Budget 2023 

The Minister for Finance, Paschal Donohoe T.D., and Minister for Public Expenditure and Reform, Michael McGrath T.D., yesterday presented an overall Budget package of €11 billion to address the rising cost of living facing both individuals and enterprises. A high-level summary of the budget measures is attached below, there are detailed provisions behind each measure. Please contact Helena Burke at mailto:helena.burke@gks.ie or your usual GKS contact if you would like to discuss the impact of any of these measures.

Personal Tax

  • €3,200 increase to the standard rate income tax band. The entry point to the 40% income tax rate will be €40,000 for individuals and €49,000 for married couples with one income.
  • Ceiling of the 2% USC rate will be increased from €21,295 to €22,920.
  • USC rate of 2% USC for full medical card holders and over 70 to be extended for one year.
  • Personal Tax Credit, Employee Tax Credit and Earned Income Tax Credit to be increased to €1,775 for the tax year 2023 onwards.
  • Home Carer Tax Credit will also be increased by €100 to €1,700 from 2023 onwards.
  • A new tax credit of up to €500 is being introduced for renters in the private rented sector, who are not in receipt of other State housing supports.

Business Measures

  • Employee voucher limit to double to €1,000 effective from Budget night.
  • Foreign Earnings Deduction (FED) has been extended for a further three years.
  • Special Assignee Relief Programme (SARP) has been extended for a further three years.
  • Amendments to Key Employment Engagement Programme (KEEP).
  • A Temporary Business Energy Support Scheme (TBESS) is being introduced to assist businesses with energy costs over the winter months.
  • The Government approved a Ukraine Enterprise Crisis Scheme worth €200 million for firms operating in the manufacturing and/or internationally traded services sectors.
  • Changes to the operation of the R&D Tax Credit system.
  • The Knowledge Development Box (KDB) extended for 4 years.
  • Film relief has been extended 4 to 31 December 2028.

Property

  • A new Vacant Homes Tax (VHT) which will be introduced in 2023. The tax will apply to residential properties which are occupied for less than 30 days in a 12-month period.
  • The Help to Buy Scheme, extended for two years until the end of 2024 at the current rates.
  • The pre letting expenses cap for Landlords is being increased.
  • The Residential Development Stamp Duty Refund Scheme (SDRS) has been extended.
  • The Living City Initiative (LCI) has been extended for a further five years.

Agri-taxation

  • The Young Trained Farmer and Farm Consolidation Stamp Duty Reliefs extended to 2025.
  • The Farm Restructuring CGT Relief will be extended to 31 December 2025.
  • The Young Trained Farmer and Registered Farm Partnerships Stock Reliefs will be extended to 31 December 2024.

VAT

  • 9% VAT rate for tourism and hospitality sectors will continue until 28 February 2023.
  • 9% VAT rate for gas and electricity supplies will be extended to 28 February 2023.
  • The zero rate of VAT will apply to the following supplies from 1 January 2023:
    • Newspapers and news periodicals including digital editions
    • Automatic External Defibrillators and period products
    • Non-oral Hormone Replacement Therapy
    • Non-oral Nicotine Replacement Therapy

Excise Duty

  • The temporary excise rate reductions which currently apply to Marked Gas Oil (MGO), diesel and petrol respectively, have been extended until 28 February 2023.
  • An increase of 50 cent on a pack of 20 cigarettes.

Miscellaneous

  • No changes were announced in relation to the CGT rate, CAT rate or CAT thresholds.
  • Increased Revenue compliance interventions (enquiries and audits) is to be expected.

A full transcript of the budget measures can be found at http://www.revenue.ie

A summary of the key cost of living measures can be found at Budget 2023 Cost of Living Measures