TAXATION

 


TAXATION

The taxation guidelines and details below are currently incorrect and are due to be updated shortly following the forthcoming December 2010 Budget. The details will be different and may also change in the future, if so, you are advised to seek advice from your Accountant for up to date details, rates, and advice or contact us via our "contact details".

Irish Taxation  -  Details & Rates   -   2010

 

PRINCIPAL TAX CREDITS

€

 

     

Personal Tax Credit

   

Single Person

1,830

 

Married Couple/Single Parent

3,660

 

Widow(er) with dependent child (1)

4,000

 

Additional Widow(er)

600

Employee (PAYE) (2)

1,830

 

(2) Not available to proprietory Directors and the self employed

   
     

Incapacitated Child

3,660

 

(1) Additional credits due for Widow(er) with dependent children for first 5 years after bereavement

   
     

Age Credit

   

Single/Widowed Person

325

 

Married

650

 

 

€

 

Blind Persons Credit

   

Married (both spouses blind)

3,660

 

Single or married (one spouse blind)

1,830

 

     

Home Loans – Standard Rate (Relief granted at source from 1 January 2002)

   
     

First-Time Buyer (for 7 yrs)

   

Single Max

2,000

 

Married Max

4,000

 

Widow(er) Max

4,000

 

     

Non-First Time Buyer

   

Single Max

600

Married Max

1,200

 

Widow(er) Max

1,200

 

     

Rent Relief

   

Under 55 – Single

400

 

Under 55 - Married/Widow(er)

800

 

Over 55 – Single

800

 

Over 55 - Married/Widow(er)

1,600

 

     

One income Family Credit

   

Spouse caring for children, the aged or handicapped

900

 

     

Dependent Relative

80

 

     

INCOME TAX RATES

     

Single & Widowed Persons: No Dependent Children

€

 

20% on first

35,400

 

41% on balance

   
     

Single & Widowed Persons: Dependent Children

   

20% on first

39,400

 

41% on balance

   
     

Married Couples: One Income

   

20% on first

44,400

 

41% on balance

   
     

Married Couples: Two Incomes*

   

20% on first

70,800

 

41% on balance

   
   

Interest on Tax Paid Late – 1% per month

   
   

Interest on Tax Repaid – 0.5% per month

   
   

* Excess over Euro 44,400 non transferable between spouses

   
     

Tax Allowance

   

Cost of employing carer for incapacitated individual allowed at marginal rate of tax

50,000

 

   

BENEFIT IN KIND

 
   

Cars - The maximum allowable capital cost for new and secon hand private cars, purchased on or after 1 January 2007, is €24,000.

Cash equivalent – 30% of the original market value of the car. BIK is calculated on 30% of open market car value with reduction for amounts borne by the employee in respect of the car costs.

Reduced where employee pays costs:

Reductions

   

Fuel

4.5%

Insurance

3.0%

Repairs & Service

3.0%

Tax

1.0%

   

The percentage which is now applied to the open market value (OMV) of the car will be determined based only on business mileage, as follows:-

Business Mileage ------------% of OMV

15,000 or less -----------------30%

15,001-20,000 ----------------24%

20,001-25,000 ----------------18%

25,001-30,000 ----------------12%

Over 30,000 --------------------6%

Private use of Employer Van:-

The charge to BIK for the private use of an employer's van can be calculated at 5% of the original market value of the van.

   

Preferential Loans

 
   

Specified rate for home loans

5.3%

Specified rate for other loans

13%

 

Small Benefits in Kind

An Employer can provide an employee with a small benefit to a value not exceeding €250 without applying PAYE and PRSI to that benefit.

 

 

PRSI

       
 

Contribution
Rate

Earnings
Ceiling

€

 

Social Insurance

     

Employer Class A1

     

Employer Contribution (including training fund levy)

10.75% (1)

No Ceiling

 

Employee Class A1
(Earning over €356 per week or equivalent)

     

PRSI

(First €127 of weekly earnings exempt)

4%

50,700

 

Health Contribution

    2% (2)

No Ceiling

 

Total for Employee

6%

   

Self Employed Contributions

     

PRSI

   3%(3)

No Ceiling

 

Health Contribution

    2% (2)

No Ceiling

 

Total

5%

   

(1) 8.5% where weekly earnings are less than €356

(2) Does not apply where aggregate earnings are less than €500 p.w.

(3) 3% subject to minimum payment of €254

       
   

CORPORATION TAX

 
   

Standard Rate on Trading Income*

12.5%

 

   

Investment/Rental Income

25%

   

Manufacturing Rate

10%

   

*Reduced rate of 12.5% where total trading income does not exceed Euro 253,948

 
   

The payment date for preliminary tax, which must be at least 90% of the final liability, is brought forward to one month before the end of the accounting period over a transitional period of five years. Preliminary tax is based on the current year's tax liability. However, small companies can base their preliminary tax payment on the previous year's liability.

