Ireland's Economic Stimulus Response to COVID-19 - the Key Tax Measures
27 Jul 2020
As will be outlined in the upcoming Financial Provisions (COVID-19)(No.2) Bill, the stimulus package contains a number of significant tax measures:
b) There will be a reduction in the general rate of VAT from 23% to 21%. This will come into effect in September for six months, and will impact a wide range of consumers and suppliers. It may require repricing of goods or services where originally priced as VAT inclusive amounts. The change is relevant for those in the financial services sector for whom VAT is an irrecoverable cost.
d) The warehousing of tax liabilities will be placed on a statutory footing. This will allow for businesses affected by COVID-19 to delay payment of their PAYE and VAT debts in part, or in full for a set period with no interest or penalties. In addition, the interest rate applying to agreed repayments of all tax debt (where agreement has been reached prior to 30 September 2020) will be reduced to 3%.
In relation to the Budget, there is speculation that capital gains tax rates may be reduced in order to promote economic activity. In addition, it is likely that there will be further Irish tax reform arising from the international tax initiatives such as the EU Anti-Tax Avoidance Directives and the OECD BEPS project.
If you have any questions or require further information on the measures highlighted above, please contact a member of the Maples Group's Tax practice.
T: +353 1 619 2730
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Of Counsel Dublin
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