An Oifig Buiséid Pharlaiminteach Parliamentary Budget Office Budgetary Issues in the Finance Bill 2019 - Publication 63 of 2019 - Houses of the ...
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An Oifig Buiséid Pharlaiminteach
Parliamentary Budget Office
Budgetary Issues in the Finance Bill 2019
Publication 63 of 2019
Séanadh Is í an Oifig Buiséid Pharlaiminteach (OBP) a d’ullmhaigh an doiciméad seo mar áis do Chomhaltaí Thithe an Oireachtais ina gcuid dualgas parlaiminteach. Ní bheartaítear é a bheith uileghabhálach ná críochnúil. Féadfaidh an OBP aon fhaisnéis atá ann a bhaint as nó a leasú aon tráth gan fógra roimh ré. Níl an OBP freagrach as aon tagairtí d’aon fhaisnéis atá á cothabháil ag tríú páirtithe nó naisc chuig aon fhaisnéis den sórt sin ná as ábhar aon fhaisnéise den sórt sin. Tá baill foirne an OBP ar fáil chun ábhar na bpáipéar seo a phlé le Comhaltaí agus lena gcuid foirne ach ní féidir leo dul i mbun plé leis an mórphobal nó le heagraíochtaí seachtracha. Disclaimer This document has been prepared by the Parliamentary Budget Office (PBO) for use by the Members of the Houses of the Oireachtas to aid them in their parliamentary duties. It is not intended to be either comprehensive or definitive. The PBO may remove, vary or amend any information contained therein at any time without prior notice. The PBO accepts no responsibility for any references or links to or the content of any information maintained by third parties. Staff of the PBO are available to discuss the contents of these papers with Members and their staff, but cannot enter into discussions with members of the general public or external organisations.
Budgetary Issues in the Finance Bill 2019
Introduction
1
Finance Bill 2019 gives effect to tax measures announced in Budget 2020. Generally, the Finance Bill contains
certain technical provisions that are not announced with the Budget, as these provisions are unlikely to have a
budgetary impact. However, there are additional changes (technical and non-technical) included in Finance Bill
2019 that were not announced in Budget 2020, that potentially have budgetary implications.
This Briefing Paper analyses those measures contained in Finance Bill 2019 that the PBO believes could have a
budgetary impact. While some of these measures are contained in both the Finance Bill and the Budget, others
are being presented for the first time in the Bill.
Table 1: Summary of the cost/yield of Budget 2020 revenue measures, €million
Measures Full year1 2020
Income Tax -43 -27
Corporation Tax +174 +174
Excise Duty +214.6 +174.6
Capital Taxes -11.2 -9.6
Stamp Duty +141 +141
Additional reliefs, exemptions and allowances -80 -30
Budgetary Issues in the Finance Bill 2019
(incl. measures to support SMEs, enterprise and Agri-sector)
Help-to-Buy* -40 -40
Net Total +355.4 +383
*The Department have indicated that the full cost of this measure is €100 million, with €60 million “in the tax base”.
It is important to note that, where possible, the PBO have endeavoured to provide information to assist Members to
understand the cost of a measure or a change. This information is not always available in the Budget documentation.
In particular:
n Some Budget measures were costed on aggregate.
n Some changes do not have an impact in 2020, meaning no costing information was provided.
n Some measures have the potential to have a behavioural impact, such as carbon tax or tobacco excise,
and this should be factored into the costing.
n Finally, measures which are announced only in the Finance Bill do not have costing information provided.
1 There can be a difference between the cost or yield from a budget measure in 2020 and in a ‘full year’. This happens when tax payments are
made after the year has completed or measures do not commence on 1 January (e.g. measures that are subject to a commencement order
due to the requirement to receive EU state-aid approval). Also, certain measures require an application process which may take some time
for taxpayers to become familiar with.
Budgetary Issues in the Finance Bill 2019
Measures contained in Finance Bill 2019
2
This section provides information on costing, policy background and policy implications of those measures
contained in Finance Bill 2019 which are likely to have budgetary implications. Measures that are not described
as being a ‘Budget Measure’ are those that were not announced in Budget 2020 and are instead being
introduced with Finance Bill 2019. Some of these may have been previously indicated through announcements or
public consultations.
Part 1, Chapter 2 – Universal Social Charge: Section 2
Measure: A reduced rate of Universal Social Charge (USC) applied to certain medical card holders.
Budget Measure: Yes
Description: The scheme providing a reduced rate of USC for medical card holders with an individual annual
income not greater than €60,000, would be extended by one year from 2020 to 2021.
Cost: No costing is provided for this measure, as only first (i.e. 2020) and full year costings are included in the
budget. This measure will not result in a cost (in terms of revenue foregone from Income Tax) until 2021.
Policy Background: The USC is a tax on income. It replaced the income and health levies from 1 January 2011.
USC is payable by those on incomes above €13,000 per year. Previously, this limit was €10,036 from 2012 to
Budgetary Issues in the Finance Bill 2019
2014, €12,012 in 2015, and €13,000 from 2016. Once income is over the €13,000 limit, USC is paid at the
relevant rate on all income. USC does not apply to social welfare or similar payments.
In the case of an individual whose total income in the year does not exceed €60,000 and is either (i) aged 70 or
over, or (ii) holds a full medical card, the reduced rate of USC applies to all income over €12,012. The rates apply
to each spouse or civil partner’s incomes individually. There is no aggregation. The reduced rates of USC are:
n 0.5% on the first €12,012; and,
n 2% on all income over €12,012.
Policy Impact: Although the impact is likely to be small, this measure, while progressive, does contribute to a
narrowing of the Income Tax base.
Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 3 – Income Tax: Section 3
Measure: Increase the value of the Home Carer Tax Credit.
Budget Measure: Yes
Description: The Home Carer Tax Credit will increase by €100 from €1,500 to €1,600. 3
Cost: Budget 2020 estimates that this measure will cost €8 million in a full year, and €7 million in 2020.
Policy Background: The Home Carer Credit is a tax credit given to married couples or civil partners (who are jointly
assessed for tax) where one spouse or civil partner works at home in a caring role. The total cost of the credit, in
terms of revenue foregone was €83.5 million in 2017, with 83,800 claims.
