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Budget 2016

By Administrator on October 15, 2015 in Company Law, Taxation

Entrepreneurial Action Plan

SMEs (small medium enterprises) are finally recognised as a critical factor to our economic recovery and currently account for 68% of all employment. To encourage this sector there are a number of new incentives.

  • A New Earned Income Tax Credit of €550 will apply to all who do not have access to the PAYE credit.
  • From 1 Jan 2016 a new Capital Gains tax rate of 20% on the disposal in whole or in part of a business up to a lifetime limit of €1m (saving €130,000)
  • Start up relief extended to 2018
  • Knowledge Development Box – KDB This is the first OECD compliant KDB in the world. Income that qualifies for KDB will be subject to a new reduced corporation tax of 6.25%
  • EII (Employment and Investment Incentive scheme) The amount a company can raise has increased to €5m annually subject to a max of €15m and extended to include the operation and management of nursing homes.
  • Minimum wage increases to €9.15p/h
  • Hospitality VAT rate of 9% retained
  • From 9th Dec reduced charges on electronic payments come into effect


In line with Budget 2015 they have retained and introduced a number of measures to encourage the transfer of land to the next generation.

  • Stamp Duty relief for young trained farmers extended
  • New €5,000 tax credit for 5 years €25K will be made available to farm families ”partnerships” who commit to changing ownership within a 10 year period.
  • Farmers will also qualify for the new Earned Income Tax Credit of €550
  • The high earners restriction is removed for Forestry owners who manage their plantations on a commercial basis
  • Inheritance tax: The 90% Agri relief for active farmers or to part time farmers who lease land to active farmer on long term basis is retained from 2015 budget

General Highlights

  • Home carers tax credit increases to €1,000 pa
  • USC reduced for all rates below €70,000
  • LPT revaluation date postponed from 2016 to 2019
  • Motor tax on commercial vehicles reduced. The maximum rate being reduced from €5,195 to €900 and will be based on the Gross Design Vehicle Weight
  • Inheritance tax: The parent to child threshold increases to €280,000 from 14 Oct 2015



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