Finance (No. 2) Act 2008

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Chapter 2

Levies

Income levy.

2.— The Principal Act is amended—

(a) by inserting the following after Part 18:

“LEVIES

PART 18A

Income Levy

Definitions (Part 18A).

531A.— (1) In this Part—

‘ aggregate income ’, in relation to an individual and a year of assessment, means the aggregate of the individual’s relevant emoluments and relevant income for the year of assessment;

‘ Collector-General ’ means the Collector-General appointed under section 851;

‘ employee ’ and ‘ employer ’ have the same meanings as in section 983;

‘ excluded emoluments ’ means emoluments which have been gifted to the Minister for Finance under section 483;

‘ income levy ’ has the meaning assigned to it by section 531B;

‘ income tax month ’ means a calendar month;

‘ PAYE Regulation s’ means the Income Tax (Employments) (Consolidated) Regulations 2001 ( S.I. No. 559 of 2001 );

‘ relevant emoluments ’ and ‘relevant income’ shall be construed in accordance with paragraphs (a) and (b), respectively, of the Table to section 531B(1);

‘ similar type payments ’ means payments which are of a similar character to payments made under the Social Welfare Acts but which are made by—

(a) the Health Service Executive,

(b) the Department of Community, Rural and Gaeltacht Affairs,

(c) the Department of Enterprise, Trade and Employment,

(d) the Department of Education and Science,

(e) the Department of Agriculture, Fisheries and Food,

(f) An Foras Áiseanna Saothair, in respect of schemes mentioned in clauses (I), (II) and (III) of section 472A(1)(b)(i), or

(g) any other state or territory;

‘ social welfare payments ’ means payments made under the Social Welfare Acts;

‘ year of assessment ’ means a year of assessment within the meaning of the Tax Acts.

(2) Words and expressions used in this Part have, except where otherwise provided or where the context otherwise requires, the same meaning as in the Tax Acts.

Charge to income levy.

531B.— (1) With effect from 1 January 2009, there shall be charged, levied and paid, in accordance with the provisions of this Part, a tax to be known as ‘ income levy ’ in respect of the income specified in paragraphs (a) and (b) of the Table to this subsection.

TABLE

(a) The income described in this paragraph, to be known as ‘ rel evant emoluments ’, is emoluments to which Chapter 4 of Part 42 applies or is applied, other than social welfare payments and similar type payments and excluded emoluments.

(b) The income described in this paragraph, to be known as ‘relevant income’, is income from all sources, other than relevant emoluments, social welfare payments and similar type payments and excluded emoluments, as estimated in accordance with the Income Tax Acts and—

(i) as if sections 140, 141, 142, 143, 195, 231, 232, 233, 234 and 664 were never enacted,

(ii) without regard to any deduction—

(I) in respect of double rent allowance under section 324(2), 333(2), 345(3) or 354(3),

(II) under section 372AP, in computing the amount of a surplus or deficiency in respect of rent from any premises,

(III) under section 372AU, in computing the amount of a surplus or deficiency in respect of rent from any premises,

(IV) under section 847A, in respect of a relevant donation (within the meaning of that section), or

(V) under section 848A, in respect of a relevant donation (within the meaning of that section),

(iii) excluding gains, income or payments to which any of the following provisions apply:

(I) Chapter 4 of Part 8;

(II) Chapter 5 of Part 8;

(III) Chapter 7 of Part 8;

(IV) Chapter 5 of Part 26;

(V) Chapter 6 of Part 26;

(VI) Chapter 1A of Part 27;

(VII) Chapter 4 of Part 27,

and

(iv) having regard to a deduction for any payment to which section 1025 applies, made by an individual pursuant to a maintenance arrangement (within the meaning of that section), relating to the marriage for the benefit of the other party to the marriage, unless section 1026 applies in respect of such payment.

(2) The income levy shall not be payable, for a year of assessment, by an individual who—

(a) proves to the satisfaction of the Revenue Commissioners that his or her aggregate income for the year of assessment does not exceed €18,304,

(b) by virtue of section 45 of the Health Act 1970 or Council Regulation (EEC) No. 1408/71 ¹ of 14 June 1971 has full eligibility for services under Part IV of that Act, or

(c) following receipt of a claim made in a manner approved or provided by the Revenue Commissioners, proves to their satisfaction that his or her aggregate income for the year of assessment does not exceed €20,000 and who has achieved the age of 65 years or over at any time during that year of assessment.

Rate of charge.

531C.— For the year of assessment 2009, and for each subsequent year of assessment, an individual shall be charged to income levy on his or her aggregate income for the year of assessment at the rates specified in the Table to this section.

TABLE

Deduction and payment of income levy on relevant emoluments.

531D.— (1) An employer shall be liable in the first instance to pay income levy due in respect of any payment of relevant emoluments.