Policy Impact: While this measure increases the income of those staying at home in a caring role, it also means
that those who decide to return to the workforce will face a higher tax liability. This can reduce the incentive to return
to work and could reduce the labour market participation of second earners (who are predominantly female).
Part 1, Chapter 3 – Income Tax: Section 4
Measure: Increase in the value of the Earned Income Tax Credit.
Budget Measure: Yes
Description: The Earned Income Tax Credit will increase by €150 from €1,350 to €1,500.
Cost: Budget 2020 estimates that this measure will cost €35 million in a full year, and €20 million in 2020.
Budgetary Issues in the Finance Bill 2019
Policy Background: The Earned Income Tax credit was introduced in Budget 2017 for self-employed workers who do
not have access to the PAYE tax credit. It was initially valued at €550 which was lower than the amount available to
employees. This meant that self-employed workers paid more taxes than their PAYE counterparts earning the same
income. The Programme for a Partnership Government proposed that the Earned Income Tax Credit should increase
from €550 to €1,650 for the self-employed, to match the PAYE credit by 2018.
Policy Impact: This change reduces the difference between the Earned Income Tax Credit and the PAYE tax
credit. However, there is still a small difference between the tax paid by self-employed and PAYE workers.
Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 3 – Income Tax: Section 5
Measure: Changes to benefit-in-kind (BIK) on company cars.
Budget Measure: Yes
4 Description: The following changes will be made to the BIK regime for employer provided vehicles:
n The 0% BIK rate for company provided electric vehicles (that are worth less than €50,000) was set to expire
in 2021. This has been extended to 2022.
n From 2023 there will be a new BIK valuation regime for company cars. It will be based off kilometers
travelled and CO2 emission levels of the car.
n From 2023, BIK rates for company vans will increase from 5% to 8%.
Cost: No costing is provided for this measure. There will be no cost in 2020 as the measures will only take effect
in 2021 and 2023. However, there will be a cost to the Exchequer in terms of revenue foregone.
Policy background: Certain benefits (BIK) that are given by employers to employees (that are not salary)
may be subject to income tax. One example is vehicles that are provided by employers to employees.
In 2018 a 0% rate of BIK was applied to electric vehicles (not hybrids). This was extended for a further 3 years in
Budget 2019 for vehicles valued at €50,000 or less. The recent Budget extended this measure for another year.
The current system of vehicle BIK is based on the value of the vehicle and the annual kilometers driven. The more
kilometers one drives, the lower their tax liability will be. This creates a perverse incentive to increase mileage,
which leads to higher CO2 emissions. The new regime that will come into effect in 2023 will take environmental
costs into account. It will be based off both kilometres travelled and CO2 levels of the car.
Budgetary Issues in the Finance Bill 2019
The BIK regime for vans is different to that of cars. Currently employees are taxed 5% on the value of the van.
There is no emission or mileage criteria. This will increase to 8% in 2023 to bring it in line with the new BIK car regime.
Policy Impact: These measures may incentivise employers to purchase more environmentally-friendly vehicles for
employees. This would lead to a reduction in carbon emissions. However, the greater use of electric vehicles will likely
negatively impact on the Exchequer via lower excise receipts (e.g. carbon tax, motor tax).
Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 3 – Income Tax: Section 6
Measure: An exemption from Income Tax for compensation paid to individuals for expenses they incur in liver donation.
Budget Measure: No
Description: This would expand an existing scheme, that currently provides an income tax exemption for 5
compensatory payments made to individuals in respect of the expenses they incur when donating a kidney.
The scheme will be expanded to include the donation of a lobe of liver.
Cost: As this measure was not included in Budget 2020, no costing information has been provided.
However, there is likely to be a minor cost in terms of revenue foregone from Income Tax.
Policy background: Organ donation is governed by a European Union regulation (transposed in Irish law via Statutory
Instrument S.I. No. 325 of 2012).2 This regulation provides that organ donation should be voluntary and unpaid, but it
allows for the payment of compensation to cover relevant expenses incurred by the donor.
An exemption from Income Tax on compensatory payments made in respect of the expenses incurred by kidney donors
was introduced in Finance Act 2014. The conditions underpinning this exemption are specified by the Minister for Health
under the regulation. Generally, this compensation includes expenses relating to travel and accommodation up to a
maximum of €6,000, and loss of earnings also subject to a maximum of €6,000.
Policy Impact: The exemption, as originally introduced, aimed to ensure that donors are not penalised financially
when donating a kidney. By allowing expenses incurred to be fully reimbursable, this removes a potential barrier to
organ donation for relevant individuals.
Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 3 – Income Tax: Section 8
Measure: This measure extends the Special Assignee Relief Programme (SARP) by two years, to 31 December 2022.
Budget measure: Yes
Description: The Special Assignee Relief Programme in its current form, provides a relief from Income Tax for certain
individuals assigned to work in the State by a relevant employer, during the tax years 2012 to 2020. This scheme grants a
30% Income Tax relief on income over €75,000, subject to an upper limit of €1,000,000. Tax is paid on the portion
of income below the minimum threshold, and above the upper limit.
In addition, annual school fees up to €5,000, and expenses incurred on a single trip home per year, are not subject
to tax when they are paid for by the employer.
2 S.I. No. 325/2012 – European Union (Quality and Safety of Human Organs intended for Transplantation) Regulations 2012.
Budgetary Issues in the Finance Bill 2019
Some of the key conditions of SARP are as follows:
n a “relevant employer” is any company incorporated and tax resident in a country with which Ireland
has a double tax agreement, or a tax information exchange agreement;
n the employee is required to have been working for the company outside of Ireland for a minimum of 6 months
(or 12 months for individuals arriving between 2012 and 2014);
6
n the employee must be employed in the State for a minimum of 12 consecutive months from the date
that they take up residence in Ireland;
n the employee must not have been tax resident in Ireland for the 5 tax years preceding their arrival;
n the employee earns a minimum annual salary of €75,000, excluding bonuses, benefits and share-
based remuneration.
This measure would extend SARP by two years, until end-2022.
Cost: No costing is provided for this measure, as only first (i.e. 2020) and full year costings are included in the
budget. This measure would not result in a cost (in terms of revenue foregone) until 2021 (the first year of the
proposed extension). The latest cost information for SARP3 indicates that the amount in revenue foregone was
€28.1 million in 2017. This has increased significantly year-on-year, rising from €18.1 million in 2016, €9.5 million
in 2015, and €5.9 million in 2014.
