Leo Varadkar (Dublin West, Fine Gael)
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Question 263: To ask the Minister for Finance the manner in which the 1% and 2% levies will operate with regard to the self-employed; if it will be on money earned before costs are taken into account or just income less costs; and if he will make a statement on the matter. [1248/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The position is that all individuals are liable to the income levy if their gross income exceeds the threshold of €18,304 per annum or the increased age exemption thresholds of €20,000 single/€40,000 married for those aged 65 and over. Persons in receipt of a full medical card are specifically exempt from the income levy.

The income levy is payable on gross income, up to a ceiling of €100,100 at a rate of 1 per cent, with a rate of 2 per cent applying to income in excess of that ceiling but not greater than €250,120, and a rate of 3 per cent applying on the balance.

In relation to the self-employed, the income levy is calculated by applying the appropriate percentage to the gross income, after deduction of only those expenses directly associated with the performance of the trade, i.e. in accordance with the normal principles of commercial accounting. No deduction is allowed for capital allowances or personal pension contributions.