Financial Institution Levies
Levy 2019
Finance Section 126AA of the Stamp Duties Consolidation Act 1999 makes provision for financial institutions to be charged with a stamp duty (referred to as the “bank levy”) for each of the years 2014 to 2021. The charge is based on a percentage of the amount of Deposit Interest Retention Tax (DIRT) paid by each financial institution in a specified “base year”. For the charge arising in the year 2021, the base year is 2019.
Act 2019 amends section 126AA of the Stamp Duties Consolidation Act 1999 in relation to a fixed annual levy of €150 million imposed on certain financial institutions. The levy is charged on the Deposit Interest Retention Tax (DIRT) paid by the relevant financial institutions in a series of base years.
The levy was increased from its current rate of 59% to 170% of the DIRT paid in the 2017 base year for payments due in the years 2019 and 2020. This measure came into effect on Budget night.
Levy 2020
Finance Act 2020 section 126AA of the Stamp Duties Consolidation Act 1999 in relation to a fixed annual levy of €150 million imposed on certain financial institutions. The levy is charged on the Deposit Interest Retention Tax (DIRT) paid by the relevant financial institutions in a series of base years.
To maintain the €150 million yield for the year 2021, the levy is increased from its current rate of 170% to 308 % of the DIRT paid in the 2019 base year.
Levy 2021
Finance Act 2021 57 amends section 126AA to extend the charge for a further year to 2022, while maintaining the base year of 2019 and the rate of duty chargeable on the DIRT paid by financial institutions in respect of that year. For the year 2022, no charge will arise in respect of DIRT paid by KBC Bank Ireland plc and Ulster Bank Ireland DAC in 2019.
Levy 2022-24
Finance Act 2022 amends the “bank levy”. The charge is based on a percentage of the amount of Deposit Interest Retention Tax (DIRT) paid by each financial institution in a specified “base year”. The amendment extends the charge for a further year to 2023, while maintaining the base year of 2019 and the rate of duty chargeable on the DIRT paid by financial institutions in respect of that year. For the year 2023 (as was the case in 2022), no charge will arise in respect of DIRT paid by KBC Bank Ireland plc and Ulster Bank Ireland DAC in 2019.
Finance Act 2023 provides for a revised form of bank levy for 2024. The revised levy will apply to AIB, Bank of Ireland, EBS and PTSB. The levy will be applied at the rate of 0.112 per cent of the value of deposits held by each bank on 31 December 2022, to the extent that such deposits are “eligible deposits” within the meaning of the European Union (Deposit Guarantee Schemes) Regulations 2015.
Brexit & Gibraltar Insurers
Finance Act 2019 (which is subject to a commencement order) amends section 124B of the Stamp Duties Consolidation Act 1999. It provides that Gibraltar-regulated assurers will continue to be liable to the current 1% levy on life assurance policies on their Irish business in the event of the UK leaving the EU.
Finance Act 2019 (which is subject to a commencement order) amends section 125 of the Stamp Duties Consolidation Act 1999. It provides that Gibraltar- regulated assurers will continue to be liable to the current 3% levy on nonlife insurance policies on their business in the event of the UK leaving the EU.
Certain Corporate Acquisitions
Finance Act 2019 inserts a new section 31D into the Stamp Duties Consolidation Act 1999. This imposes a stamp duty charge where there is an agreement to acquire a (target) company and the target company enters into a Court-approved scheme of arrangement involving the cancellation of its shares in accordance with the Companies Act 2014.
Stamp duty is payable at the rate of 1% of the consideration paid to the shareholders for the cancellation of their shares as if the shares were being directly purchased. The stamp duty is payable by the acquirer. This measure came into effect on Budget night.
Health Insurers Duty
Finance Act 2022 modernised the stamp duty on authorised health insurers. It provides for the introduction of a streamlined and modernised system for the collection of the duty and puts on a statutory footing a requirement to use electronic means to deliver statements to the Revenue Commissioners. It is made subject to the compliance provisions that normally apply to stamp duties.
These are the surcharge where a statement is delivered late, different levels of penalties where incorrect statements are submitted either carelessly or deliberately, or where no statement has been submitted.