Policy background: SARP was introduced in Finance Act 2012. Some of the more significant amendments to the
scheme include the removal of an upper income threshold of €500,000 for the years 2015 to 2018, and a reinstatement
of an upper income limit of €1,000,000 for 2019 and 2020 (for new claimants arriving on or after 1 January 2019).
Policy impact: The stated aim of SARP is to reduce the cost to employers of assigning skilled individuals in their
Budgetary Issues in the Finance Bill 2019
companies from abroad, to take up positions in the Irish-based operations of their firm (or an associated firm).
This is intended to facilitate job creation, attract and retain foreign direct investment, and promote the development
and expansion of businesses in Ireland.
A review of SARP4, conducted by Indecon and included alongside Budget 2020, found a benefit-cost ratio of
1.8. However, it should be noted that the benefits of the scheme will largely depend on the level of deadweight
it incurs (that is, the proportion of SARP claimants who might otherwise have moved to Ireland regardless of the
availability of the relief ). This is difficult to measure.
3 Report of the Office of the Revenue Commissioners, Analysis of the Special Assignee Relief Programme (SARP) 2017 included in Budget 2020, Report
on Tax Expenditures Incorporating outcomes of certain Tax Expenditure & Tax Related Reviews completed since October 2018.
4 Budget 2020, Report on Tax Expenditures Incorporating outcomes of certain Tax Expenditure & Tax Related Reviews completed since October 2018.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 3 – Income Tax: Section 9
Measure: This measure extends the Foreign Earnings Deduction by two years, to end-December 2022.
Budget Measure: Yes
Description: The Foreign Earnings Deduction (FED) provides a relief from Income Tax for individuals resident in Ireland, 7
who spend a significant amount of time working in certain other countries, on a temporary basis. The FED provides a
reduction in Income Tax liability in line with the number of days spent working in a relevant state. The maximum
deduction in any tax year is €35,000. A minimum of 30 qualifying days must be spent in a relevant state (at least three
consecutively). The relief is not available in respect of income that is also subject to certain other reliefs (such as SARP
and the R&D Tax Credit).
Cost: No costing is provided for this measure, as only first (i.e. 2020) and full year costings are included in the budget.
This measure will not result in a cost (in terms of revenue foregone) until 2021 (this first year of the proposed extension).
The latest costing information for the FED indicates that the amount in revenue foregone was €3.9 million in 2017, rising
from €3.5 million in 2016 and €3.2 million in 2015.
Policy Background: The FED was introduced in Finance Act 2012 (a similar measure had been introduced in Finance
Act 1994, but was abolished in 2003). Minor amendments have been made since. Among these was a change in the
number of consecutive days required to be spent in a relevant state, from 3 (for the years 2012 to 2014) to four (for
the years 2015 to 2020). In addition, the number of relevant states was expanded in subsequent budgets, beyond
the initial BRICS (Brazil, Russia, India, China and South Africa) to include a wider range of emerging markets.
Policy Impact: At the time of its introduction, the FED aimed to support efforts by multinational and domestic firms
to expand exports into emerging markets (specifically the BRICS). The measure was designed to incentivise employees
Budgetary Issues in the Finance Bill 2019
to travel to relevant countries in an attempt to increase the level of Irish exports to those countries. The relief was
subsequently expanded to include a broader range of emerging markets (beyond the initial BRICS).
A review of the relief in 20145 concluded that it cannot be definitively stated that the existence of the FED led to
an increase in exports to the relevant countries. However, there was a consensus among relevant stakeholders
that the FED should be enhanced to support SMEs trying to expand exports into emerging markets.
Exports are a significant contributor to Ireland’s economic growth, as a small and open economy, and Brexit
has underlined the need for the State to diversify its export base. However, an updated review of the scheme
should be considered to identify if the policy objectives are being met.
5 Budget 2015, Review of the Foreign Earnings Deduction, October 2014.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 3 – Income Tax: Section 10
Measure: These measures include several changes that expand the Key Employee Engagement Programme (KEEP).
Budget Measure: Yes
8 Description: KEEP provides an exemption from Income Tax (including USC) and PRSI for any income/gains realised
from the exercise of a qualifying share option, granted between 1 January 2018 and 1 January 2024. To qualify for KEEP,
an option must be exercised within 10 years of it being granted. Gains arising from these options are subject to Capital
Gains Tax, rather than Income Tax. The changes proposed in Finance Bill 2019 would expand KEEP in the following ways:
n KEEP would extend to companies operating through group structures. This means that employees moving
to a role in another company within the same company group, would get to retain their KEEP share options;
n KEEP would extend to part-time employees and employees with flexible working arrangements (at least 20 hours
or not less than 75% of working time, as opposed to the current specification of a minimum of 30 hours worked
per week);
n KEEP would allow existing shares to be re-used, rather than requiring the reissue of new shares when KEEP
options are exercised.
These changes need approval by the European Commission and are therefore subject to a commencement order by the
Minister.
Cost: This measure has been costed on aggregate in Budget 2020, along with a range of other supports for enterprise,
SMEs and agriculture. The combined first and full year cost of these measures is stated to be €30 million and €90.9
million respectively.
Budgetary Issues in the Finance Bill 2019
The Department has not provided information on the cost of the KEEP scheme to date. In Budget 2018 when the scheme
was introduced, the cost was stated to be €10 million in a full year. The Minister has indicated that the take-up of the
scheme was low. As the scheme is open until 2023 and the shares can be sold up to end-2033, it would be expected
that any shares granted in the early period may not be exercised until later, implying that the scheme may become
more costly over time. Further detail on the cost of the KEEP scheme would facilitate greater scrutiny.
Policy Background: KEEP was introduced in Finance Act 2017 to enable SMEs to reward certain employees in a tax
efficient way, through the granting of share options. Income gains from exercising these options (if granted between
1 January 2018 and 31 December 2023, and realised before 31 December 2033) do not count as income for Income Tax
purposes. Such income is also exempt from USC and PRSI. However, Capital Gains Tax (CGT) applies on any gains from
the disposal of the shares.
