Tax Credits, Reliefs and Rates for the Tax Years 2018 and 2017
The following is a summary of Budget 2018 and is not intended to be a comprehensive guide. Simply click on the section in the table below for more details.
Observations at a Glance
|1||Tax Rates / Credits||Earner Income tax credit increased to €1,150 from 900 pa.Increase in Home carers tax credit to €1,200 from €1,100|
|2||PRSI / USC rates||Decrease in some USC rates / bands|
|3||Personal Tax||Increase in standard tax band to €34,350 from €33,800|
|4||Business Tax||9% VAT rate retained. VAT Sun beds increased to 23% from 13.5%|
|5||Capital Taxes||CGT relief period reduced from 7 years to 4 years|
|6||Property Taxes||Increase in stamp duty rate to 6% for non-residential (commercial property / transitions) from midnight 10th October 2017.|
|7||Indirect Taxes||Increases of €0.50c in pk 20 Cigs & prorata for other Tobacco products. Sugar tax introduced.|
|8||Pensions||No measures announced in private pensions|
|9||Social Welfare||Increases of €5 pw in all Social Welfare benefits / pension from March 2018 plus 85% bonus Christmas 2017.|
1. Rates / Credits
|Personal Tax Credits||
|Married / Civil Partnership||
|Additional one-parent family||
|Age credit -Single||
|Non PAYE earners tax credit||
|Under age 55 single persons||
|Under age 55 married / civil partnership||
|Over age 55 single persons||
|Over age 55 married / civil partnership||
|Married / civil partnership (both blind)||
|Widowed additional credit||
|Widowed person bereaved in year assessment||
|1st year after year of bereavement||
|2nd year after year of bereavement||
|3rd year after year of bereavement||
|4th year after year of bereavement||
|5th year after year of bereavement||
|Exemptions limits 65- years and over|
|Single / widowed/surviving civil partner||
|Married / civil partnership||
|Standard Rate Bands|
|Single / widowed/surviving civil partner||
|Married couples, one income||
|Married couples, two incomes||
|One parent / widowed parent||
2. PRSI / USC Rates
|Employee PRSI exemption||
|Employee PRSI rate||
|Employer PRSI (higher rate)||
|Employer PRSI (lower rate)||
|Self employed ceiling||
|Self employed minimum contribution||
|Self employed PRSI rate||
|Universal Social Charge (USC)|
|Band 1 (0- 12,012) for 2018||
|Band 2 (12,013 – 19,372) for 2018||
|Band 3 (19,373 – 70,044) for 2018||
|Incomes in excess of €70,044||
|Self employed income >100,000||
|Aged 70 and over & medical card holders Income less than €60K||
1% / 3%
|1% / 3%|
3. Personal Tax
Standard Rate Band: Stand tax band increased to €34,250 (from €33,800). Rate remains at 20%.
Top Rate of Income Tax: No changes. Rate remains at 40%.
Earners tax credit: Tax credit increased from €900 to €1,050 pa for earned income (self-employed, company directors).
Key Employee share option scheme (KEEP): A new share option scheme for unquoted SMEs subject to EU approval. Any gain in period 1 Jan 2018 to 31 Dec 2023 will be exempt from income tax, USC and PRSI provided certain conditions are met. Any gain on subsequent sale of shares will be subject to CGT tax in normal way.
Benefit in Kind (BIK): No taxable benefit will arise where employer provides ‘electric car or van’ to employee or director during 2018. Also the providing electric charging points on site to employees or directors will not give rise to taxable benefit.
Universal Social Charge (USC):
- Rate band 2 reduced by 0.5% to 2% and rate band 3 reduced by 0.25% to 4.75%
- Rate 2 band increased from €18,772 to €19,372
PRSI: No changes.
Mortgage interest relief (TRS): Relief extended to existing recipients for further 3 years on tapered basis.
Rental Income: Introduction of claim to pre-letting expenses for 12 months prior to letting of residential properties
4. Business Tax
Value Added Tax (VAT): 9% (hospitality / tourism) VAT rate extended. VAT Sun beds increased from 13.5% to 23%
Corporation tax: 12.5% rate retained. Accelerated Capital allowances for energy-efficient equipment & cap of 80% will apply in respect of capital allowances for an intangible asset from 11th October 2017.
Farming, Agri & Fishing Sector: Introduction of BREXIT funding scheme for all SMEs.
5. Capital Taxes
Stamp duty: Increase in stamp duty rate from 2% to 6% for non-residential (commercial property / transactions) from midnight 10th October 2017.
A stamp duty refund scheme will be introduced in relation to commercial land purchased in the development of housing. Developers must commence work within 30 months of land purchase.
Consanguinity relief and agricultural property to remain at 1% in respect of transfer between certain blood relatives.
Capital Gains Tax (CGT): 7 year-period reduced to 4 years for enjoyment of full relief from CGT for residential properties
Capital Acquisitions Tax (CAT): No changes announced
6. Property / housing
- Increase in stamp duty rate from 2% to 6% for Commercial property transactions from midnight
- Vacant site levy to be increased from 3% in first year to 7% in second and subsequent years
- Reduction in 7 year period to 4 years for full relief from CGT tax for sale residential properties
- Introduction of pre-letting expenses for 12 months prior to letting of residential properties
- €750m in loans to be made available for commercial investment in housing finance
- 4,000 new social housing to be built in 2018
7. Indirect Taxes
Alcohol: No changes announced.
Tobacco: Increase of 50c on a packet of 20 cigarettes from midnight with pro rata increase on other tobacco products.
Auto Diesel, Petrol, Home Heating oil: No increases.
Carbon Tax: No changes announced
Sugar tax: Sugar -sweetened tax to be introduced by from April 2018.
Increase of 0.30c per litre of tax on drinks over 8g of sugar per 100ml.
Reduction of 0.20c per litre of tax on drinks with between 5g and 8g of sugar per 100ml.
Tax relief for pension contributions: Remains at marginal tax rate.
9. Social Welfare
- Increase in ALL benefits / state pensions of €5 per week from March 2018.
- Christmas bonus of 85% of benefits to be paid this Christmas to all Social Welfare recipients.
- Increase of €20 per week for One Parent family and Job Seekers Transitional scheme
- Increase of €10 per week for Family Income Supplement for family with 3 children / Increase €2 week in qualified child payment
- Reduction to €2 per item (from €2.50) for prescription charges for medical card holders under age 70
- €25 cap on prescription charges for under age 70 to be reduced to €20.
- Drugs Payment Scheme threshold to be reduced to €134 from €144 per month