THE Commission of Taxation report has called for an end to tax relief for trade union subscriptions suggesting that membership is more likely to be a condition of employment rather than taken for €70 tax credit purposes.
As part of the commission’s wide-reaching blueprint for the reform of Ireland’s tax framework they also propose the discontinuation of PRSI exemption for employee share options.
The commission have said, however, that the tax-free status of employee share ownership trusts (ESOTs) should remain, on account that they “play a role in the modernisation and privatisation of State-controlled businesses.”
On the subject of employee tax credits (ETCs), or the PAYE tax credit, the commission has concluded that it should be extended to the self-employed rather than just PAYE workers mainly on account of the self-employed having to pay preliminary tax for a year of assessment before the end of that year and are likely to have higher compliance costs than the majority of the PAYE sector.
Meanwhile, the commission have concluded that the Government could net upwards of €70 million a year in tax if it were to totally discontinue its artist’s exemption rule.
That forecasted figure is largely based on most recent estimates, from 2006, which calculated that the amount of income tax waived from money earned from artistic works totalled around €66m per year.
However, since then, artists earning more than €250,000 a year from their work are liable for tax.
The report said the exemption is of no benefit to artists whose income doesn’t reach the taxable threshold.
“While the tax exemption may have created an environment in which the arts can flourish, considerations of equity and efficiency outweigh this factor and, accordingly, we recommend that the exemption be discontinued,” the commission said in its proposals.
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