In Finance Act 2018, the value of the shares that can be granted under the KEEP was increased to 100% of a qualifying
individual’s pay in the year granted (from 50%), and the three year limit of €250,000 was changed to a lifetime limit of
€300,000.Budgetary Issues in the Finance Bill 2019
Policy Impact: It can be expected that the take-up of KEEP will increase in line with the changes included in Finance
Bill 2019. The extension of the scheme to include those with more flexible working arrangements is intended to make the
scheme more appealing to female employees. Furthermore, permitting employees to retain shares on a transfer between
companies within a group, should lead to an increase in the numbers availing of the scheme generally. Finally, allowing
existing shares to be re-used gives SMEs the flexibility to set aside pools of shares to be made available to key
employees as and when they are recruited (including those unused when an employee exits the firm). 9
Part 1, Chapter 3 – Income Tax: Section 15
Measure: Help to Buy
Budget Measure: Yes
Description: Extension of the Help to Buy scheme for a further two years to end December 2021
Cost: Budget 2020 states that the cost of extending the scheme until end December 2021 is an additional €40 million
per annum, and that €60 million per annum is “in the base”. The basis for providing the material in this way is unclear
– elsewhere in the Tax Policy Changes document, it is stated that the scheme costs €100 million per annum. Latest data
from the Revenue Commissioners from 30 September 2019 shows that the scheme has cost €215.8 million to date,
based on 14,571 approved claims.
Policy Background: The Help to Buy (HTB) scheme was initially announced in July 2016 as part of the “Rebuilding
Ireland: Action Plan for Housing and Homelessness”. Full details of the scheme were outlined in Budget 2017 which took
place in October 2016. The primary aim of the scheme was to assist first time buyers with funding the deposit required to
purchase their primary residence, or to self-build one. The scheme works as a rebate of income tax and deposit interest
Budgetary Issues in the Finance Bill 2019
retention tax paid over the previous four tax years. The maximum rebate available is 5% of the purchase price, up to a
maximum of €20,000. For transactions that took place between 19 July 2016 and 31 December 2016, the purchase price
must be less than €600,000 and for transactions that took place after 1 January 2017, the property must be worth less
than €500,000.
In order to qualify, applicants must take out a mortgage of at least 70% of the purchase price, or in the case of a
self-build, 70% of the valuation approved by the mortgage provider. At the time of the announcement of the scheme,
the requirement was 80%, which was amended during the Finance Act 2017. At the time, Budget 2017 stated that those
availing of lower loan-to-value ratios “already have sufficient resources to more than meet the deposit requirements
of the macro-prudential rules and thus are less in need of assistance from the Exchequer.”6
The other policy aim of the scheme was to encourage the building of additional residential properties. While housing
completions have increased since the introduction of the scheme7, it cannot be suggested that these are linked –
there were a number of other interventions in the housing market.
6 Budget 2017, Taxation Annexes – Summary of Budget Measures.
7 CSO New Dwellings Completion statistics show that 9,896 dwellings were completed in 2016, while 18,016 were completed in 2018, and 9,185 in the
first two quarters of 2019.Budgetary Issues in the Finance Bill 2019
Policy Impact: The Department of Finance have commissioned two independent economic assessments of the HTB
scheme, specifically an impact assessment published in October 20178 and an ex-post Cost-Benefit Analysis9 of the
incentive published in October 2018, both by Indecon International Research Economists.
In their initial impact assessment, shortly after the introduction of the scheme, Indecon noted that there was no evident
10 impact on overall prices of new homes for first-time buyers but also no significant overall impact on the level of supply.
However, Indecon suggested that the scheme could result in increased inflationary pressures on property prices,
deadweight and noted that affordability issues remain for those on lower incomes.
In the subsequent cost-benefit analysis, Indecon suggested that HTB had had a small positive net impact since its
introduction with a benefit-cost ratio of 1.28, but noted that if the price of new properties was to increase due to the
incentive, the net benefit would be reduced. Indecon’s modelling also suggested that there may have been a slight
increase in house prices due to the HTB scheme, but that the increases in the price of starter homes had been more
constrained than overall price changes.
The PBO analysed the scheme prior to Budget 202010 and noted then that 41% of approved claims were made by
households that had a loan-to-value ratio of less than 85%. This means that those households already had a deposit of
at least 10%, and this could be seen as a deadweight loss. The PBO also noted that the average HTB purchase price was
above the average price of residential properties, and approximately 21% of HTB claims were for properties priced over
€375,000, suggesting that the scheme is benefiting households at the higher end of the income distribution. In 2018,
transactions where the HTB scheme was claimed accounted for 8% of total residential sales. This was higher in certain
counties as 21% of transactions in Meath, 15% in Kildare and 13% in Wicklow claimed the HTB scheme.
The extension of the scheme could have an impact on the building choices of developers, who would have factored
in the existence or absence of HTB to their calculations on potential development profitability. A clear signal of the
Budgetary Issues in the Finance Bill 2019
intended approach to incentives should be given in order to ensure that businesses and individuals have clarity
over their potential financial choices. This is especially relevant for property incentives, as property developers
face a lag in their construction choices, and individuals are making major financial life decisions based on these.
It should be noted that no changes have been proposed to the structure of the scheme. If there was a limit on the
eligible property price under the scheme, this would limit the cost of the scheme and may focus the scheme towards
households at the lower end of the income distribution.
8 Budget 2018 – Help To Buy Independent Impact Assessment, Indecon International Research Economists.
9 Budget 2019 – Tax Expenditures Report incorporating outcomes of certain Tax Expenditure & Tax Related Reviews.
10 Parliamentary Budget Office – Overview of the Help to Buy scheme, September 2019.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 4 – Income Tax, Corporation Tax and CGT: Section 17
Measure: Living City Incentive
Budget Measure: Yes
Description: This measure extends the Living City Incentive for a further two years, without changing the operation 11
of the scheme.
Cost: No cost was given for the extension of this relief. It is unclear if this relates to the limited take-up of the incentive.
The incentive has a very small take-up at present, with less than €0.4 million claimed in 2017, with 20 claimants.
Policy Background: The Living City Initiative was first announced in Budget 2013 as a targeted regeneration relief.
Originally proposed to encourage regeneration for inner city Georgian properties in Waterford and Limerick, the incentive
was subsequently extended to Dublin, Cork, Galway and Kilkenny. The scheme was also amended to apply to all houses
constructed prior to 1915 and commercial properties within particular areas of urban deprivation in these cities.
