Income Taxes

This is a tax on income collected from employees through the PAYE system. All other persons, the self-employed and company directors pay tax through the self-assessment system. There are two rates of income tax in Ireland 20% and 40%. USC and PRSI deductions are also collected at the same time as income tax.

VAT

VAT is a tax of the European Union. It was implemented in Ireland in 1972 on our accession to the European Economic Community. VAT is an extremely important tax and represents around 30% of total tax revenue.

Corporation Tax

Ireland’s headline rate of 12.5% applies to trading income only. The higher rate of 25% applies to all other types of income such as:

  • rents
  • bank interest
  • minerals & petroleum activities
  • dealing in or developing land.

Capital Gains Tax

This is a tax levied on the gain realised on selling assets such as land, buildings and shares. The rate of tax is 33%. There are significant tax planning opportunities available for business owners who wish to exit the business or retire.

Stamp Duty

Is a tax on the execution of documents. Normally the rate of stamp duty is based on the value of the underlying transaction. The tax was originally setup in the Netherlands in 1624 as part of a public competition to come up with a new tax. It was supposed to be a temporary measure but exists in most economies.

Inheritance Tax

This tax officially called Capital Acquisitions Tax (CAT) is charged at a rate of 33%, on persons who receive a Gift or Inheritance. The value of the benefit received is reduced by a relief referred to as a group threshold. The group threshold value depends on the relationship between the giver and recipient of the gift or inheritance. There are additional valuable reliefs available including Agricultural Relief and Business Relief. There is even relief available for Capital Gains Tax paid, by the person making the gift or inheritance, which can be used to offset CAT due by the beneficiaries.

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