The standard rate of VAT will be decreased from 23% to 21% for the period 1 September 2020 to 28 February 2021.
The standard rate applies to some 53% of activity, including the supply of cars, petrol, diesel, alcohol, tobacco, electrical equipment and adult clothes and footwear.
The July Jobs Stimulus Plan announced by the Government contains a suite of tax, loan and expenditure measures designed to directly support business at all levels of the economy that are negatively impacted by Covid-19.
The Stimulus is the next stage in Ireland’s response to the COVID-19 crisis and will help ensure Ireland’s businesses get back on their feet and as many people as possible can return to work as and when it is safe to do so.
The Stimulus Plan includes a number of fiscal measures which have been set out in the Financial Provisions (Covid-19) (No.2) Bill 2020, due to be published shortly and to be considered by the Oireachtas next week.
The Bill will provide for the introduction of the Employment Wage Subsidy Scheme (EWSS); an enterprise support to employers that will focus primarily on business eligibility, delivering a per-head subsidy on a flat rate basis. This Scheme will replace the Temporary Wage Subsidy Scheme from the 1st of September. Both schemes will run in parallel from July 31st until the TWSS concludes at the end of August to provide additional flexibility to employers with new hires and seasonal workers who were not previously eligible to be paid via TWSS and who may now qualify for EWSS.
The Tax measures to be included in the draft Bill are:
- A Stay and Spend incentive for the accommodation and food sector, the purpose of which is to boost out-of-season demand for these important activities;
- Enhanced corporate tax loss relief to provide additional liquidity supports for businesses;
- Income tax relief for self-employed individuals to provide liquidity;
- Temporary reduction in the standard rate of VAT from 23% to 21%.
- Enhancements to the Help to Buy Scheme for the remainder of 2020;
- Amendments to the ‘Cycle To Work Scheme’;
- Legislative basis for the warehousing of tax liabilities; and
- Reduction in the interest rate applying to agreed repayments of all tax debt
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