The scheme commenced on 5th May 2015, to run for five years.
The residential element of the Living City Initiative provides for an income tax deduction over a ten-year period for
qualifying expenditure incurred on the refurbishment or conversion of certain buildings for use as a dwelling. The
commercial element of the Living City Initiative provides for capital allowances over a seven-year period in respect
of qualifying expenditure incurred on the refurbishment or conversion of a property in a Special Regeneration Area.
A review was carried out in 201611 and changes were subsequently made to the scheme in Finance Act 2016 which
extended the scheme to landlords and removed certain requirements which had limited take-up of the residential
element of the scheme.
Budgetary Issues in the Finance Bill 2019
Policy Impact: The aims of the incentive were to regenerate areas of inner cities, in order to encourage residents to move
back into these areas, and to regenerate the central business areas. It might be asked if this incentive is the best way to
encourage such aims, especially noting that the take-up for this scheme has been very minimal, with Revenue statistics
showing less than 20 claimants per annum to date.
The scheme is limited to designated areas within six cities, and a number of requests have been for extension of the
incentive to other locations or to further areas within these cities. There has been no indication of any change in this
matter.
11 Budget 2017, Tax Expenditures Report.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 4 – Income Tax, Corporation Tax and Capital Gains Tax: Section 23
Measure: Increase in the rate of Dividend Withholding Tax (DWT).
Budget Measure: Yes
12 Description: Finance Bill 2019 proposes to increase the rate of DWT by 5% to 25%, from 1 January 2020. Though not
legislated for in Finance Bill 2019, Budget 2020 also proposes to introduce a modified regime from 1 January 2021,
that would use real-time data to apply personalised rates of DWT to each tax-payer, based on their rate of PAYE.
Cost: Budget 2020 estimates that this measure will raise €80 million in 2020, and in a full-year.
Policy Background: Dividends (and certain other distributions) made by Irish resident companies are liable to
a Dividend Withholding Tax (DWT) at the standard rate of Income Tax of 20%. The amount of the tax withheld
is then transferred to the Revenue Commissioners.
DWT must be deducted at the time a distribution is made (unless the distribution is made to a non-liable individual).
There is an extensive range of exemptions granted in respect of DWT so that, in effect, DWT generally applies to
distributions made to individuals that are tax resident in Ireland, and residents in non-EU countries or countries
with which Ireland does not have a Double Tax Treaty.
Irish individual shareholders are taxable on the gross dividend at marginal tax rates but are entitled to a tax credit
for the amount in tax withheld by the distributor of the dividend.
Policy Impact: This increase aligns the amount in tax withheld by the company with the tax that is ultimately paid
by the individual tax-payer, when combining Income Tax and USC (the proposed 25% DWT rate is considered to be
a reasonable combination of the standard rate of Income Tax at 20%, and the most common USC rate of 4.5%).
Budgetary Issues in the Finance Bill 2019
This is largely a compliance measure. Given the range of exemptions for dividends paid to corporate shareholders,
the estimated increase in revenue raised will be driven by the dividends paid to individual shareholders that are subject
to DWT. However, the proposed increase in the DWT rate would not impact on the final amount of tax paid by individual
shareholders who are already tax compliant (these individuals can claim a credit equal to the amount in tax withheld by
the company, as before). Instead, additional revenue might be raised by those shareholders who are subject to the
higher rate of income tax (at 40%), but do not declare their dividend income for tax purposes.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 4 – Income Tax, Corporation Tax and CGT: Section 24
Measure: Changes to the Research and Development Tax Credit
Budget Measure: Yes
Description: A number of changes were made to the Research and Development Tax Credit for micro and small firms. 13
These firms have less than fifty employees and an annual turnover/balance sheet of less than €10 million.
n The credit will increase from 25% to 30% of qualifying R&D expenditure for micro and small companies.
n Micro and small companies will be able to claim the R&D tax credit on R&D expenditure that took place
before the company started trading.
n In addition to the changes above, the limit for third level institutions (for all companies) will rise from 5% to 15%.
n A gap in the legislation will be closed which had allowed companies to claim the R&D tax credit on expenditure
which had been funded using grants from EU or non-EU states and bodies.
Cost: This measure has been costed on aggregate in Budget 2020, along with a range of other supports for enterprise,
SMEs and agriculture. The combined first and full year cost of these measures is stated to be €30 million and €90.9
million. Accordingly, it is not possible to estimate the cost of this change.
Policy Background: The R&D tax credit was introduced in 2012 to encourage companies to undertake R&D in Ireland
and help promote jobs and investment in Ireland. By using the credit, companies can offset 25% of qualifying R&D
expenditure against corporation tax (i.e. for every €100 spent on R&D, the company saves €25 on its corporation
tax bill).
In 2017 the scheme cost €448 million as 1,505 claims were made. In 2017, small firms accounted for 68% of claims
Budgetary Issues in the Finance Bill 2019
but only 20% of the amount claimed under the scheme12.
Policy Impact: These changes should make it more attractive for smaller firms to engage in R&D. This will enable
them to grow and expand.
12 This data is based on registered employees within a company. It does not account for employees in associated group companies.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 4 – Income Tax, Corporation Tax and CGT: Section 25
Measure: Changes to the Employment and Investment Incentive
Budget Measure: Yes
14 Cost: This measure has been costed on aggregate in Budget 2020, along with a range of other supports for enterprise,
SMEs and agriculture. The combined first and full year cost of these measures is stated to be €30 million and €90.9
million. Accordingly, it is not possible to estimate the cost of this change.
Description: The annual investment limit will increase from €150,000 to €250,000. For those who invest for more than
10 years the limit will increase to €500,000. Currently the relief is split over a number of years (30% in year investment
takes place and 10% is given after the third year). However, from 2020 full income tax relief (40%) will be given in the
year in which the investment is made.
Policy Background: The Employment and Investment Incentive (EII) is a tax incentive that was introduced in 2011. Under
the scheme, investors can claim tax relief of 40% for certain investments. For the year in which the investment is made,
30% relief is provided. A further 10% can be claimed if certain conditions on employment or research and development
are met. In 2016, 1,538 investors availed of the scheme and the cost to the exchequer was €31 million.
