Financial Product Levies
Cards and Cheques
Finance Act 2021 58 provides for the introduction of a streamlined and modernised system for the collection of stamp duties on financial cards and cheques. An overview of the amendments to the Stamp Duties Consolidation Act 1999 provided for by section 58 is set out below.
It abolishes the stamp duty charge that currently applies on bills of exchange (i.e. cheques, drafts and money orders) under section 2 by deleting the “Bills of Exchange” heading from Schedule 1 and replaces it with a new annual levy on bills of exchange, which is provided for by a new section 123D “Bills of Exchange”. Under section 123D, stamp duty at the rate of €0.50 will be payable in respect of each bill of exchange that is processed (or issued, subject to an election being made) in each calendar year. The due date for payment will be 31 January after the end of the year.
It abolishes the requirement to pay preliminary duty on cash, combined and debit cards from section 123C and on credit cards and charge cards from section 124A, by deleting sections 123C and 124A.
It amends section 124 “Credit cards and charge cards” to change the period in respect of which credit cards and charge cards are chargeable to stamp duty from the 12-month period ending on 1 April to the calendar year. It changes the due date to 31 January following the end of the year, thus aligning it with the chargeable period for all financial cards and cheques. To facilitate the transition to this new chargeable period, the legislation provides for a short chargeable period running from 2 April 2023 to 31 December 2023 and a reduced charge of €22.50 per credit card account or charge card issued to an account during that period (instead of the €30 rate that ordinarily applies).
It puts on a statutory footing a requirement to use electronic means to deliver statements to the Revenue Commissioners, and pay the related stamp duties, under sections 123B “Cash, combined and debit cards”, 124 “Credit cards and charge cards” and 123D “Bills of Exchange”.
Insurance Policies
Commencement of the amendments will be subject to Ministerial Commencement Order.
Finance Act 2021 59 provides for the introduction of a streamlined and modernised system for the collection of stamp duties on certain insurance policies. An overview of the amendments to the Stamp Duties Consolidation Act 1999 provided for by Finance Act 2021 59 is set out below.
It abolishes the stamp duty charge that currently applies on policies of insurance (other than life insurance) under section 2 by deleting the “POLICY OF INSURANCE other than life insurance where the risk to which the policy relates is located in the State” and “Insurance” headings from Schedule 1. It replaces it with a new annual levy on policies of insurance (other than life insurance) provided for by a new section 125C “Policies of insurance other than life insurance”. Under section 125C, stamp duty at the rate of €1.00 will be payable in respect of each policy of insurance (other than life insurance) issued by insurers each quarter. The due date for payment will be 25 days after the end of each quarter.
It deletes sections 59 and 62, which will no longer be required following the deletion of the “POLICY OF INSURANCE other than life insurance where the risk to which the policy relates is located in the State” and “Insurance” headings from Schedule 1.
It puts on a statutory footing a requirement to use electronic means to deliver statements to the Revenue Commissioners, and pay the related stamp duties, under sections 124B “Certain premiums of life assurance”, 125 “Certain premiums of insurance” and the new section 125C “Policies of insurance other than life insurance”.
Commencement of the amendments will be subject to Ministerial Commencement Order.
Finance Act 2021 60 brings the legislation providing for stamp duties on financial cards, cheques and certain insurance policies within the scope of the general stamp duties compliance provisions. These compliance provisions are section 126B (Assessment of duty charged on instruments), section 128B (Powers of inspection) and section 134A (Penalties) of the Stamp Duties Consolidation Act 1999. In addition, section 60 provides for:
- the introduction of a new section 126C, which will provide for the imposition of a surcharge where a statement is delivered late under section 123B, 123C, 123D, 124, 124A, 124B, 125 or 125C;
- the amendment of sections 123B, 124, 124B to remove the legislation providing for the imposition of a penalty at a daily rate of €380 which there is a failure to deliver a statement or make a payment of stamp duty under those sections;
- the amendment of sections 123B, 124, 124B and 125 to remove the use of section 47 of the Succession Duty Act 1853 as a mechanism for enforcing compliance with those sections;
- the repeal of sections 123 and 123A, which are no longer in effect.
The amendments will commence on 1 January 2022.
Electronic Trading in Securties
Stamp duty is e charged on the electronic trading in securities. Chapter 2 applies to electronic transfers of interests in securities only and does not apply to written instruments such as stock transfer forms. Where there is transfer of securities (or an interest in securities) in a settlement system, and the operator of which has an agreement in place with the Revenue Commissioners for the collection of stamp duty, the record-keeping obligations will only apply to the person who enters the transfer order in the settlement system. In all other circumstances, the record-keeping obligations remain with all parties to a securities transaction. The compliance provisions in SDCA 1999 and record keeping requirements include transfer orders referred to in Chapter 2. Finance Act 2022 provided for stamp duty to be charged where a transfer in title to securities was effected through the CREST system in the United Kingdom.
Finance Act 2022 provided for the introduction of a streamlined and modernised system for the collection of stamp duties on financial cards and cheques. The various amendments were subject to commencement by Minister for Finance, and have not yet been commenced. This amendment provided for specific commencement dates (1 January 2023 or 1 January 2024) in respect of all of the amendments provided for by section 61. In addition, the definitions of “credit institution” and “financial institution” have been updated to reflect changes in EU legislation.