A new average income tax rate of 30% should be introduced to ease the burden on workers and a review of the tax treatment of equity compensation should be undertaken to help companies “attract and retain talent”, said said professional services firm Deloitte. says the government in its pre-budget brief.
“The marginal tax rate should be reduced from its current level of 52% and the entry point to the higher tax rate should be significantly increased,” the firm said.
Currently, a marginal tax rate of 48.5% applies to income over €36,800, rising to 52% for income over €70,044.
He also called for “improvements” to the special transferee assistance program for executives who are transferred to work in the Republic by their employers and earn €75,000 or more a year.
The Big Four firm, led by Harry Goddard, also suggested measures to deal with the cost of living crisis. These include the reintroduction of rubbish and rental charge relief, which would give a tax credit of around €80 per year, in addition to the introduction of a “flexi” home-to-work transport ticket. zero-rated” for hybrid workers in order to “accompany” them in their return. at the workplace.
In addition, he suggests “aligning” tax credits, brackets and lump sum allowances with medium-term inflation to reflect recent increases in the cost of living.
In terms of business support, Deloitte suggested a simplification of the Irish corporation tax code, in particular the relief of interest charges on debt financing and the improvement of our research and development regime. In addition, he proposed a 20% tax rate on certain dividends to entrepreneurs to “encourage business growth”.
“Degressive relief to reduce the CGT rate for entrepreneurs who remain in companies with a view to resizing their operations would be welcome. Rollover relief for people who leave the company early but ultimately reinvest some of the proceeds would be a welcome mid-term action from our perspective,” Deloitte said.
On climate change, Deloitte has recommended the introduction of a zero rate regime for VAT purposes for renewable energy projects to “ease the cash burden on energy developers”.
“Incentives for green spending should also be considered, either through super deductions or capital deductions on ‘green’ spending and would bring Irish tax policy in line with competing jurisdictions such as the Netherlands,” said added the company.
On real estate, Deloitte is proposing an extension of the exemption from stamp duty granted to real estate developers for the development of sites under certain conditions. The relief is due to expire in December. And he said the reintroduction of mortgage interest relief, alongside a rent tax credit, “would bring some relief to landlords and tenants”.
Speaking on the uncertain global fiscal and economic landscape, Deloitte’s Head of Tax Lorraine Griffin said: “While all eyes will be on the immediate changes that Budget 2023 will bring to individuals and businesses, heightened attention must be given to measures that will allow for sustainable growth in the medium and long term.