A public consultation was carried out in 2019, and a summary of the priority issues for stakeholders was published
as part of a Tax Strategy Group paper in July.13 These included the following proposals:
n Full tax relief should be provided in the year in which the investment is made and gains in the value of shares
should be subject to capital gains rather than income tax;
n The annual investment limit should be increased from €150,000 for longer term EII investors and higher risk
sectors, and capital losses should be allowable for such investors;
Budgetary Issues in the Finance Bill 2019
n Introduce a scheme for ‘micro’ SMEs similar to the UK’s Seed Enterprise Investment Scheme including
an enhanced investor return – 50% – based on the higher risk profile of micro-enterprises;
n Further simplify the application process and provide certainty that company meets the conditions for EII.
Policy Impact: The enhancements to the Employment and Investment Initiative have the potential to improve
take-up rates. This has the potential to increase entrepreneurship, investment and employment.
13 Tax Strategy Group, Tax Incentives for SMEs – 19/05.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 5 - Corporation Tax: Section 26 (Transfer Pricing)
This section is discussed at the end of this paper, alongside other sections relating to the implementation of the EU’s
Anti-Tax Avoidance Directive, the OECD’s BEPS initiative and the introduction of Anti-Hybrid rules.
15
Part 1, Chapter 5 - Corporation Tax: Section 27 (Securitisation)
This section is discussed at the end of this paper, alongside other sections relating to the implementation of the EU’s
Anti-Tax Avoidance Directive, the OECD’s BEPS initiative and the introduction of Anti-Hybrid rules.
Part 1, Chapter 5 – Corporation Tax: Section 28
Measure: Changes to the Real Estate Investment Trust (REIT) framework
Budget Measure: Yes
Description: The following changes were made through Financial Resolution on Budget night.
n Proceeds from a property sale (disposal) will now be subject to a dividend withholding tax upon distribution
to shareholders (which is set to increase from 20% to 25%)
n If a REIT sells an asset it must distribute or reinvest the proceeds within 2 years. Otherwise it will be treated
as REIT property income (85% of which must be distributed to shareholders).
n If a REIT leaves the regime within 15 years of entering, any capital gains made on assets will be subject
to capital gains tax. Before, asset values would have been rebased.
n The Finance Bill also introduced an additional measure which was not included in the Financial Resolutions.
Budgetary Issues in the Finance Bill 2019
Any expense that was not incurred for property rental business will be subject to corporation tax at the 25% rate.
Cost: The changes to REITs and IREF will generate €80 million in revenue in 2020.
Policy Background: REITs are companies that earn rental income from both residential and commercial properties.
To fall under the REIT regime, the company must:
n Derive at least 75% of its profits from rental properties.
n Hold at least three properties and carry on a business of letting properties.
n No one property may account for more than 40% of the total value of the property in the REIT.
n Must distribute at least 85% of rental profits to shareholders.
To avoid double taxation (i.e. tax paid at both corporate and shareholder level) REITs are exempt from corporation tax on
qualifying income and gains from rental property (subject to a high profit distribution requirement to shareholders). Tax
is paid by shareholders when profits are distributed. This means that after tax returns to investors are similar to those
that would be obtained if they invested directly in a rental property. The total value of property held by REITs in the Irish
market is €3.7 billion, 28% of which is residential while 72% is commercial.
Policy Impact: The REIT framework was introduced to promote stable, long-term investment in rental property.
These changes will mean that more tax is collected from the regime, particularly for capital gains.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 5 – Corporation Tax: Section 29
Measure: Changes to the Irish Real Estate Funds regime
Budget Measure: Yes
16 Description: Several changes were made to the Irish Real Estate Funds (IREF) system. These changes are as follows:
n If debt exceeds 50% of total IREF assets, the finance costs relating to this excess debt will be subject to the
20% IREF dividend withholding tax (DWT).
n If the adjusted property finance ratio is less than 1.25, the finance costs needed to bring the ratio to 1.25
will be subject to a 20% withholding tax.
n Gains that are reflected in the market value but not reflected in the accounts will be subject to the DWT
(on distribution).
n Any expense incurred by the IREF but not solely related to the purpose of the IREF will be subject to a 20% DWT.
Cost: The changes to REITS and IREF will generate €80 million in revenue.
Policy Background: The IREF regime was introduced in 2016. An IREF is a fund that derives 25% of its market value
from IREF assets. Non-resident investors in the regime are subject to a 20% withholding tax (though there are some
exclusions). This regime was introduced to ensure that non-resident investors were paying appropriate tax on
profits derived from Irish real estate.
Policy impact: These changes will increase revenue generated under the regime. Investors will now be limited
in their ability to use shareholder debt to reduce the level of profits that are subject to the dividend withholding
tax on distribution.
Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 5 - Corporation Tax: Section 30 (Investment Limited Partnerships)
This section is discussed at the end of this paper, alongside other sections relating to the implementation
of the EU’s Anti-Tax Avoidance Directive, the OECD’s BEPS initiative and the introduction of Anti-Hybrid rules.
Part 1, Chapter 5 - Corporation Tax: Section 33
(Tax treatment of stock borrowing and repurchase (“repo”) arrangements
This section is discussed at the end of this paper, alongside other sections relating to the implementation
of the EU’s Anti-Tax Avoidance Directive, the OECD’s BEPS initiative and the introduction of Anti-Hybrid rules.Budgetary Issues in the Finance Bill 2019
Part 1, Chapter 6 – Capital Gains Tax: Section 34
Measure: Extension of the relief from Capital Gains Tax applied in respect of the purchase and sale (or exchange)
of agricultural land by three years, until 31 December 2022.
Budget Measure: Yes
17
Description: The Farm Restructuring Relief provides a relief from Capital Gains Tax on the sale of a farm,
and the replacement of that farm with the purchase of another. Generally, a tax return must be completed
for land transactions. The Farm Restructuring Relief provides:
n full relief from Capital Gains Tax when the purchase price exceeds the sale price; and,
n partial relief from Capital Gains Tax when the purchase price is lower than the sale price.
To avail of the relief, the first sale or purchase must occur between 1 January 2013 and 31 December 2019.
Each transaction in the restructuring must be completed within 24 months.
This measure would extend the deadline for completion of the first restructuring transaction by 3 years,
until 31 December 2022.
