The Institute of Chartered Accountants in Ireland (ICAI) observed on Thursday that the Finance Bill contains few new initiatives over those announced at Budget time, focussing instead on anti avoidance and “tidy up” measures for existing tax law.
“There will be some disappointment that measures necessary to enhance Ireland’s position as a destination for Foreign Direct Investment are not contained in the Bill," stated ICAI Director of Taxation, Brian Keegan.
"ICAI has been promoting ideas such as modernising the tax regime for the Headquarters of multinational companies. If there is to be any further innovation to our tax system in this regard we will have to wait until further amendments to the Bill are announced at Committee Stage,” he added.
Keegan continued:
“On a more positive note new VAT rules should help remove uncertainties when dealing with commercial property lettings and sales. This was a notoriously difficult area of tax law, laden with traps for the unwary. The new rules for property comprise part of a wider package of VAT reforms."
“A high proportion of this Bill deals with VAT and other indirect taxes. VAT now yields more than income tax to the Irish Exchequer, so it is particularly necessary to have up to date and fair rules,” he concluded.
Among the single biggest “new” items, in the ICAI's estimation, is the arrangement for the taxation of Petroleum Exploration and Production, introducing an effective Corporation Tax rate of up to 40%.
The Bill contains many more changes affecting the business community than will affect individual income tax payers.
Changes to tax incentives for Research and Development were confirmed in the Bill, as were the changes to stamp duties announced at Budget time.
The full text of the Irish Finance Bill can be found in the Tax-News Resources section.
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