By Eamon Quinn
A large cut in the Vat rate for publishers of news websites and no change to the rate for printed newspapers has been hailed by the industry group for national newspapers.
Despite a hike in the Vat rate on tourism services back up to 13.5%, Finance Minister Paschal Donohoe pegged the rate for printed newspapers and sporting operations at an unchanged rate.
In a reference to higher prices charged by hotels, the minister cited a “decline in competitiveness” for restoring the tax to 13.5% for tourism, while the rate for newspapers and sports facilities was kept at 9%. In a significant move, the department said the Vat rate on digital books and newspaper websites will be cut to 9% from 23% from the start of next year following EU agreement that member states can apply reduced Vat rates on digital publications. The tax cut measure will cost the exchequer €8m in a full year.
“We welcome the minister’s decision to maintain the 9% Vat rate for printed newspapers and also to cut the VAT rate to 9% for digital publications, which will reduce the cost of access to quality, independent Irish journalism for people who access their news online,” said NewsBrands Ireland chair Vincent Crowley.
“Most European countries apply zero or super-reduced rates to newspapers in recognition of their core societal function,” he said, adding that the industry hoped for further “progress” in next year’s budget.
Other significant tax changes affecting large companies included a new exit tax targeted at multinationals.
Following EU directives, the exit tax of 12.5% will be levied on capital gains of firms setting up offshore. The department didn’t pencil in any revenues it expected to collect from the tax in the coming year. McCann FitzGerald’s tax group said it will take some years to assess the effect of the new tax.
An extension of tax credit for qualifying film projects to 2024 and “a short-term, tapered regional” incentive will help the State double jobs in the industry, the Audiovisual Federation said.
John Heffernan, EY’s managing partner in Limerick said: “Given the recent announcement of additional investment in Troy Studios in Limerick, this additional certainty for the tax relief is most welcome.”
On the self-employed, Irish Tax Institute president Marie Bradley welcomed a €200 rise in the income tax credit but wants “full equalisation with PAYE workers”.
The minister’s reiteration of pre-funding a so-called Rainy Day fund by €1.5bn and an annual injection of €500m starting next year was welcomed by head of the British Irish Chamber of Commerce John McGrane. David McMcNamara, economist and director at EY DKM Economic Advisory, said “the plan to up investment in our third-level sector and R&D is vital”.