The Irish Finance Bill 2013, which was published on 13 February 2013, was enacted on 27 March 2013 as the Finance Act 2013.

Modifications have been made to the tax regime for start-up companies. These companies currently are not required to pay corporation tax in their first three years of trading. This exemption regime has now been extended to allow start-up companies to carry forward any unused relief arising in their first three years but not used owing to low or nil profitability.  Such relief could be used in subsequent years up to a maximum of the eligible amount of employer’s pay related social insurance (PRSI) in each period.

The R&D tax credit regime has also been modified. This regime currently provides a 25% tax credit for R&D spending in a period that exceeds the spending in the base year (2003). Up to now the first EUR 100,000 of eligible R&D spending has been eligible for the credit without any need to refer to the base year. The Finance Act 2013 has now increased this figure to EUR 200,000. The tax regime for R&D expenditure is to be reviewed in 2013.

The Finance Act has also extended the scope for companies to surrender part of their R&D relief to reward employees who have played an important role in the research and development. One condition for the surrender was that the employee should spend at least 75% of the time working on R&D. This has now been reduced to 50%.

The de minimis amount of investment and property rental income that may be retained by a close company without incurring a surcharge on the income is increased to EUR 2,000. The similar de minimis amount in relation to trading or professional income of certain service companies is also increased to EUR 2,000.

The 25% stock relief regime available to farmers is extended for a further three years. The 100% stock relief available to certain young trained farmers is also being extended for a further three years, subject to clearance under the EU state aid rules.

The rate of capital gains tax is increased from 30% to 33% with effect from 5 December 2012. A capital gains tax relief is introduced for farm restructuring, applicable from 1 January 2013 to 31 December 2015. The relief applies where the proceeds from the sale of farm land are reinvested for the same purpose.

The rate of capital acquisitions tax has also been increased from 30% to 33%. This new rate applies to gifts and inheritances after 5 December 2012. The tax free thresholds relating to this tax have been reduced.

Individuals are being given the option to withdraw up to 30% of the value of funded Additional Voluntary Contributions they have made to supplement their retirement benefits. These withdrawals will be subject to tax on the individuals at their marginal income tax rate. The option is available to individuals for three years from the date the Finance Act was passed. From 2014, changes are to be made to the maximum allowable pension fund at retirement for tax purposes, an amount known as the Standard Fund Threshold.