Irish Budget 2013: Taxation Of Individuals

Author:Mr Andrew Quinn, William Fogarty, Amanda Comyn and Lynn Cramer
Profession:Maples and Calder

Important measures for international investors in Ireland and investment managers with Irish investment funds and SPVs On Wednesday 5 December 2012, the Irish Minister for Finance presented Budget 2013, the Irish government's fiscal programme of measures for the coming year, against an improving but still challenging economic backdrop. This update summarises the relevant budget measures for international investors in Ireland, domestic companies and banks and multinational corporations with operations in Ireland and investment managers and arrangers with Irish investment funds and capital markets SPVs. Taxation of Income There are no changes to the rates of income tax or the universal social charge for the vast majority of Irish taxpayers. There are a number of important changes to the Pay Related Social Insurance ("PRSI") regime which will impact on both employees and the self-employed over the next two years. From January 2013, full PRSI rate employees and public sector staff paying the modified rate will lose their weekly PRSI allowance of €127 per week. The minimum annual PRSI contribution for self employed earners will increase to €500. PRSI is being extended to unearned income of all employees from 2014 with the result that there will be PRSI on rental income, investment income, dividends and interest on savings. The rate of interest used to calculate the taxable benefit from most employment related loans will increase to 13.5%. For loans related to homes, the rate will decrease to 4%. From 1 January 2013, the rate of Deposit Interest Retention Tax ("DIRT") will be increased to 33% for interest payable at least annually and 36% for other interest. Tax relief on pension contributions will be...

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