Budget 2006
Budget 2006 Documents
Click here to view the Financial Statement.
Click here to view the Summary of Budget Measures.
Click here to view the Financial Resolutions.
Click here to view Annex A (Details of Tax Changes).
Click here to view Annex A (Tables).
Click here to view Annex A (Average Tax Rates).
Click here to view Annex A (Distribution of Income).
Click here to view Annex A (Illustrative Cases).
Click here to view Annex B (Income Tax Measures – Poverty Proofing).
Click here to view Annex C (Social Welfare/Health Rate Increases).
Click here to view Annex D (Multi-Annual Capital Investment Framework 2006-2010).
Click here to view the Budget Tables.
Click here to view the National Accounts Classification of Budget.
Click here to view the National Accounts Tables.
Click here to view Stability Programme.
Click here to view the Estimate Tables of Receipts and Expenditure for the year ending 31/12/’06.
Click here to view Explanatory Notes of the Estimates of Receipts and Expenditure for the year ending 31/12/’06.
Click here to view the Revenue: Examples of Restriction in Reliefs.
Click here to view the Revenue: Table Reflecting the Application of the Restriction in Reliefs.
Full list of measures here on the Department of Finance website.
Click here to view the Budget 2006 edition of TaxFax.
Click here to view the financial instruments for Budget 2006.
Click here to view the ITI guide explaining the main changes contained in Budget 2006.
Click here to view the ITI guide explaining the main changes contained in Budget 2006.
Budget 2006 Effects
Income Tax
- Employee Tax Credit to be increased by €220 to €1,490.
- Personal Credits increased by €50 (single) / €100 (married) to €1630 (single) / €3,260 (married).
- Single Standard Rate Band increased to €32,000 per year.
- Married, One Income, Standard Rate Band increased to €41,000 per year.
- Married, Two Incomes, Standard Rate Band increased to €64,000 per year.
- Lone Parent / Widowed Parent Standard Rate Band increased to €36,000 per year.
- Threshold for 2% health levy to be increased to €440 per week.
- Age tax exemption limit increased to €17,000 (single) / €34,000 (married).
- Age Tax Credit increased to €250 (single) / €500 (married).
- Blind Person's Tax Credit - €1,500 (single) / €3,000 (married).
- Trade Union subscription credit to be increased to €300.
- Widowed Person's Credit increased to €500.
- Tax Relief for all new loans taken out after 7 December 2005, to acquire an interest in property rental income companies is removed.
- From 1 April 2006, employers can move to quarterly filing for PAYE and PRSI, if annual payments are not more than €30000.
- The maximum amount that can be claimed under a home carer's relief is increased to €50000 per year.
- The remittance basis of taxation for employment income earned is ended, in so far as the employment is exercised in the State, for non Irish/Non ordinarily resident individuals with effect from 1 January 2006.
PRSI
- Employee PRSI Annual Ceiling will increase to €46600.
- Employee PRSI Weekly Threshold will increase to €300 per week.
Childcare
- 5 year programme to be introduced.
- Early childcare supplement €1000 per year for each child under 6 years. This is exempt from income tax and levies.
- A childminding relief is available to those minding up to 3 children in their own home, which allows for no tax to be payable on the childminding earnings, provided the amount does not exceed €10000 per year. If the amount earned exceeds €10,000 then the entire amount earned is taxable. The childminder must return their childminding income in their annual tax return.
Social Welfare
- Contributary old age pension to increase by €14 per week
- Non-contributary old age pension to increase by €16 per week
- Other social welfare rates to increase by €17 per week
- Children's allowance - first and second child to be increased to €150 per month. Third and fourth child to be increased to €185 per month.
VAT and Excise
- VAT Registration Threshold increased to €27,500 for services and €55,000 for goods.
- Betting Duty rate to be reduced to 1% from 1 July 2006.
- A VRT relief of 50% for new flexible fuel vehicles is to be introduced for a two year period from 1 January 2006.
- Reduction in home heating oil taxes by approximately 50%.
Stamp Duty
- Abolition of Companies Capital Duty will be provided for in Finance Bill 2006.
Incentives
- Urban Renewal, Rural Renewal, Town Renewal Schemes and the Special Reliefs for Hotels, Holiday Homes, Student Accommodation, High-Rise Car Parks, etc., are to be discontinued. Transition Arrangements for those projects in the pipeline; Full Relief will be available for Qualifying Expenditure up to end December 2006. The Relief declines up to end July 2008, and no relief is available after this date.
- The tax exemption for stallion and greyhound stud fees will finish on 31 July 2008. In the interim, new tax arrangements will be introduced after discussions with the EU Commissioner.
Pensions
- The annual earnings limit of €254,000 for contributions to Personal Pensions, PRSAs, and Employee Contributions to occupational pensions will be adjusted annually from the tax year 2007, in line with an earnings index.
- The maximum allowable pension fund on retirement for tax purposes will be €5,000,000 or if higher, the value of the fund on 7 December 2005. Both sums will be adjusted annually from the tax year 2007, in line with an earnings index.
- An annual income tax charge at the marginal rate will be applied on imputed distributions from any approved retirement fund, created on or after 6 April 2000. The distribution starts at 1% in 2007, increasing by 1% each year, up to 3% from 2009.
CGT
- After 7 December 2005, deferral of CGT on the sale of an asset to a spouse or former spouse, will not be allowed where the spouse acquiring the asset is not liable to Irish CGT if they dispose of the asset in the year in which they receive it.