Finance Act 2021

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 section 531AN of Principal Act (rate of charge)

2. (1) Section 531AN of the Principal Act is amended—

(a) in subsection (3), by the substitution of “€21,295” for “€20,687”,

(b) in subsection (4), by the substitution of “2023” for “2022”, and

(c) by the substitution of the following for Part 1 of the Table to that section:

“Part 1

Part of aggregate income	Rate of universal social charge
(1)	(2)
The first €12,012	0.5 per cent
The next €9,283	2 per cent
The next €48,749	4.5 per cent
The remainder	8 per cent

”.

(2) Subsection (1) applies for the year of assessment 2022 and each subsequent year of assessment.

Chapter 3 Income Tax

3. Deduction in respect of certain expenses of remote working

3. (1) Chapter 2 of Part 5 of the Principal Act is amended by the insertion of the following section after section 114:

“114A. (1) In this section—

‘qualifying residence’ means a residential premises that is also used by a remote worker to perform the duties of his or her office or employment;

‘relevant expenses’, in relation to a remote worker, means expenses incurred and defrayed by the remote worker in respect of the provision of electricity, heating or an internet service in his or her qualifying residence;

‘remote worker’ means a person who is the holder of an office or employment of profit and who performs the duties of his or her office or employment—

(a) by working from his or her residential premises on a full-time or part-time basis, or

(b) by working some of his or her normal working time from his or her residential premises, with the remainder of that normal working time being spent in his or her normal place of employment or in some other place;

‘residential premises’ means, a dwelling or part of a dwelling which is occupied by an individual as his or her residence;

‘specified amount’, in relation to a year of assessment, means the amount of expenditure which qualifies for income tax relief in accordance with this section.

(2) Where in any year of assessment a remote worker, having made a claim in that behalf, proves that he or she has incurred and defrayed relevant expenses out of the emoluments of the office or employment of profit, he or she shall be entitled to claim a deduction (in this section referred to as ‘remote working relief’) from the emoluments to be assessed in respect of the specified amount determined in accordance with subsection (4).

(3) Subject to this section, where, for a year of assessment, an individual (in this section referred to as the ‘claimant’), on making a claim in that behalf, proves that relevant expenses were incurred by—

(a) in a case in which the claimant is a married person assessed to tax for the year of assessment in accordance with section 1017 or a civil partner assessed to tax for the year of assessment in accordance with section 1031C, the claimant or his or her spouse or civil partner, or

(b) in any other case, the claimant,

then the claimant shall be entitled to remote working relief.

(4) The specified amount, in relation to relevant expenses incurred by a remote worker in any year of assessment, shall be 30 per cent of an amount determined by the following formula:

where—

A is the amount of the relevant expenses incurred and defrayed by the remote worker in the year of assessment,

B is the number of days in the year of assessment the remote worker performed the duties of his or her office or employment of profit from his or her qualifying residence,

C is the number of days in the year of assessment, and

D is any amount reimbursed or to be reimbursed, directly or indirectly to the remote worker in relation to those expenses by his or her employer.

(5) Where the cost of incurring and defraying relevant expenses is shared by 2 or more persons (other than a person referred to in subsection (3)(a)) residing in a qualifying residence in a year of assessment, then, for the purposes of any claim for relief under this section, the total cost of incurring and defraying those expenses in the year of assessment shall be apportioned between each of the persons concerned by reference to the amount of those expenses that were defrayed by each such person.

(6) On making a claim under this section, a claimant shall provide to the Revenue Commissioners, through such electronic means as the Revenue Commissioners make available, full particulars of the relevant expenses, including—

(a) a copy of the statement issued by the service provider in respect of the service provided to the qualifying residence that constitutes the relevant expenses, and

(b) any other relevant information that may reasonably be required by the Revenue Commissioners to determine whether the requirements of this section are met.

(7) Where relief is given under this section to any individual in respect of relevant expenses, no relief or deduction under any other provision of the Income Tax Acts shall be given or allowed in respect of those relevant expenses.”.

(2) This section shall have effect for the year of assessment 2022 and each subsequent year of assessment.

4. Exemption in respect of Pandemic Placement Grant

4. Chapter 1 of Part 7 of the Principal Act is amended by the insertion of the following section after section 192H:

“192I. (1) In this section—

‘Minister’ means the Minister for Health;

‘qualifying grant’ means a grant, generally referred to and commonly known as the Pandemic Placement Grant, which is made periodically by or on behalf of the Minister to a qualifying student;

‘qualifying student’ means an undergraduate student who is registered on the candidate register maintained by the Nursing and Midwifery Board of Ireland and who is undertaking what is generally referred to and commonly known as a Supernumerary Clinical Placement or an Internship Clinical Placement as part of a qualifying course;

‘qualifying course’ means an undergraduate programme in nursing or midwifery, approved by the Nursing and Midwifery Board of Ireland under section 85(2) of the Nurses and Midwives Act 2011.