Cost: This measure has been costed on aggregate in Budget 2020, along with a range of other supports for enterprise,
SMEs and agriculture. However, a review of the relief14 published alongside Budget 2020 states that it has cost €5.8
million (in terms of revenue foregone) since its introduction in 2013 (the latest estimate indicates a cost of €1.6 million
in 2018).
Policy Background: The Farm Restructuring Relief was introduced in Finance Act 2013, with changes implemented
in Finance Act 2014 that extended the relevant period by one year and restricted the relief to agricultural land only.
Budgetary Issues in the Finance Bill 2019
Policy Impact: The fragmentation of farming land is costly and can reduce operational efficiency (e.g. through additional
time and labour required in tending to land, and in the movement of stock and machinery). This relief is intended to
encourage the consolidation of farming lands. This consolidation would involve the sale of more distant land with
the view to acquiring land that is adjacent to current land holdings. This measure is intended to make the process of
farm restructuring more efficient, and to provide for more operationally efficient holdings, in general.
A review of the relief published alongside Budget 2020 notes that the take-up (and cost) of the scheme has increased
over time. However, it emphasises that the scheme is effective in removing a tax barrier to farm consolidation.
It further recommends an extension of the relief and claims that there is no evidence of any deadweight.
14 Review of Section 604B – Capital Gains Tax Relief for Farm Restructuring.Budgetary Issues in the Finance Bill 2019
Part 2 – Excise: Section 38
Measure: Increase in excise rates on tobacco products
Budget Measure: Yes
18 Description: The excise duty on a packet of 20 cigarettes is being increased by 50 cents (including VAT) with a pro-rata
increase on the other tobacco products.
Cost: Budget 2020 estimates that the first year and full year yield from the increased excise duties is €57.1 million.
However, this is the upper limit of the range of estimates provided by the Revenue Commissioners in their Ready
Reckoner. They estimate that this increase in Excise could result in a revenue impact from -€42 million to +€57 million.
This range reflects the degree of uncertainty arising from a potential behavioural change, following the increase in Excise
(i.e. consumption may fall, resulting in a net revenue loss).
Policy Background: Excise taxes, or “sin taxes” are applied to raise revenue, but also to reduce the activity they are
applied to. In January 2018, Ireland had the highest rates of duty on tobacco products including cigarettes and roll-your-
own (RYO) in the EU. The Programme for a Partnership Government commits to making Ireland tobacco free by 2025
(defined as less than 5% of the population smoking).
Policy Impact: It is unclear the impact that may arise from the increase in excise duty – the Revenue Commissioners
have indicated that further increases in excise duties may not lead to increased revenue yields.
Part 2 – Excise: Section 39
Measure: Carbon tax increase in respect of Mineral Oil Tax
Budgetary Issues in the Finance Bill 2019
Budget Measure: Yes
Description: Following Financial Resolution 2 on Budget night, mineral oils used as auto fuels have increased in price,
incorporating the carbon tax increase from €20 to €26. These include petrol and auto diesel. Information provided on
Budget day15 is that if the full increase is passed through to the final retail price, this will result in a VAT inclusive
increase of €0.017 on the price of 1l of petrol and €0.020 on the price of 1l of auto diesel. From 1 May 2020,
this increase will apply to non-auto fuels and vehicle gas.
Cost: Costs were provided in Budget 2020 for the cost of all the carbon tax increases (namely section 39, 44 and 45).
This states that the increase of the carbon tax per tonne by €6 to €26 will yield €90 million in the first year, and €130
million in a full year. Some of this measure takes effect from midnight on Budget day, while other elements come into
effect 1 May 2020. As this measure aims to cause a behavioural change, it would be useful to have clarity on the costing
method applied.
15 Parliamentary debates on the Financial Resolutions, 8th October 2019.Budgetary Issues in the Finance Bill 2019
Policy Background: Following a recommendation by the Commission on Taxation, Budget 2010 introduced a tax on
carbon emissions which was intended as an environmental measure, to change behaviour to reduce greenhouse gas
emissions, and encourage companies to bring low carbon products and services to the market.16 This also broadened
the tax base – it was first applied to petrol and diesel, expanded to other liquid fuels, and then to solid fuels. According
to the CSO, businesses contribute 52.4% of carbon tax receipts with the remainder coming from private motorists/
households, however businesses may pass the carbon tax on to customers through increased prices17. The carbon tax 19
yielded €431 million in 2018, and almost €282 million by end August 201918.
Policy Impact: The Government has announced its intention to increase the price of carbon to €80 per tonne by 2030,
as recommended by the Oireachtas Joint Committee on Climate Action19 and the European Commission in the Country
Specific Recommendations for Ireland.
Last year, the ESRI analysed the economic and environmental impact of raising the carbon tax20, published with last
year’s budget. While acknowledging limitations in their model, the analysis showed that the impacts on producer and
household consumer prices would be relatively small. The transport and energy sectors would be the most affected. For
households, the carbon tax increase will impact richer households more in terms of total consumer prices and have a
similar impact for all households when considering consumer prices of heating. However, as a percentage of income,
the increase is regressive as poorer households will lose a higher share of their income (0.67%) compared to the
richest (0.28%).
Subsequent analysis by the ESRI21 states that increasing the carbon tax alone is not sufficient to prevent total emissions
from rising. Looking at households, rural or richer households emit more greenhouse gases than urban or poorer
households. While noting that carbon-intensive sectors such as transport, mining and electricity production will
be affected by the carbon tax increase, accommodation may benefit.
Budgetary Issues in the Finance Bill 2019
The Government indicated that the additional funding raised by the increase in carbon tax has been ringfenced
for climate action measures such as increases in the fuel allowance, housing upgrades, peatland rehabilitation,
and investment in electric vehicle infrastructure and cycling. It is not clear how such ringfencing will take place,
or what would happen if there is a shortfall in the revenue from this tax change.
16 Budget 2010 – Financial Statement.
17 Tax Strategy Group – Climate Action and Tax, 19/04.
18 PQ 39251/19 available at https://www.oireachtas.ie/en/debates/question/2019-09-26/73/#pq_73.
19 Oireachtas Joint Committee on Climate Action, Climate Change: A Cross-Party Consensus for Action, March 2019.
20 ESRI – Economic and Environmental impacts of increasing the Carbon Tax, published alongside Budget 2019.
21 ESRI, The Economic and Distributional Impacts of an Increased Carbon Tax with Different Revenue Recycling Schemes, October 2019.Budgetary Issues in the Finance Bill 2019
Part 2 – Excise: Section 42
Measure: Enhanced excise relief for microbreweries
Budget Measure: Yes
20 Description: The production threshold at which producers qualify for excise relief increased from 40,000 hl to 50,000 hl.