(2) (a) As respects any payment of relevant emoluments made to or on behalf of an employee on or after 1 January 2009, income levy shall be deducted from such emoluments by the employer at any or all of the rates specified in subparagraphs (i) and (ii) of paragraph (c) and for this purpose the said subparagraph (ii) shall apply as if the words ‘but does not exceed €4,810’ were deleted.

(b) As respects any payment of relevant emoluments made to or on behalf of an employee on or after the passing of the Finance (No.2) Act 2008, income levy shall be deducted from such emoluments by the employer at any or all of the rates specified in subparagraphs (i), (ii) and (iii) of paragraph (c).

(c) The rates referred to in paragraphs (a) and (b) are as follows:

(i) 1 per cent where the amount of the relevant emoluments does not exceed €1,925, in the case where the period in respect of which the payment is being made is a week, or a corresponding amount where the period is greater or less than a week,

(ii) 2 per cent on the amount of the excess where the amount of the relevant emoluments exceeds €1,925, but does not exceed €4,810, in the case where the period in respect of which the payment is being made is a week, or a corresponding amount where the period is greater or less than a week,

(iii) 3 per cent on the amount of the excess where the amount of the relevant emoluments exceeds €4,810, in the case where the period in respect of which payment is being made is a week, or a corresponding amount where the period is greater or less than a week,

and notwithstanding that the relevant emoluments are in whole or in part for some year of assessment other than that during which the payment is made.

(3) The provisions of Part 4 of the PAYE Regulations, with any necessary modifications, shall apply to income levy in respect of relevant emoluments, and income levy payable by an employee shall only be recoverable from him or her by his or her employer by deduction in accordance with those provisions.

(4) (a) (i) Within 14 days of the end of every income tax month the employer shall remit to the Collector-General the total of all amounts of income levy which the employer was liable to deduct from relevant emoluments paid by the employer during that income tax month.

(ii) The Collector-General may, in writing, and unless the employer objects, authorise the employer to remit to the Collector-General, within 14 days from the end of such longer period (if any) but not exceeding one year, as may be so authorised, the total of all amounts of income levy which the employer was liable to deduct from relevant emoluments paid by the employer during that longer period.

(iii) Where a remittance referred to in subparagraph (i) is made by such electronic means (within the meaning of section 917EA) as are approved by the Revenue Commissioners, subparagraph (i) shall apply and have effect as if ‘Within 23 days of the end of every income tax month’ were substituted for ‘Within 14 days of the end of every income tax month’ but, where the said remittance is not made within that period of 23 days, subparagraph (i) shall apply and have effect without regard to the provisions of this subparagraph.

(b) On payment of income levy, the Collector-General may furnish the employer concerned with a receipt in respect of the payment which shall consist of whichever of the following the Collector-General considers appropriate, namely—

(i) a separate receipt in respect of each such payment, or

(ii) a receipt for all such payments made within the period specified in the receipt.

(5) (a) Within 46 days from the end of a year of assessment, or from the date the employer ceases permanently to be an employer to whom Regulation 7(1) of the PAYE Regulations applies, whichever is the earlier, the employer shall send to the Collector-General—

(i) a return, in a form provided or approved of by the Revenue Commissioners, in respect of each individual to whom payment of relevant emoluments was made during that year showing—

(I) the total amount of income levy payable as respects the individual in that year,

(II) the dates of commencement and cessation within that year of the employment of the individual, where applicable,

(III) the rate of income levy payable as respects the individual, and

(IV) the total relevant emoluments paid to the individual in that year,

and

(ii) a statement, declaration and certificate, in such form as may be provided or approved of by the Revenue Commissioners, showing the total amount of income levy which the employer was liable to remit in respect of every individual to whom payment of relevant emoluments was made in the year of assessment.

(b) Where the employer is a body corporate, the declaration and certificate referred to in paragraph (a)(ii) shall be signed either by the secretary or a director of the body corporate.

(6) (a) (i) Within 46 days from the end of a year of assessment, the employer shall give to every employee who is in the employer’s employment on the last day of the year of assessment and from whose relevant emoluments any income levy has been deducted during that year, a certificate showing—

(I) the total amount of income levy deducted from the relevant emoluments of the employee during that year,

(II) the date of commencement within that year of the employment of the employee, where applicable,

(III) the rate of income levy payable as respects the employee, and

(IV) the total relevant emoluments paid to the employee in that year.

(ii) The certificate specified in subparagraph (i) shall be in such form as may be provided or approved by the Revenue Commissioners.

(b) (i) An employer shall, in the case of an employee to whom he or she makes a payment of relevant emoluments, give to the employee, on the cessation of the period of employment to which the payment of income levy in respect of the employee relates, a certificate showing—

(I) the total income levy as respects the employee which the employer was liable to remit for the year of assessment in which the cessation occurs up to and including the date of cessation,

(II) the dates of commencement (where applicable) and cessation within that year of the employment of the individual,

(III) the rate of income levy payable as respects the employee, and

(IV) the total relevant emoluments paid to the employee in that year up to and including the date of cessation.

(ii) The certificate specified in subparagraph (i) shall be in such form as may be provided or approved of by the Revenue Commissioners.