(2) Subject to subsection (3), a qualifying grant made to a qualifying student on or after 1 January 2021 and on or before 31 December 2022 shall be exempt from income tax and shall not be reckoned in computing the total income of the qualifying student for the purposes of the Income Tax Acts.

(3) This exemption shall apply to a maximum amount of €2,100 for each qualifying student in the year of assessment to which it relates.”.

5. Amendment of section 477C of Principal Act (Help to Buy)

5. Section 477C of the Principal Act is amended—

(a) in subsection (1), by the substitution in the definition of “qualifying period” of “2022” for “2021”,

(b) in subsection (5A), by the substitution of “2022” for “2021”,

(c) in subsection (8)(b), by the substitution of “2022” for “2021”,

(d) in subsection (16)(a)—

(i) by the substitution in subparagraph (ii) of “2022” for “2021”, and

(ii) by the substitution in subparagraph (iii) of “2022” for “2021”,

and

(e) in subsection (25), by the substitution of “2022” for “2021”.

6. Rate of charge and personal tax credits

6. As respects the year of assessment 2022 and subsequent years of assessment, the Principal Act is amended—

(a) in section 15—

(i) in subsection (3)(i), by the substitution of “€27,800” for “€26,300”, and

(ii) by the substitution of the following Table for the Table to that section:

“TABLE

PART 1

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €36,800	20 per cent	the standard rate
The remainder	40 per cent	the higher rate

PART 2

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €40,800	20 per cent	the standard rate
The remainder	40 per cent	the higher rate

PART 3

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €45,800	20 per cent	the standard rate
The remainder	40 per cent	the higher rate

”,

(b) in section 461—

(i) in paragraph (a), by the substitution of “€3,400” for “€3,300”,

(ii) in paragraph (b), by the substitution of “€3,400” for “€3,300”, and

(iii) in paragraph (c), by the substitution of “€1,700” for “€1,650”,

(c) in section 472, in subsection (4), by the substitution of “€1,700” for “€1,650” in each place where it occurs, and

(d) in section 472AB—

(i) in subsection (2), by the substitution of “€1,700” for “€1,650” in each place where it occurs, and

(ii) in subsection (3), by the substitution of “€1,700” for “€1,650” in each place where it occurs.

7. Amendment of section 118 of Principal Act (benefits in kind: general charging provision)

7. (1) Section 118 of the Principal Act is amended by the insertion of the following subsections after subsection (5H):

“(5I) (a) Subject to paragraph (b), subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee of a qualifying medical check-up, where—

(i) qualifying medical check-ups are made available generally by the body corporate to all directors and employees of that body corporate, or

(ii) the director or employee is required by the terms of his or her office or employment to undergo the qualifying medical check-up.

(b) A director or employee shall not, by virtue of this subsection, be relieved from a charge to income tax under subsection (1) more than once in any year of assessment, unless subparagraph (ii) of paragraph (a) applies.

(c) In this subsection—

‘medical practitioner’ means a person who is registered in the register established under section 43 of the Medical Practitioners Act 2007;

‘qualifying medical check-up’ means a medical examination carried out by a medical practitioner to test a person’s state of health.

(5J) (a) Subsection (1) shall not apply to health expenses incurred by the body corporate in or in connection with the provision for a director or employee of health care, where health care is made available generally by the body corporate to all directors and employees of that body corporate.

(b) In this subsection, ‘health care’ and ‘health expenses’ have the same meanings respectively as they have in section 469.

(5K) (a) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee of a Covid-19 test where—

(i) the test is necessary for the performance of the duties of the office or employment of the director or employee, and

(ii) Covid-19 tests are made available by the body corporate to all directors and employees of that body corporate where necessary for the performance of the duties of the office or employment of those directors and employees.

(b) In this subsection—

‘Covid-19’ means a disease caused by infection with the virus SARS-CoV-2 and specified as an infectious disease in accordance with Regulation 6 of, and the Schedule to, the Infectious Diseases Regulations 1981 (S.I. No. 390 of 1981) or any variant of the disease so specified as an infectious disease in those Regulations;

‘Covid-19 test’ means a relevant test, administered in accordance with the instructions of the manufacturer of the test, the purpose of which is to detect the presence of Covid-19 in the person to whom the test is administered;

‘rapid antigen test’ means a test that relies on detection of viral proteins (antigens) using a lateral flow immunoassay that gives results in less than 30 minutes;

‘relevant test’ means—

(a) an RT-PCR test,

(b) a rapid antigen test of a kind—

(i) included, for the time being, in the common list of Covid-19 rapid antigen tests agreed in accordance with the Council Recommendation of 21 January 2021[^1], and

(ii) that complies with the requirements of Directive 98/79/EC of the European Parliament and of the Council of 27 October 1998[^2] or, as appropriate, Regulation (EU) 2017/746 of the European Parliament and of the Council of 5 April 2017[^3],

or

(c) a rapid antigen test of a kind that complies with regulatory requirements under the laws of a state other than a Member State that are equivalent to the requirements referred to in paragraph (b)(ii);

‘RT-PCR test’ means a reverse transcription polymerase chain reaction test.

