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New Tax Rates: How Irish Budget 2024 Affects Local Businesses

budget 2024

On October 10, 2023, the Irish government unveiled its highly anticipated Budget 2024, a comprehensive €14 billion package aimed at tackling the cost of living crisis and making substantial investments in critical areas such as health, education, and housing. This budget has generated widespread interest and discussion due to its potential impact on the lives of Irish citizens. In this blog post, we’ll delve into the key highlights of Budget 2024 Ireland and focus on what will change for Irish business.

Irish Budget 2022 – Changes in Taxation for Businesses

Budget 2024 also includes significant tax cuts aimed at putting more money in the pockets of Irish workers. Here are the anticipated changes for Irish businesses

Universal Social Charge

The USC will be reduced from 4.5% to 4%, providing tax relief for many taxpayers. For more information on upcoming changes in USC rates and bands find in table below.

2023Rate (%)2024Rate (%)
Income up to €12,012.000.5Income up to €12,012.000.5
Income from €12,012.01 to €22,920.002.0Income from €12,012.01 to €25,760.002.0
Income from €22,920.01 to €70,044.004.5Income from €25,760.01 to €70,044.00 4
Income above €70,044.008Income above €70,044.008
USC Tax Rates and Bands

Personal Income: Budget 2024 introduces a higher income tax threshold. The point at which workers start paying the top rate of tax (40%) will be increased to €42,000, offering a reprieve to middle-income earners.

Corporation Tax (CT)

Under the transposition of the EU Minimum Tax Directive, from 31 December 2023 in-scope businesses will pay a minimum effective tax rate of 15% on their profits in respect of each country in which they operate. This will apply to both multinational and domestic businesses with a global annual turnover of €750 million and above in at least two of the preceding four years. 

R&D Tax Credit
R&D tax credit means that businesses that invest in qualified research & development activities to drive innovation and growth may be eligible for certain tax reliefs.

There are a number of amendments to the R&D tac introduced in Budget 2024.

• An increase in the rate from 25% to 30%.

• An increase from €25,000 to €50,000 in the amount of the credit payable in Year One.

Capital Gains Tax (CGT) 

Angel Investor Relief CGT relief will be introduced for third-party individuals who take significant minority shareholdings in innovative start-up companies for at least 3 years. These individuals can avail of an effective reduced rate of CGT of 16%, or 18% for partnerships. The relief can be applied on a gain of up to twice the value of their initial investment and is subject to a lifetime limit of €3 million.

Retirement Relief 

Retirement relief is a relief on Capital Gains Tax (CGT) when disposing of any part of your business or farming assets. The following changes will come into effect for disposals made on or after 1 January 2025:

 • The upper age limit which applies to the maximum level of retirement relief will be extended from 66 to 70, in respect of both a disposal to a child and a disposal to a person other than a child.

 • A new threshold will limit the availability of the relief on disposals to a child by individuals from the age of 55 until the age 70 to assets with a value of €10 million or less. A further amendment will require that retirement relief must be claimed by an individual on their tax return.

VAT

Budget 2024 introduces several significant changes to how business register, collect, and pay VAT. Refer to the tables below for more detailed information:

SubjectRate Date
Gas and electricity supplies9%Until 31 October 2024
Supply and installation of solar panels on school buildings will be reducedreduced to 0%from 1 January 2024
Supply of electronic books and audio booksreduced to 0%from 1 January 2024
Flat-rate addition for farmersReduced to 4.8%from 1 January 2024
VAT tax rate changes and effective dates

VAT Registration Thresholds:

With effect from 1 January 2024, the turnover thresholds beyond which suppliers are obliged to register for VAT will rise.

New ThresholdPrevious Threshold
Supplier of goods€80,000€75,000
Supplier of services (or mixed supplies)€40,000€37,500
New VAT thresholds

Sectors That Will Receive Most Funding in 2024

To address long-term challenges and strengthen the nation’s foundations, Budget 2024 allocates substantial funds to crucial sectors like Housing, Education, Social Protection, etc.

Other significant investment venues include Environment with an investment of €1.4 billion, Agriculture, Food and the Marine – €1.94bn, Justice –  €3.54bn, and Transport – €3.56 bn. Besides, €9m will be issued to Local Enterprise Offices to help businesses with green journeys and digital transformation. 

Measures to Addresses the Rising Cost of Living and Support Underpaid Citizens

One of the most pressing concerns for many Irish households has been the rising cost of living. In response, Budget 2024 introduces several measures to provide much-needed relief:

Jobseeker’s Payments: The maximum weekly rate of jobseeker’s payments will see a €12 increase, offering additional support to those seeking employment during these challenging times.

Qualified Child Payments: Weekly rates for qualified child payments will receive a boost of €4, lightening the financial burden on families caring for children.

Cost of Living Lump Sum: A €100 cost of living lump sum payment will be issued to individuals receiving an Increase for a Qualified Child, assisting them in managing their daily expenses.

Christmas and January Bonuses: Long-term jobseeker payment recipients will benefit from both a Christmas Bonus and a January cost of living bonus, ensuring some extra financial security during the festive season and beyond.

Public Reception and Critique

Budget 2024 Ireland has garnered mixed reviews from various quarters. Many commentators have praised the government for its focus on addressing the cost of living crisis and its substantial investments in key areas. These measures are seen as essential steps towards improving the lives of Irish citizens and strengthening the nation’s infrastructure.

However, some critics argue that the budget may not go far enough to help those who are most vulnerable or that further action is required to address specific issues such as housing affordability or environmental sustainability.

To Sum Up

In summary, Budget 2024 Ireland is a substantial and ambitious package of measures designed to tackle the multifaceted challenges facing the nation. It addresses the pressing issue of the cost of living while making strategic investments in healthcare, education, housing, and climate action. While the budget has garnered both praise and critique, its ultimate impact on Irish society will become evident in the coming years as these measures are implemented and evaluated.

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