Budget 2010 Garvey & Co Chartered Accountants

Speech Taxes – “we have reached the limit” “Regain our competitive edge” European Commission deadline extended to 2014

Summary million Public pay1,000 Social welfare 760 Spending programmes 980 Capital 960 Others 300 TOTAL4,000

Public Pay - Basic First €30,0005% Next €40,0007.5% Next €55,00010%

Public Pay - Higher €125,000 - €165,0008% €165,000 - €200,00012% Over €200,00015%

Public Pay - Pensions New single pension scheme for new entrants Career average earnings Retirement age up to 66 Linked to increases in state pension age Considering linking to CPI rather than pay parity

Social Welfare General decreases of 4.1% Job seekers for younger hit harder –20-21 year olds €100 –22-24 year olds €150 Old age pensions exempt Child benefit €16 per month except social welfare

Other Review of local government National solidarity bond €136 million for training €70 million for flood relief Credit review system €22 million for visitor attractions Discounted rail travel and JFK project

Income Tax No changes to bands or credits New system for 2011 – universal social contribution Taxation of pension lumps sums and contributions to be reviewed Extension of mortgage interest relief High earner effective rate Irish domicile levy

Mortgage Interest Relief Abolished by 2017 Loans before 1 July 2011 get relief for 7 years Transitional measures for loans between 1 July 2011 and end of 2013

High Earners Effective rate increased from 20% to 30% Full restriction at €400,000 (currently €500,000) Some restriction from €125,000 (currently €250,000) Possible curtailment and removal of further reliefs in Finance Bill

Irish Domicile Levy Irish non-resident nationals and domiciled individuals Worldwide income exceeding €1 million Irish located capital exceeding €5 million Levy of €200,000

Corporation Tax 12.5% rate is permanent Current start up scheme extended for 2010 R&D and IP Regimes to be enhanced Capital Allowances for energy efficient equipment to be extended to new categories

VAT Standard rate back to 21% from 1 January Special schemes for second hand cars and agricultural machinery abolished (moved to margin scheme)

VRT New scrappage scheme –€1,500 relief –Over 10 years replaced by Band A or B –1 January to 31 December 2010 Existing schemes extended –Exemption for electric vehicles –€2,500 for certain hybrid vehicles –Extended to 31 December 2012

PRSI No change to rates or bands €36 million for Employers Job Incentive Scheme

Carbon Tax Net tax (maintain or reduce payroll taxes) 50% for retrofitting, also rural transport Visibility? €15 per tonne Phased

Excise Duty 12 cent per pint 14 cent per spirit measure €2.76 per bottle of spirits 60 cent per bottle of wine Other pro-rata Including VAT

Capital Taxes CAT CGT Stamp duty NO CHANGES But – NAMA windfall tax of 80%

Future Taxes Property Tax Domestic Water Charges To fund local government Review of pension treatment Review of tax shelters

Employment Subsidy Scheme Open to all sectors Competitive and oversubscribed Closing 23 December 2009 Similar conditions to phase 1 –10 or more employees –Maintain employment –No financial difficulty at 1 July 2008 –Viability plan to December 2010 and beyond

Stimulus Car scrappage Excise and VAT reductions Retrofitting Training PRSI exemption Credit review system Financial services sector – International Funds

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