Jobs Initiative 2011

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A number of specific tax measures were included in the Jobs Initiative.  I have clarified below when some of these measures will apply to businesses.

1. Share-Based Remuneration – Employer PRSI Abolished

The charge to employer PRSI on share based remuneration, announced in the last Budget, is to be abolished with effect from 1 January 2011. 

2. New 9% VAT Rate

A new temporary second reduced rate of VAT at 9% has been introduced for a range of good and services in order to stimulate employment.  This new reduced rate of VAT will be introduced with effect from 1 July 2011 and will apply until the end of December 2013.  Revenue this evening have published a full list of the supplies of goods and services subject to the new reduced rate

3. 8.5% Rate of Employer PRSI Halved

The lower rate of employer PRSI (8.5%) is to be halved on jobs paying up to €356 per week.  This change is to take effect from 1 July next. The level of the minimum wage is to be reinstated on this date also.

This PRSI change applies to all employees earning up to this income level (and not just new employees).

The Minister also confirmed in his speech that the existing Employer Job (PRSI) Incentive Scheme is to remain in place until the end of this year. This scheme exempts employers from the liability to pay their share of PRSI for certain employees for 12 months.

4. Air Travel Tax to be Abolished

The air travel tax is to be reduced to zero. This is to take effect from a date fixed by Order and will be subject to agreement with airlines to bring in additional passenger numbers. 

Imelda Prendergast Partner - OSK Small Business Support

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