As always the Finance Bill, which was published today, contains a number of measures that were not announced in the Budget speech of the Minster for Finance. Here are some of them:
Employees of health insurance companies who get free or reduced cost health/dental insurance policies from their employers will have to pay tax on the benefits, which the Finance Bill 2017 proposes to treat as "emoluments of employment".
A technical amendment to the Tax Consolidation Act specifies the value of tax credits cannot exceed the value of tax due. So the State does not end up losing money.
Payments under the OPW voluntary homeowners relocation scheme – which provides financial support for people to move from houses in areas prone to flooding and build new ones on land that does not flood – are to be exempt from Capital Gains Tax.
An update of PAYE legislation will "clarify the manner in which a tax liability is to be calculated where it has been identified that a payment has been made to an employee without the operation of PAYE".
This is to clamp down on employers who do not declare employees for PAYE.
To discourage employers, the measure will provide for the money they pay to staff to be treated as if PAYE had been deducted and allow for the payment to be re-grossed "to calculate the amount of income tax, USC and PRSI due".
A provision for accelerated capital allowances for energy efficient equipment – designed to improve energy efficiency among companies and sole traders (as part of efforts to met climate change requirements) – is to be extended for a further three years (to 2020). It was originally supposed to end in December.
The Knowledge Development Box regime had a loophole in it; currently the legislation restricts the amount of relief that can be offset against other income, but it does not restrict the amount of loss that can be carried forward into other tax years.
The Finance Bill bill restricts the amount of loss that can be carried forward.
The Finance Bill includes a provision to give legal effect to the OECD BEPS Multilateral Instrument, which will update all of Ireland’s existing tax treaties in one go to bring them into line with the OECD’s anti-Base Erosion and Profit Shifting recommendations.
The Finance Bill legislates to ensure the Revenue Commissioners are compliant with the General Data Protection Regulation.
Section 48 makes changes to the VRT regime for taxing cars and commercial vehicles.
It amends the definition of category A and B vehicles to "more accurately differentiate between private passenger cars and commercial vehicles".
It also ensures that the amount of VRT repaid under the Export Repayment Scheme cannot exceed the amount of VRT originally paid on the vehicle.
As well as the much publicised change to the Stamp Duty regime in favour of farmers, the Finance Bill also includes an update to the stamp duty exception for the transfer of agricultural land to young farmers.
The bill makes it a legal requirement for beneficiaries of the exemption to submit a business plan for the farm to Teagasc.
It also includes a related stamp duty exception for 'Young Trained Farmers' leasing land that has not been commenced (since 1999) because of "Taxpayer Confidentiality" laws in Ireland.
Under EU law, recipients of "State Aid" must be included on a publicly available register operated by the European Commission.
A similar problem is being rectified in relation to Capital Gains Tax relief for the restructuring of farms where the first transaction takes place by the end of 2019.
The annual tax return form is being changed so farmers availing of the relief can include it on the return, so the information can be collated and sent to Brussels.
There are also a number of loopholes to avoid tax being closed off.
The Finance Act of 2015 introduced measures to limit CGT avoidance by non-residents, where large amounts of money (cash) were transferred to a company before its sale, so as to tip its capital balance from property assets to capital assets, and so avoid CGT.
Revenue believe this limitation is being gotten around by using non-cash financial assets to stuff the balance sheet of the company prior to sale, so the bill makes changes to stop this happening.
It also introduces changes to the regime governing the tax deduction of interest paid by companies on loans used to acquire a shareholding an in Irish rental income company, a trading company or the holding company of such companies.
The Finance Bill has a number of targeted anti avoidance rules to "ensure that the interest relief is only available where loans are used for legitimate purposes".
And it makes changes to Section 110 of the Tax Consolidation Act to include "shares that derive their value from Irish Land" in the definition of specified mortgages.
Last year’s Finance Bill brought in changes to restrict the ways international investors can reduce their tax liabilities on Irish property transactions – the so called section 110 companies.
This year’s bill updates those measures by including within the definition of a specified mortgage shares that derive their value from Irish Land.
The move is being undertaken to "prevent any misuse of the section and the erosion of the Irish Tax Base".
Finally, provision is being made to define the term "receptacle" to permit and facilitate Revenue Officers to search receptacles used by persons in the course of selling illegal tobacco products.