A small company is a company with a Corporation Tax liability of less than €200,000 in the preceeding year. For accounting periods ending on or after 1 January 2008 and before 1 January 2008 preliminary tax (90%) is payable in two installments. The first installment is due one month before the end of the accounting period as follows:-

   

Accounting Periods Ending on or after

Percentage current liability

   

1 January 2006

54%

1 January 2007

72%

1 January 2008 and after

90%

Accounting Periods Ending on or after

% of previous year's liability (Small Companies)

1 January 2006

60%

1 January 2007

80%

1 January 2008 and after 100%

The second payment of preliminary tax to bring the total preliminary tax payment up to 90% of the current year's liability is due within 5 months and 28 days after the end of the accounting period.

The final balance of tax (10%) is payable nine months after the end of the accounting period.

   

Capital Gains Tax

 
   

Per Individual

 
   

Annual exemption

€1,270

   

Rate

20%

   

Retirement Relief exemption limit

€750,000

 

The due date for payments of Capital Gains Tax for disposals of 1 January and 30 September is 31 October in the same tax year. Where the disposal is between 1 October and 31 December the due date for payment is 31 January the following tax year.

 

Capital Allowances:-

Motor Vehicles and Plant & Machinery

Year 1 - 8

Writing down allowance = 12.5% p.a.

 

 

VAT

   
 

€

With effect from 1 January 2007

 

     

VAT Registration Thresholds:

   

Supply of taxable goods in Ireland.

(90% of turnover must be from the sale goods for this threshold to apply)
See note 1.

70,000

 

Provision of taxable services in Ireland
See note 1.

35,000

 

Note 1.

These thresholds do not apply to traders established outside Ireland who must register irrespective of turnover.

Note 2.

A registration threshold of €41,000 also applies to certain persons acquiring goods in Ireland from other EU member states (other than new means of transport or goods subject to a duty of excise).

Note 3.

A registration threshold of €35,000 applies in relation to "Distance Selling" – i.e. persons supplying certain goods to non-taxable persons in Ireland from other EU member states.

     

VAT Rates:

   

21%

This standard rate applies to all supplies not chargeable at other rates.

Examples - Cars, Petrol / Diesel, Telephone services, soft drinks and alcohol, computers and software, consultancy services.

13½%

 

Examples - Heating fuel, electricity, restaurant services, newspapers, hotel and B&B lettings, property.

0%

 

Examples - Exports, certain food and drink, oral human medicine, books, children’s clothing and footwear.

5.2%

 

Examples - Livestock, live greyhounds , hire of horses and the "Flat Rate Addition" .

     

VAT Exempt Services

 

Examples - Financial, insurance, educational, training, medical, optical, and dental and passenger transport services.

     

Gift/Inheritance Tax

   
Capital Aquisitions Tax    

Tax Rates

   
     

Threshold amount

Nil

 

Excess

20% for gifts and inheritances

 

Thresholds

€

 

Parents to child/spouse

521,208*

 

Blood relative

52,121*

 

Others

26,060*

 

*Threshold amount for 2008 increased in line with inflation. Details now shown from January 2008.

   

No gift/inheritance tax is payable between spouses.

   

Annual gift exemption €3,000 per individual.

   

 

 

Capital Duty

 

 

with effect from 2nd December 2004 0.5%

Stamp Duty

       
        %

Main Rates

     

 

Stocks & Shares

     

1

       

Land/Commercial Buildings/Goodwill

       
 

€

   

Consideration

0 – 10,000

 

Exempt

  10,001-20,000     1%

Consideration

20,001-30,000

2%

  30,001-40,000     3%
 

Consideration

70,001-80,000

5%

  101,001-120,000     7%

Consideration Over

120,001-150,000

 

8%

  Over €150,000     9%

Residential Property

Consideration

 

First
Time
Buyer

Other Owner
Occupiers

Investors – New & Second hand Properties

Up to €122,000

 

Exempt

Exempt

Exempt

€127,001–€190,500

 

Exempt

7%

7%

€190,501–€254,000

 

Exempt

7%

7%

€254,001–€317,500

 

 

Exempt

7%

7%

€317,501–€381,000

 

Exempt

7%

7%

€381,001–€997,000

 

  Exempt

7%

7%

Balance over €997,000

  Exempt 9% 9%
         

Payment Deadlines

 
   

Pay Balance of tax due for 2008

31 October 2008

Preliminary Tax Payment for 2008

31 October 2008

File Personal Tax Return for 2007

31 October 2008

CGT Diaposals made between 1 January 2008 & 30 September 2008

31 October 2008

CGT Disposals made between 1 October 2008 & 31 December 2008

31 January 2009

Final Company Tax Payments

5 months and 28 days after year end

Company Tax Returns

9 months after year end

 

 

PENSIONS

Pension Premium Contribution level deductible for tax purposes are as follows:-

Age ---------------------------%

Up to 30 -------------------15%

30 to 39--------------------20%

40 to 49--------------------25%

50 to 54--------------------30%

55 to 59--------------------35%

60 and over----------------40%

There is a cap of €254,000 p.a. on the amount of earnings on which tax relief may be obtained for contributions by individuals to Retirement Annuity Contracts (RACs) and Personal Retirement Savings Account (PRSA).

 

E & OE

* Pension Tax Relief outlined are those currently applying 01/01/2008

 
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