Corporate taxes budget 2023

Highlights

• Key Employee Engagement Programme (KEEP)
  • KEEP has been extended until the end of 2025,
  • modified to provide for the buy-back of KEEP shares by the company from the relevant employee,
  • company (lifetime) limit for KEEP shares is being raised from €3 - €6 million.
• Section 481 Film Relief has been extended until the end of 2028.
• Research and Development Tax Credit
  • reviewed this year in order to align with new norms in international tax,
  • adjustments to the timing of the payment of the credit,
  • no changes are being made to the amount of credit that a company may earn,
  • the current system of offset against corporation tax liabilities and payment in three payable instalments is being changed to a new fixed three-year payment system.
  • company will have an option to call for payment of their eligible R&D tax credit or to request for it to be offset against other tax liabilities,
  • existing caps on the payable element of the credit are being removed,
  • first €25,000 of a claim will now be payable in the first year,
  • Transitional measures will be in place for one year for companies that are already engaged in research & development activities.
• Knowledge Development Box (KDB)
  • reviewed this year in order to align with new norms in international tax,
  • KDB has been extended for 4 years,
  • increase in the effective rate of the KDB to 10% to be introduced,
  • subject to Ministerial commencement order once agreement is reached at the OECD/G20 Inclusive Framework on STTR implementation.
• Bank levy – extended to end of 2023.
• Small Benefit Exemption (vouchers to employees) - increase in the limit from €500 to €1,000 and an increase in the number of benefits in a year that an employer can give from one to two per year.
• Extension of Residential Development Stamp Duty Refund Scheme to end-2025
  • must commence construction from 31 December 2022 to 31 December 2025,
  • a refund scheme whereby a portion of the stamp duty paid on the acquisition of non-residential land is refunded where that land is subsequently developed for residential purposes. The net minimum stamp duty payable after a refund is 2%.
• Introduction of Temporary Business Energy Support Scheme (“TBESS”)
  • TBESS to assist businesses with energy cost over the winter months
  • Will be open to businesses:
    • Carrying on Case I trades
    • That are tax compliant, and
    • That have experienced a significant increase in their natural gas and electricity costs
  • To be administered by Revenue on a self-assessment basis
  • Businesses will be required to register and to make claims within required time limits
  • Operates by comparing average unit price for the relevant bill period in 2022 with that in 2021 corresponding period
  • If increase in average unit price is > 50%, the business would be eligible for support
  • The support will be calculated on the basis of 40% of the amount of the increase in the bill amount
  • A monthly cap of €10,000 per trade will apply and an overall cap will also apply
  • TBESS is designed to be compliant with the EU State Aid Temporary Crisis Framework and will need EU Commission approval