection (1) comes into operation on 22 October 2015.

12. Amendment of section 372AP of Principal Act (relief for lessors)

12. (1) Section 372AP of the Principal Act is amended by inserting the following subsection after subsection (13):

“(13A) Section 555 shall apply as if a deduction under this section were a capital allowance and, where subsection (7) applies, as if the amount represented by ‘A’ in the formula in that subsection were a balancing charge.”.

(2) Subsection (1) shall have effect in relation to an event, referred to either in paragraph (a) or (b) of subsection (7) of section 372AP of the Principal Act, occurring on or after 1 January 2012.

13. Amendment of section 959B of Principal Act (supplemental interpretation provisions)

13. (1) Section 959B of the Principal Act is amended in subsection (1)(a) by substituting “€5,000” for “€3,174”.

(2) Subsection (1) applies for the year of assessment 2016 and each subsequent year of assessment.

14. Amendment of Schedule 25B to Principal Act (list of specified reliefs and method of determining amount of specified relief used in a tax year)

14. (1) Schedule 25B to the Principal Act is amended by deleting the entry at Reference Number 7 and the matters set out opposite that reference number.

(2) Subsection (1) applies as respects profits or gains, to which section 232 of the Principal Act applies, arising on or after 1 January 2016.

Chapter 4 Income Tax, Corporation Tax and Capital Gains Tax

15. Amendment of section 97 of Principal Act (computational rules and allowable deductions)

15. (1) Section 97 of the Principal Act is amended by inserting the following subsection after subsection (2J):

“(2K) (a) In this subsection—

‘Board’ means the Private Residential Tenancies Board;

‘household’ has the meaning assigned by the Housing (Miscellaneous Provisions) Act 2009;

‘housing authority’ has the meaning assigned by the Housing (Miscellaneous Provisions) Act 1992;

‘lease’ means any lease or tenancy in respect of a residential premises required to be registered by the person chargeable under Part 7 of the Residential Tenancies Act 2004;

‘Minister’ means Minister for the Environment, Community and Local Government;

‘qualifying lease’ means a lease granted by the person chargeable to a qualifying tenant;

‘qualifying tenant’, in relation to a qualifying lease, means—

(i) a household in respect of which rent is payable by a housing authority—

(I) in accordance with Part 4 of the Housing (Miscellaneous Provisions) Act 2014, or

(II) under a contract under section 19 of the Housing (Miscellaneous Provisions) Act 2009, between the housing authority and the person chargeable,

or

(ii) an individual in respect of whom a rent supplement is payable by, or on behalf of, the Minister for Social Protection;

‘register’ means the private residential tenancies register maintained by the Board under Part 7 of the Residential Tenancies Act 2004;

‘relevant borrowings’ means borrowed money employed in the purchase, improvement or repair of a premises or a part of a premises which, at a time interest accrues on the borrowings, is a residential premises let under a qualifying lease;

‘relevant interest’, in relation to relevant borrowings and a specified period, means the amount by which the aggregate deductions authorised by subsection (2)(e) are reduced by the application of subsection (2J) in respect of that part of the chargeable periods (within the meaning of section 321) that falls within the specified period and, for the purposes of this definition, interest shall be treated as accruing from day to day;

‘relevant undertaking’, in relation to a residential premises, means an undertaking under paragraph (b) (i) ;

‘rent supplement’ means any payment under section 198 of the Social Welfare Consolidation Act 2005 towards the amount of rent payable by an individual in respect of a residential premises;

‘specified period’ means a continuous period of 3 years commencing on or after 1 January 2016 but not later than 31 December 2019.