(5L) (a) Subsection (1) shall not apply to expense incurred by the body corporate, or incurred by a director or employee and reimbursed by the body corporate, in or in connection with the provision for a director or employee of an influenza vaccine, where influenza vaccines are made available generally by the body corporate to all directors and employees of that body corporate.

(b) In this subsection, ‘influenza vaccine’ means an influenza vaccine specified in column 1 of the Eighth Schedule to the Medicinal Products (Prescription and Control of Supply) Regulations 2003 (S.I. No. 540 of 2003) and administered in accordance with the requirements specified in columns 2 to 6 of that Schedule opposite the mention of the product concerned.

(c) Relief shall not be given under section 469 in respect of the expense referred to in paragraph (a) incurred by a director or employee and reimbursed by the body corporate.”.

(2) Subsection (1) shall be deemed to have come into operation on 1 January 2021.

8. Amendment of section 127B of Principal Act (tax treatment of flight crew in international traffic)

8. Section 127B of the Principal Act is amended by the insertion of the following subsection after subsection (1):

“(1A) Subsection (1) shall not apply for the year of assessment 2022 or any subsequent year of assessment where, for that year of assessment an individual—

(a) is not resident in the State,

(b) is resident for the purposes of tax, by virtue of the law of the territory next-mentioned in this paragraph, in a territory with the government of which arrangements are for the time being in force by virtue of section 826(1), and

(c) is subject to tax on the income referred to in subsection (1) in a territory with the government of which arrangements are for the time being in force by virtue of section 826(1).”.

9. Benefit-in-kind: emissions-based calculations

9. (1) Section 121 of the Principal Act is amended, in subsection (4A), by the insertion of the following paragraph after paragraph (a):

“(aa) Notwithstanding paragraph (a), where a car in respect of which this subsection applies is an electric vehicle, the cash equivalent of the benefit of the car ascertained under paragraph (a) shall be computed on the original market value of the car reduced by:

(i) €35,000 in respect of a car made available in the period 1 January 2023 to 31 December 2023;

(ii) €20,000 in respect of a car made available in the period 1 January 2024 to 31 December 2024;

(iii) €10,000 in respect of a car made available in the period 1 January 2025 to 31 December 2025.”.

(2) Section 121A of the Principal Act is amended in subsection (2)(b)—

(a) in subparagraph (v)(III), by the substitution of “employment,” for “employment, and”,

(b) in subparagraph (vi), by the substitution of “€50,000, and” for “€50,000.”, and

(c) by the insertion of the following subparagraph after subparagraph (vi):

“(vii) where a van is an electric vehicle, the cash equivalent of the benefit of the van ascertained under subsection (3) shall be computed on the original market value of the van reduced by:

(I) €35,000 in respect of a van made available in the period 1 January 2023 to 31 December 2023;

(II) €20,000 in respect of a van made available in the period 1 January 2024 to 31 December 2024;

(III) €10,000 in respect of a van made available in the period 1 January 2025 to 31 December 2025.”.

10. Amendment of section 472BB of Principal Act (sea-going naval personnel credit)

10. Section 472BB of the Principal Act is amended in subsection (3)—

(a) by the substitution of “2021 or 2022” for “2021”, and

(b) by the substitution, in paragraph (a), of “credit of €1,500 in relation to that year of assessment” for “credit of €1,500”.

11. Amendment of Schedule 13 to Principal Act (accountable persons for purposes of Chapter 1 of Part 18)

11. Schedule 13 to the Principal Act is amended—

(a) by the deletion of paragraphs 56 and 122,

(b) by the insertion of the following paragraph after paragraph 204:

“205. Data Protection Commission.”,

and

(c) by the substitution—

(i) in paragraph 39, of “Rásaíocht Con Éireann” for “Bord na gCon”, and

(ii) in paragraph 179, of “Office of the Financial Services and Pensions Ombudsman” for “Financial Services Ombudsman’s Bureau”.

12. Retirement benefits: amendment of death-in-service provision

12. Section 772 of the Principal Act is amended—

(a) in subsection (3), by the substitution of the following paragraph for paragraph (b):

“(b) that any pension or benefit for any widow, widower, surviving civil partner, children or dependants, or children of the surviving civil partner, of an employee who dies before retirement shall be provided for as either—

(i) a pension or pensions payable on the employee’s death of an amount that does not or, as the case may be, do not in aggregate exceed any pension or pensions which, consonant with the condition in paragraph (a), could have been provided for the employee on retirement on attaining the specified age, if the employee had continued to serve until the employee attained that age at an annual rate of remuneration equal to the employee’s final remuneration, or