Rather than announcing initiatives, my Department puts in place measures, via the Budget and Finance Bill process, to support and increase employment, among other policy objectives. As such, the information in tabular form which the Deputy is seeking is not available from my Department. The role of these measures is to encourage and assist employers in their own efforts and to provide them with practical help. Examples of such measures would include VAT.
The Finance (No. 2) Act 2011 provided for a second reduced VAT rate, of 9%, on a temporary basis in respect of certain tourism-related services and goods for the period 1 July 2011 to 31 December 2013. This was announced in the Jobs Initiative on 10 May 2011. In reducing the VAT burden on activities related to the tourism industry, the introduction of the 9% VAT rate is aimed at contributing towards boosting tourism and the creation of additional jobs in that sector. The measure was estimated to cost €120m in 2011, €350 in 2012, €350 in 2013, and €60 in 2014 and nil thereafter.
Reduction in Employer’s PRSI
In the Jobs Initiative, the lower rate of PRSI payable by employers was halved until end-2013. This applied to lower income jobs that pay up to €356 per week.
R&D Tax Credit
The Research and Development (‘R&D’) tax regime allows a tax credit of 25% on incremental R&D expenditure in addition to the normal 12.5% trading deduction. The scheme provides for expenditure on R&D that is in excess of that undertaken in the base year of 2003 to qualify for the credit. The regime has been improved in a number of ways in Finance Act 2012 and further amendments are proposed in Finance Bill 2013.
Special Assignee Relief Programme (‘SARP’)
The SARP was introduced in Finance Act 2012 and is designed to reduce the cost to employers of assigning key individuals in their companies from abroad to take up positions in the Irish based operations of their employer. This relief is targeted at individuals who are highly skilled and whose placement in Ireland could lead to additional employment in new divisions or sections of the company in which they are employed.
Foreign Earnings Deduction (‘FED’)
The FED was introduced in Finance Act 2012 to assist companies seeking to expand into emerging markets. The scheme provides a deduction from income for income tax purposes for work related travel to certain countries. Additional exports from such companies could lead to employment creation.
Employment and Investment Incentive
EII is a tax incentive which provides income tax relief for investment in certain corporate trades. Relief is initially available to an individual at 30%, with a further 11% tax relief available where it has been proven that employment levels have increased at the company at the end of the holding period or that the company spent a certain proportion of the monies raised on Research and Development. An extension of the EII for a further 7 years from 2014-2020 was announced in Budget 2013. In addition, hotels, guesthouses and self catering accommodation where they meet the conditions of the incentive will be allowed qualify on a temporary basis, to be reviewed after a period of two years
3 Year Tax Exemption for Start-up Companies
This scheme provides relief from CT on the trading income and certain gains of new start-up companies in the first 3 years of trading. It was introduced in FA (No.2) 2008 and applied to the extent that the CT liability did not extend beyond €40,000.
It has been amended and extended in Finance Act 2012 and further amendments are proposed in Finance Bill 2013
Taxation of International Financial Services
In order to retain competitiveness, Finance Act 2012 introduced a package of low-cost measures to support the continued success of the International Financial Services industry. The measures focused on improving double tax relief and reducing administrative burden. Finance Bill 2013 also contains a small number of measures to improve the competitiveness of the IFSC and assist in maintaining and growing employment in the sector.
Renewable energy generation
Finance Act 2012 extended the qualifying period for the scheme of tax relief for corporate investment in certain renewable energy projects from 31 December 2011 to 31 December 2014. The purpose of the scheme is to encourage investment in renewable energy projects and to facilitate the growth of electricity generation capacity using these sources. It applies to the following categories of technology: Solar, Wind, Hydro (including ocean, wave or tidal energy), and Biomass.
Energy-efficient equipment
Finance Bill 2012 also extended the scheme of accelerated capital allowances for expenditure by companies on certain energy-efficient equipment for a further 3 years to end-2014.
Cut in commercial Stamp Duty
Finance Bill 2012 abolished multiple Stamp Duty rates for non-residential properties, and brought in a single rate of 2% in respect of instruments executed after 6 December 2011.
Real Estate Investment Trusts
As announced in the Budget, Finance Bill 2013 will provide a new tax regime to allow for the introduction of Real Estate Investment Trust (REIT) companies in Ireland. REITs are an internationally recognised format for collective investment in rental property. It is hoped that REITs will facilitate the attraction of foreign investment capital to the Irish property market, helping to stabilise that market, and also releasing bank financing from the property market for use by other sectors of the economy. REITs also provide investors with an alternative lower-cost, lower-risk method for property investment.
Finance Bill 2013 - Other Corporation Tax measures
In addition, the Finance Bill contained further enhancements to the ‘Key Employee’ provision of the R&D Tax Credit and the Intangible Asset regime.
The Seed Capital Scheme (SCS)
An extension of the SCS for a further 7 years from 2014-2020 was also announced in Budget 2013. This scheme provides that an employee, who leaves employment and invests by means of shares in a qualifying new venture, may claim a refund of income tax paid in previous years. An unemployed person may also avail of this facility.
I would add also that, conscious of the unfair competitive advantage to be gained by those businesses that do not fulfil their tax obligations, a variety of measures have been introduced by me in recent Finance Bills to assist Revenue in counteracting shadow economy activity.
