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Ireland Publishes Budget 2023 Tax Strategy Group Papers — Orbitax Tax News & Alerts

Ireland's Department of Finance has published the Budget 2023 Tax Strategy Group papers, which provide an overview of issues and related developments, as well as options for certain measures for consideration while drafting the budget. The papers are summarized as follows:

Economic Context for Taxation Policy (TSG 22/01)

This paper discusses the economic and fiscal context within which the taxation system operates following the recent pandemic and in light of the current cost of living increases, including future challenges. This paper also discusses recent trends in taxation and Ireland's taxation system in an international context.

Income Tax (TSG 22/02)

Issues covered in this paper include a summary of tax yields, information on the distribution and burden of income tax and USC, and provides an update on relevant reviews including the reduced rate of USC for medical card holders, Flat Rate Expenses, Trans- Border Workers, and the Key Employee Engagement Programme (KEEP). The paper also considers options around indexation and a potential third intermediate rate of income tax at a rate of 30%.

Corporation Tax (TSG 22/03)

The Corporation Tax paper contains an overview of trends in Corporation Tax receipts and the strong performance of Corporation Tax over the previous two years. It also refers to consideration of Ireland's position in the ongoing debate on international tax reform, the progress and potential implications of Pillars One and Two, and OECD and EU tax developments. In this respect it is noted that the introduction of the GloBE rules is currently planned for Finance Bill 2023 (2024 Budget). Other items discussed include reviews of film relief credit, Research and Development credit and the Knowledge Development Box.

Property Related Tax Issues (TSG 22/04)

The Property paper discusses the Living City initiative, a review of the 2017 Report of the Working Group on the Tax and Fiscal Treatment of Rental Accommodation Providers, and the Help to Buy Scheme. Other items discussed include the Local Property Tax, collecting information on Vacant Properties, and the Residential Zoned Land Tax.

Social Protection Package – Budget 2022 Issues (TSG 22/05)

The Department of Social Protection (DSP) presented this paper which describes the overall DSP expenditure in its various programmes and discusses the impact of potential cost of living measures and social welfare for Budget 2022. This paper also looks at Poverty Trends in Ireland, Irish Labour Market Trends and Pay Related Social Insurance (PRSI).

Climate Action and Tax (TSG 22/06)

This paper gives an overview of Energy taxes, and related EU developments, Carbon Tax, and Motor Vehicle Taxes, and includes consideration of relevant policy options and challenges.

General Excise Paper (TSG 22/08)

The General Excise Paper covers a number of topics including the Alcohol Products Tax, the Tobacco Products Tax and Betting Tax. The paper outlines the Public Health Policy and the recent changes to the rates, yield and consumption. It also covers the effects of cross-border trade and the illicit tobacco market.

Value Added Tax (TSG 22/07)

Value-Added Tax (VAT) paper reviews the rates and structures of VAT. The paper also provides options for change and looks at VAT developments at the EU and domestic level. Amongst other items discussed are the VAT rates on items such as Building Supplies, Medicines, Tourism and Electricity & Gas.

Capital & Savings Taxes and Stamp Duty (TSG 22/09)

The paper provides an overview of the current position on Capital Gains Tax, Capital Acquisitions Tax, Deposit Interest Retention Tax (DIRT) and Stamp Duty, whilst considering potential options for Budget 2023.

Response to Covid – Support Schemes (TSG 20/10)

This paper provides a review of the roles the various Covid support schemes played during the pandemic and how they assisted the economy to rebound quickly following the easing of restrictions in early 2022. These include the Employment Wage Subsidy Scheme (EWSS), Temporary Wage Subsidy Scheme (TWSS), COVID Restrictions Support Scheme (CRSS), and Tax Debt Warehousing.