Analysis and commentary from FPM’s team of tax experts, identifying the key changes and outlining the practical implications for Irish business.
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The 2022 Irish Budget was announced yesterday, the 12 October 2021, by Finance Minister Paschal Donohue.
After a year of high spending because of Covid 19 – an estimated €48 Billion extra – the Budget 2022 for Ireland was expected to:
- Restore our Public Services
- Repair our Public Finances
- Continue the Recovery of Jobs & Economy
The Minister said, this budget is our path the future as we enter a new phase and the Government is conscious of the cost of living pressures facing people and businesses. The aim is to meet the twin goals of investing in our future and meeting the needs of today, while putting the public finances on a sustainable path.
As Ireland enters this ‘new phase’ in the pandemic recovery, will this Budget deliver the economic growth Ireland so urgently needs?
Irish Budget 2022 | The Highlights
The focus was on tackling the rising cost of living, housing and climate.
The 2022 Budget confirms an increase in the Corporation Tax rate from 12.5% to 15% for companies with revenues of €750m or more.
The Minister announced the welcomed extension of the Employment Wage Subsidy Scheme (EWSS) until the end of April 2022.
Minister Donohoe also emphasised the need to ensure people’s access to home ownership, marking it as an absolute priority. He confirmed that:
- The help-to-buy scheme will continue throughout 2022.
- A new Zoned Land Tax of 3% will be introduced to encourage the building of homes.
- The relief for pre letting expenses for landlords will be extended for a further three years to encourage landlords to return empty properties to the market.
A number of measures to help with the increase in the cost of living were announced, including:
- An increase in the minimum wage to €10.50;
- An increase in the standard rate band; and
- An increase in personal tax credits and tax relief for those working from home.
- The Corporation tax rate is set to increase to 15% for companies with revenue of at least €750m;
- The Corporation Tax relief for certain start-up companies will be extended for 5 years and amended so that companies may avail of it within their first five years of trading;
- The Employment Investment Incentive Scheme (EIIS) will be extended for three years and will be amended to make it more attractive to investors;
- A new tax credit will be available for the digital gaming sector – a refundable tax credit on corporate for spending on design and production which offers 32 per cent up to €25m per project.
- There will be an increase of almost 1,500 in the standard rate band.
- There will be an increase of €50 in the personal tax credit, employee tax credit and earned income credit.
- There will be an increase in the ceiling for the second USC rate band from €20,687 to €21,295.
- There will be an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and broadband in respect of those incurred while working from home.
- The Stock relief will continue for farmers until the end of 2024.
- The reduced VAT rate of 9% for the hospitality sector will continue until the end of August 2022.