May 13, 2015 News

10 Tax reform plans from Minister Noonan

Tax Reform for SME’s

During his recent budget speech Minister Noonan announced a 10 point tax reform plan for SME’s comprised of the following:

1. Start up Exemption for Corporation Tax to be extended to allow unused relief arising in the first three years of trading, due to insufficient profits, to be carried forward.

2. Increase in minimum threshold for close company surcharge in relation to undistributed investment and rental income of a close company from €635 to €2,000. The new limit will also apply to undistributed trading or professional income of certain service companies.

3. Increase in R&D relief – first €200,000 of qualifying expenditure to qualify for relief without reference to the base year of 2003.

4. VAT threshold for cash receipts basis to increase from €1m to €1.25m from 1st May 2013.

5. Foreign Earnings Deduction for work-related travel to the BRIC countries to be extended to eight African countries including Egypt, Nigeria and Algeria.

6. Extension of the EII scheme from 2014 to 2020, subject to EU approval.

7. Extension of stock relief for farmers until 2015, subject to EU approval.

8. CGT relief for farm restructuring – a form of roll over relief where the proceeds of a disposal of farmland are re-invested in other farmland within 24 months – initial sale must be between 01.01.13 and 13.12.15 to qualify. Once again, EU approval is required.

9. Review of ‘carried interest’ in the tax code which provides for a favourable rate of CGT to apply to certain venture fund managers – it is hoped that reform in this area will help small businesses access funding.

10. Public consultation on the taxation of micro enterprises to take place with a view to reducing compliance costs. Closing date for submissions is 28.02.13.
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