Exploring what it means for you - PwC

Agenda• PRSI changes• Pension changes• Local property tax• Other measures• Capital taxes• Wrap upBudget 2013PwCDecember 2012Slide 3

Case study• Salary - €50,000 p.a.• Pay review from 1 Jan 2013 +1%• Gross increase €500• Net increase (after tax) €240• Additional PRSI from 1 Jan 2013 €264Result: Employee gets no benefit from the pay increase!Budget 2013PwCDecember 2012Slide 6

PRSI – Where does Ireland stand?75%70%65%60%55%50%45%40%35%30%25%20%15%10%5%0%Single: Euro 75,000Canada Switz USA IRL (Pre) IRL(Post)Australia Spain UK Germany Portugal Greece Italy FranceEmployer Social SecurityEmployee Social SecurityBudget 2013PwC* Figures prepared using the PwC GlobalsourcePlus Single Year Tax CalculatorDecember 2012Slide 7

PRSI – Where does Ireland stand?75%70%65%60%55%50%45%40%35%30%25%20%15%10%5%Married 2 children: Euro 175,0000%Canada USA Spain Switz Germany Australia IRL (Pre) IRL UK Greece Portugal Italy France(Post)Employers Social Security Employees Social SecurityBudget 2013PwC* Figures prepared using the PwC GlobalsourcePlus Single Year Tax CalculatorDecember 2012Slide 8

Pensions– A changing environment• Tax relief on pension savings reduced• Impact of pensions cap• State pension age set to increase from 2028• Approved Retirement Fund (ARF) regimeBudget 2013PwCDecember 2012Slide 9

Pensions– Budget changes• Tax efficient pension funding for a max pension of €60k p.a.• Marginal tax relief to continue• Pension levy to expire in June 2014• Early access to AVCs• Consultation periodBudget 2013PwCDecember 2012Slide 10

Pension challenges for employers and employees• What do employees want?• What will employers do?Budget 2013PwCDecember 2012Slide 11

Local property taxCurrentpositionPrincipalprivateresidenceInvestmentPropertyPost Budget2013Stamp duty √ √ √HouseholdCharge√ √ √Non PPR Charge X √ √(2013)Capital Gains Tax X √ √Interest reliefExpires 31 Dec2017Max 75%No changeBudget 2013PwCDecember 2012Slide 12

Local property tax• Rates• Bands• Effective date• Valuation• Collection & enforcementBudget 2013PwCDecember 2012Slide 13

Case studiesProperty value Band Tax (full year)€355,000 €350k-€400k €675€395,000 €350k-€400k €675€405,000 €400k-€450k €765€1,200,000 n/a €2,300Budget 2013PwCDecember 2012Slide 14

Capital taxesCurrent rate New rate Effective dateDIRT 30% 33% 1/01/2013CGT 30% 33% 6/12/2012CAT 30% 33% 6/12/2012CAT thresholds reducing by 10% 6/12/2012Budget 2013PwCDecember 2012Slide 15

Wrap upWhere would youwant to live......if tax was theonly thing youthought about?45.79%48.51%Italy43.76%38.08%Germany30.74%39.43%UK32.17%36.03%US37.51%43.30%Ireland13.52%16.01%SwitzerlandBudget 2013PwCDecember 2012Slide 17