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Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

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PRSI Extension to Unearned Income – Social Welfare and Pensions Bill

The Social Welfare and Pensions Bill 2013 provides for the abolition of the exemption from PRSI applying to chargeable persons whose only additional income is unearned income i.e. investment income, from 1 January 2014. This PRSI measure was first announced in Budget 2013.

Section 3 of the Bill (as initiated) provides that unearned income of chargeable persons will become liable to PRSI at 4% from 1 January 2014. The definition of a “chargeable person” is contained in section 959A Taxes Consolidation Act 1997 and further meaning is given by section 959B Taxes Consolidation Act 1997.

According to the Explanatory Memorandum to the Bill, a chargeable person for Revenue purposes is generally a person who has income in excess of a3,174. However, a chargeable person does not include a PAYE taxpayer:

  • who does not have other income, or
  • who has an element of other insignificant income that is fully taxed through the Revenue Commissioners PAYE system (generally amounts not exceeding a3,174 are regarded as insignificant).

The Social Welfare and Pensions Bill 2013 is at the time of writting currently at Report Stage in the Dáil. The Bill as initiated as well as the Explanatory Memorandum and the proposed Committee Stage amendments are available from the Oireachtas website.