Vol. 530 No. 6
74 Mr. Howlin asked the Minister for Finance the progress made in regard to plans for the alignment of the tax year with the calendar year; the expected date of the next budget; and if he will make a statement on the matter. [4665/01]
The Finance Bill, 2001, which I published on Thursday of last week, provides the legislative basis for the alignment of the income tax year and the capital gains tax year with the calendar year with effect from 1 January 2002. The Bill also provides the legislative basis for a transitional tax period or "short tax year" running from 6 April 2001 to 31 December 2001. When the Bill is signed into law as the Finance Act, 2001, nothing further will need to be done in legislation to prepare for the first calendar tax year on 1 January, 2002. The Revenue Commissioners are making the necessary administrative preparations for the short tax year and the calendar tax year.
The Finance Bill provides that, in the short tax year, allowances, credits, reliefs, thresholds, qualifying days etc. will, in general, be reduced to 74% of their full year equivalents. The Bill makes consequential changes to the rules governing the basis of assessment of self-employed taxpayers in the context of the changeover to the calendar tax year and makes a number of changes to the rules on computation of preliminary tax in the early years of the new system.
To coincide with the move to the calendar year, the Bill also provides for a common return filing and payment deadline of 31 October for those on the self-assessment system. This means that, by that date, taxpayers will be required to have filed their tax return for the preceding tax year and paid any balance of income tax and capital gains tax for that year, having taken credit for preliminary tax already paid. They will also be required to have paid their preliminary tax for the current tax year. As usual, the Government will announce the date of the next Budget in good time.
