The 2025 Budget brings several significant tax changes that impact both individuals and businesses. Here’s a concise summary of the key updates:
Personal Taxes:
Income Tax: No change in the rates, but the standard rate band increases by €2,000.
Universal Social Charge (USC): The second USC threshold rises to €27,382 with a rate reduction to 3%.
PRSI: Employee and employer PRSI rates increase by 0.1% starting October 2024.
Tax Credits: Various credits, including personal, PAYE, and rent, increase.
Help to Buy Scheme: Extended to 2029.
Mortgage Interest Tax Relief: Extended another year, providing relief for increased mortgage interest.
Business Taxes:
Corporation Tax: Standard rate remains at 12.5%.
Vacant Homes Tax: Increased to 7 times the Local Property Tax.
Relief for Investment: EII and other start-up relief schemes extended and limits raised.
VAT:
VAT Thresholds: Increased to €42,500 for services and €85,000 for goods starting in 2025.
Gas & Electricity: Reduced VAT rate of 9% extended for 6 months.
Excise & Carbon Taxes:
Tobacco: Duty on cigarettes increased by €1.
E-Cigarettes: New excise duty of 50 cents per ml on e-liquids, effective mid-2025.
Carbon Tax: Increase on petrol and diesel effective from October 2024.
Minimum Wage:
Increase: Minimum wage will rise to €13.50 per hour from January 2025.
These changes aim to adjust the tax landscape in response to economic shifts, offering relief in housing, business investments, and energy costs, while addressing environmental concerns through carbon taxes. Businesses and individuals alike should be prepared for these updates and consult with tax advisors to ensure compliance and optimize benefits.
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