The Minister for Finance has announcd the Jobs Initiative 2011.
The main tax measures included in the Initiative are as follows:
- Enhancement of the Research and Development (R&D) Tax Credit Regime.
At present we have a tax scheme that effectiely allows 25% of a company’s incremental expenditure on qualifying R&D to be off set against the company’s corporation tax liability or paid as a credit to the company.
- PRSI on Share Based Remuneration.
The government has announced that they are going to abolish the employer PRSI on Share Based Remuneration that was announced by our last government.
- New 9% VAT Rate.
A new temporary reduced VAT rate will be introduced for certain goods and services from the 1st July 2011 to 31 December 2013.
The rate applies to the following goods and services:
- Catering and Restaurant Supplies, including vending machines and take-away food.
- Hotel Lettings, includingguesthouses, caravan parks, camping stes etc
- Cinema, theatres, certain musical performances, museums, art gallery exhibitions
- Fairgrounds or amusement park services
- The use of sporting facilities
- Printed matter such as brochures, maps, programmes, leaflets, catalogues and newspapers
- Hairdressing Services
- 8.5% Rate of Employer PRSI Halved.
- Annual 0.6% Pension Levy.
- Air Travel Tax to be abolished.
The 8.5% of Employers PRSI is to be halved on jobs paying up to €356 per week. This change is to take effect from the 1st July 2011. The level of minimum wage is to be reinstated also.
This levy is to apply to the capital value of assets under management in pension funds established in the state. The levy is to apply for a period of 4 years, commencing in 2011.
This is take effect from a date yet to be fixed and a revew of the measure will be conducted before the end of 2012 to evaluate its success.
If you have any queries regarding the new jobs initiative please feel free to contact us.