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Higher tax for overseas landlords and some new reliefs in Finance Bill

Corporate landowners who are not resident in the state will now be subject to a higher 25pc corporation tax and subject to new EU-mandated interest limitation rules.

rish resident companies are liable for 25pc corporation tax on Irish rental income, while non-resident landlords previously paid 20pc, the standard income tax rate. Both will now pay the same rate.

The introduction of a new EU interest limitation rule – which limits deductible interest expenses to 30pc of earnings before interest, taxes, depreciation, and amortization – will also apply to non-resident landlords.

The changes are among measures in the Finance Bill, which writes budget measures into law. This year’s Bill published on Thursday also includes moves to rein in ties with what the EU lists as tax havens and tax non-resident corporate landowners.

Sailors, student nurses and filmmakers are to get minor reliefs not announced in last week’s budget, while company bosses will finally be able to warehouse taxes.

“The Government wants to ease the cost of living pressures that many are feeling at present,” said the minister for finance, Paschal Donohoe.

“I am pleased therefore to be able to introduce changes to the income tax system that will benefit everyone who pays income tax.

“Budget 2022 will put the public finances on a sustainable path and meet the twin goals of investing in our future and meeting the needs of today.”

The bill, published on Thursday, extends an existing tax credit worth €1,500 for naval personnel at sea for at least 80 days on an Irish vessel.

It also includes an income tax exemption for student nurses receiving a Pandemic Placement Grant of up to €2,100.

Film producers will also be able to use a 32pc tax credit for all workers on a film set, including those that provide a “labour only” service.

The tax warehousing scheme – introduced in 2020 and allowing employers to park unpaid Vat and PAYE debts due to Covid-19 – has been extended for company directors or those who have “a material interest in the their employer company”.

They will also not be subject to interest accruing on the warehoused sum.

The finance bill also confirms that disclosure obligations for digital marketplaces such as Amazon, Airbnb or Uber will apply from 2023 to ensure they pay tax where they do business.

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