ENS Budget Review - 2013 Budget Highlights

Introduction

The 2013 budget read by the Minister of Finance on 27th February 2013 contains relatively fewer tax proposals than prior years. However, some of the proposals are quite far reaching particularly relating to Trusts and Corporate gearing. In this brief analysis we highlight some of the key proposals for tax law changes.

Corporate Tax

• There is no change proposed to the current rates of corporate tax or dividend tax.

• Gearing continues to receive detailed attention and three measures are proposed to preclude debt eroding the tax base in certain circumstances namely:

  • re-characterisation of debt instruments as shares in certain circumstances, particularly where they do not have a realistic possibility of being repaid in 30 years, or if convertible into shares at the request of the issuer;