Record keeping.

531E.— (1) An employer shall record the following particulars in respect of each employee to whom payment of relevant emoluments has been made in a year of assessment—

(a) the amount of each payment of relevant emoluments,

(b) the amount of income levy deducted from each such payment,

(c) the total amount of income levy which the employer is liable to remit in respect of each such payment, and

(d) the dates of commencement and cessation within the year of assessment of the employment of the individual, where applicable.

(2) The records specified in subsection (1) shall be in a form approved of by the Revenue Commissioners and shall be retained by employers for not less than 6 years after the end of the year of assessment to which they relate.

Power of inspection.

531F.— The provisions of section 903 and Regulation 32 of the PAYE Regulations, in relation to inspection of records, with any necessary modifications, shall apply to the particulars recorded pursuant to section 531E as they apply to the records specified in those provisions.

Estimation of income levy due for income tax months and for year.

531G.— Sections 989, 990 and 990A shall apply to income levy as they apply to income tax.

Assessment, collection, payment and recovery of income levy on relevant income.

531H.— (1) Income levy payable for a year of assessment in respect of relevant income shall be assessed, charged and paid in all respects as if it was an amount of income tax assessed and charged under the Income Tax Acts, but without regard to section 1017, and may be stated in one sum (in this section referred to as the ‘aggregated sum’) with the amount of income tax contained in any computation of, or assessment or assessments to, income tax made by or on the individual by whom the income levy is payable for the year of assessment.

(2) For the purposes of subsection (1) the income levy may be so stated notwithstanding that there is no amount of income tax contained in the said computation, assessment or assessments, and all the provisions of the Income Tax Acts, other than any such provisions in so far as they relate to the granting of any allowance, deduction or relief, shall apply as if the aggregated sum were a single sum of income tax.

(3) Where income levy is payable for the year of assessment 2009 in respect of relevant income, section 958 shall apply and have effect as if, in accordance with this Part, income levy had been payable for the year of assessment 2008.

Married couples.

531I.— Where an election has been made or is deemed to have been made under section 1018 and has effect for a year of assessment, income levy payable by one spouse shall be charged, collected and recovered as if it were income levy payable by the spouse assessable under section 1017.

False statements.

531J.— The provisions of section 1056 in relation to the making of returns, declarations or statements shall apply, with any necessary modifications, in relation to income levy.

Repayments.

531K.— (1) In any case of underpayment or overpayment of income levy to the Collector-General, payment of the amount not paid or repayment of the amount overpaid, as the case may be, shall be made to or by the Collector-General, as appropriate.

(2) In the case of an individual to whom paragraph (a), (b) or (c) of section 531B(2) applies, any income levy deducted from his or her income shall be repaid to the individual by the Revenue Commissioners on receipt of a valid claim made in such manner as may be approved by the Revenue Commissioners, and for the purposes of such repayment the income levy shall be deemed to be income tax.

(3) Where, at the end of a year of assessment, married persons assessed to tax for the year of assessment under section 1017, one or both of whom have reached the age of 65 years or over at any time during the year of assessment, prove to the satisfaction of the Revenue Commissioners that their aggregate income from all sources is not in excess of twice the limit set out in section 531B(2)(c), then the Revenue Commissioners shall repay such income levy, if any, as has been deducted from that income during that year of assessment.

Restriction on deduction.

531L.— (1) Income levy paid in respect of a year of assessment is in addition to, and does not reduce, any liability which an individual may have in respect of income tax or other taxes under the Tax Acts.

(2) Excess tax credits or reliefs which are available to an individual may not be set against any charge to income levy which is due and payable for a year of assessment.

Application of provisions relating to income tax.

531M.— (1) The provisions of Chapter 1 of Part 40, in relation to appeals, shall apply to income levy as they apply to income tax.

(2) The provisions of Part 47, in relation to penalties, offences, interest and other sanctions, shall apply in relation to income levy as they apply to income tax.

(3) Section 865 shall apply to any repayment of income levy as it applies to income tax.

(4) Section 987 shall apply, with any necessary modifications, to income levy as it applies to income tax.

Care and management.

531N.— Income levy is under the care and management of the Revenue Commissioners and Part 37 shall apply to income levy as it applies to income tax.”,

(b) in section 1002, in the definition of “the Acts”, by inserting the following after paragraph (iii):

“(iiia) Part 18A,”,

(c) in section 1006, in the definition of “the Acts”, by inserting the following after paragraph (a):

“(aa) Part 18A,”,

(d) in section 1006A, in the definition of “the Acts”, by inserting the following after paragraph (a):

“(aa) Part 18A,”,

(e) in section 1078, in the definition of “the Acts”, by inserting the following after paragraph (c):

“(ca) Part 18A,”,

and

(f) in section 1079, in the definition of “the Acts”, by inserting the following after paragraph (c):

“(ca) Part 18A,”.

¹OJ No. L149, 5.7.1971, p.2