Finance Act 2009

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Chapter 2

Income Levy

Income levy.

2.— (1) The Principal Act is amended—

(a) in section 531A(1) by substituting the following for the definition of “ aggregate income”:

“ ‘aggregate income for the year of assessment’, in relation to an individual and a year of assessment, means the aggregate of the individual’s relevant emoluments in the year of assessment, including relevant emoluments that are paid in whole or in part for a year of assessment other than the year of assessment during which the payment is made, and relevant income for the year of assessment;”,

(b) in section 531B in paragraph (b) of the Table to subsection (1) by substituting the following for all of the words from “The income described in this paragraph” to “in accordance with the Income Tax Acts and—”:

“The income described in this paragraph, to be known as ‘relevant income’, is income, without regard to any amount deductible from or deductible in computing total income, from all sources as estimated in accordance with the Tax Acts, other than relevant emoluments, social welfare payments and similar type payments and excluded emoluments, and—”,

(c) in section 531B in paragraph (b)(iii) of the Table to subsection (1) by deleting “and”,

(d) in section 531B in paragraph (b)(iv) of the Table to subsection (1) by substituting “such payment,” for “such payment.”,

(e) in section 531B in paragraph (b) of the Table to subsection (1) by inserting the following after subparagraph (iv):

“(v) disregarding expenses, in respect of which an employee may be entitled to relief from income tax, which fall within Regulation 10(3) of the PAYE Regulations,

(vi) having regard to any relief arising under subsection (5)(a) of section 201, and paragraphs 6 and 8 of Schedule 3 in respect of payments chargeable to tax under section 123, and

(vii) excluding relevant emoluments of an individual who is resident in a territory with which arrangements have been made under section 826(1)(a)(i) in relation to affording relief from double taxation, where those emoluments are the subject of a notification issued under section 984(1).”,

(f) in section 531B(2) by substituting the following for paragraph (a):

“(a) subject to subsection (3), proves to the satisfaction of the Revenue Commissioners that his or her aggregate income for the year of assessment does not exceed €15,028,”,

(g) in section 531B by inserting the following after subsection (2):

“(3) For the purposes of determining an individual’s aggregate income for the year of assessment 2009 for the purposes of subsection (2)(a), any payment of relevant emoluments from which income levy was not deducted by an employer, made in the period from 1 January 2009 to 30 April 2009, to which the appropriate portion of €18,304 was applied in that period, shall be disregarded.

(4) (a) This subsection applies to emoluments paid to an individual in the period 1 January 2009 to 30 April 2009 in the form of any taxable ex-gratia payment made on the occasion of the redundancy of that individual, which is chargeable to income tax under the provisions of section 123.

(b) Notwithstanding any other provision of this Part and subject to paragraph (c), to the extent that emoluments are emoluments to which this subsection applies, those emoluments—

(i) shall be charged to income levy for the year of assessment 2009 at the rate of—

(I) 1 per cent on the first €100,100 of such emoluments,

(II) 2 per cent on the next €150,020 of such emoluments, and

(III) 3 per cent on the remainder of such emoluments,

and

(ii) shall not be reckoned in computing relevant emoluments for that year for any other purpose of this Part.

(c) This subsection shall not apply to emoluments paid to an individual if that individual so elects by notice in writing to an inspector after the end of the year of assessment 2009.”,

(h) by substituting the following for section 531C:

“Rate of charge.

531C.— (1) For the year of assessment 2009, an individual shall be charged to income levy on the individual’s aggregate income for the year of assessment at the rates specified in the Table to this subsection.

TABLE

(2) For the year of assessment 2010, and subsequent years of assessment, an individual shall be charged to income levy on the individual’s aggregate income for the year of assessment at the rates specified in the Table to this subsection.

TABLE

.”,

(i) in section 531D by substituting the following for subsection (2):

“(2) (a) As respects any payment of relevant emoluments made to or on behalf of an employee in the period beginning on 1 January 2009 and ending on 30 April 2009, income levy shall be deducted from such emoluments by the employer at any or all of the following rates—

(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 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 relevant emoluments exceeds €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.

(b) As respects any payment of relevant emoluments made to or on behalf of an employee on or after 1 May 2009, income levy shall be deducted from such emoluments by the employer at any or all of the following rates—

(i) 2 per cent where the amount of the relevant emoluments does not exceed €1,443, 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) 4 per cent on the amount of the excess where the amount of relevant emoluments exceeds €1,443, but does not exceed €3,365, 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) 6 per cent on the amount of the excess where the amount of relevant emoluments exceeds €3,365, 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.”,

and

(j) by substituting the following for section 531H:

“Assessment, collection, payment and recovery of income levy on aggregate income for the year of assessment.

531H.— (1) Income levy payable for a year of assessment in respect of aggregate income for the year of assessment shall be assessed, charged and paid in all respects as if it was an amount of income tax assessed and charged under the Tax Acts, but without regard to section 1017, and may be stated in one sum (in this section referred to as the ‘aggregate 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) Where, but for this subsection, no assessment to income levy would be made on an individual for a year of assessment, then an officer of the Revenue Commissioners shall make an assessment to income levy on the individual to the best of the officer’s judgement of the amounts chargeable to income levy, and the provisions of the Tax Acts, including in particular those provisions relating to the assessment, collection and recovery of tax and the payment of interest on unpaid tax, shall apply as respects any assessment to income levy made on the individual by virtue of this subsection, other than any such provisions in so far as they relate to the granting of any allowance, deduction or relief.

(3) Where income levy is payable for the year of assessment 2009 in respect of aggregate income for the year of assessment, 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.

(4) The Revenue Commissioners may make regulations for the purposes of the proper administration and implementation of this Part, and those regulations may, in particular and without prejudice to the generality of the foregoing, include provision for assessment, collection, recovery and repayment of income levy for any year of assessment to which this Part applies.”.

(2) This section applies for the year of assessment 2009 and subsequent years of assessment.