The cap on the volume of relief at which claims can be made was kept at 30,000 hl.
Cost: This measure has been costed on aggregate in Budget 2020, along with a range of other supports for enterprise,
SMEs and agriculture. The combined first and full year cost of these measures is stated to be €30 million and €90.9
million respectively. Accordingly, it is not possible to estimate the cost of this change.
Policy Background: The EU allows member states to provide microbrewers (producing up to 200,000 hl of beer
per annum) relief from excise duty. Ireland introduced its current relief in 2005. It currently allows microbreweries
(producing less than 40,000 hl) to receive relief on excise duties (50%) on 30,000 hl of beer. In 2018, 90 claims
were made and €5.8 million claimed under the scheme.
Policy Impact: The purpose of excise relief for microbreweries is to promote competition and diversity within the beer
market and to help regional development. These changes will allow larger microbreweries expand their sales while
maintaining the current benefits of the relief.22
Part 2 – Excise: Section 43
Measure: Electricity Tax
Budgetary Issues in the Finance Bill 2019
Budget Measure: Yes
Description: The rate for businesses and non-business will be equalised from 1 January 2020, meaning that the rate
for business will double to €1 per megawatt hour.
Cost: This is estimated to raise €2.5 million per annum. At present, the yield from the electricity tax has fallen to €2.5
million, so this change in effect should double the yield.
Policy Background: This amendment relates to an excise duty charged on supplies of electricity. The Energy Taxation
Directive provides a framework for this excise duty, and sets minimum excise duty rates that must be applied. Ireland
was previously applying the lowest rates possible, with most other Member States applying a higher rate.23 The EU
average business rate was €8.68 per megawatt hour, and for non-businesses was €15.39. The Climate Action Plan
required the Department of Finance to consider equalising electricity rates at €1/MWh.
Policy Impact: This change is not expected to have a significant impact, with a low revenue yield anticipated. However,
this removes a measure which could be considered a fossil fuel tax subsidy, in line with the recent European Commission
Country Specific Recommendations.24
22 The General Excise Paper – TSG 19/09 provides more detail.
23 See Appendix 1 in the TSG paper Climate Action and Tax – 19/04.
24 European Commission, 2019 Country Specific Recommendations for Ireland.Budgetary Issues in the Finance Bill 2019
Part 2 – Excise: Section 44
Measure: Amendment of the Natural Gas Carbon tax rate
Budget Measure: Yes
Description: This amendment applies the increased carbon tax rate per tonne of €26 to natural gas. This means the rate 21
of natural gas carbon tax increases to €5.22 per megawatt hour.
Cost: As previously stated, costs were provided for the cost of all the carbon tax increases (namely sections 39, 44
and 45). This states that the increase of the carbon tax per tonne by €6 to €26 will yield €90 million in the first year,
and €130 million in a full year. For this section, the increase will come into effect 1 May 2020. The annual carbon tax yield
on natural gas raised €50 million in 2018.
Policy Background: see section 39.
Policy Impact: see section 39.
Part 2 – Excise: Section 45
Measure: Amendment of the Solid Fuel Carbon tax rate
Budget Measure: Yes
Description: This amendment applies the increased carbon tax rate per tonne of €26 to solid fuel. This increases
the carbon tax applying to coal and peat.
Budgetary Issues in the Finance Bill 2019
Cost: As previously stated, costs were provided for the cost of all the carbon tax increases (namely sections 39, 44 and
45). This states that the increase of the carbon tax per tonne by €6 to €26 will yield €90 million in the first year, and
€130 million in a full year. For this section, the increase will come into effect 1 May 2020. The annual carbon tax yield
on solid fuel raised €25 million in 2018.
Policy Background: see section 39.
Policy Impact: see section 39.Budgetary Issues in the Finance Bill 2019
Part 2 – Excise: Section 46
Measure: Betting Duty Relief
Budget Measure: Yes
22 Description: Relief of €50,000 will be provided from betting duty and betting intermediary duty a year.
The relief is subject to a commencement order and State Aid approval.
Cost: This measure has been costed on aggregate in Budget 2020, along with a range of other supports for enterprise,
SMEs and agriculture. The combined first and full year cost of these measures is stated to be €30 million and €90.9
million respectively. Accordingly, it is not possible to estimate the cost of this change.
Policy Background: Betting duty is a turnover based tax (charged at 2%) placed on all bets that take place in the state
(either online, retail or through an intermediary). In 2018, €52 million was raised from betting duty, 42% of which was
from bets that took place online. The purpose of betting duty is to raise revenue and to take account of the social costs
associated with problem gambling. A report from the Department of Health found that 0.8% of the population are
problem gamblers.
Policy Impact: The rise of gambling online likely had a negative impact on the retail component of the betting market,
particularly smaller retailers. The new proposal means that betting duties won’t be paid on the first €2,500,000 of
turnover. This may provide some relief to small retail bookmakers, however, it does nothing to alleviate the social
costs of problem gambling.
Part 2 – Excise: Section 49
Budgetary Issues in the Finance Bill 2019
Measure: VRT Nitrogen Oxide Surcharge
Budget Measure: Yes
Description: This section introduces a new surcharge which will apply as part of VRT to all passenger cars which
are registered after 1 January 2020. The charge will apply on a euro (€) per milligram/kilometre basis, with the rate
increasing in line with the level of nitrogen oxide (NOx) emitted. The charge will be capped at a maximum of €4,850
for diesel vehicles and €600 for other vehicles. This replaces the 1% VRT surcharge on diesel vehicles.
Cost: This change is estimated to yield €25 million per annum.
Policy Background: Vehicle Registration Tax (VRT) is a tax chargeable on the registration of vehicles in the State and
is charged as a percentage of the open market selling price of the vehicle. Since 1 July 2008, both VRT and Motor Tax on
private motor cars have been calculated on the basis of CO2 emissions, so that cars with higher CO2 emissions attracted
a higher tax liability.You can also read
