Taxation system ireland

For additional info by Ireland Tax Office, see www.revenue.ie.

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Location

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Glance• Capital (and largest city): Dublin• Official language(s): Irish, English • Ethnic groups: 87% Irish 13% Other• Demonym: Irish• Government: Constitutional republic, • Independence from the United Kingdom:

Declared 24 April 1916 - • Became a republic: 18 April 1949 • Area: Total 70,273 km2 (119th) 27,133 sq mi


Glance

• GDP (PPP) 2009 estimate - Total $175.055 billion

• GDP (nominal) 2009 estimate - Total $227.781 billion

• Currency: Euro (€) • Drives on the: left • Internet TLD: .ie • Calling code: 353

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Taxation System

• The system of taxation in the Republic of Ireland is broadly similar to the system of taxation in the United Kingdom.

• Employees pay “Pay-As-You-Earn” (PAYE) taxes based on their income.

• Large proportion of Central Government Tax Revenue-

Vat & Excise Duty.


List of Tax in Ireland

1. Income Tax2. Pay Related Social

Insurance (PRSI)3. Capital Gains Tax4. Value Added Tax

(VAT)5. Stamp Duties6. Capital Acquisition

Tax

7. Corporation Tax8. Withholding Tax9. Excise10.Motor Tax11.Local Tax12.Corporation Tax


Income Taxes

• Tax rates for an individual in 2009 are 20% and 41%.

• Standard corporate tax rate is currently fixed at 12.5%.

• Income Levy:-1) 1% for annual income up to EUR 100,000, 2) 2% for income between EUR 100,001- EUR 250,120

and 3) 3% for income above EUR 250,120.


Income Tax for Individual

• Liability: Income as an employee and income as a self-employed person, foreign resident who is employed in Ireland pays tax only on income earned in Ireland.

• Irish resident: residency of more than 183 days a year in Ireland or residency of more than 280 days over a period of two years.

• Tax Rates for Individual:

Tax base (EUR) Tax (%)

0 - 36,400 20%

36,401 and over 41% on base exceeding 36,400


Tax Exempt Income• Income from horse breeding and racing.• Income from copyright on works defined as having an

artistic or cultural value.• Shares distributed to an employee by his/her employee

according to an approved plan, subject to a limit.• Income from forestry works.• Dividend received by a resident Irish company from

another Irish company.• For individuals, gain from the sale of principal residence.• For individuals ,an annual EUR 1,270 tax exemption from

capital gain.• Certain leasing income of farm land.


Ireland Capital Gains• Rate of tax payable on capital gains in 2009 is 22%.• A person neither resident nor ordinarily resident in

Ireland is only liable to CGT on gains from:1) Land and buildings in Ireland,2) Minerals or mining rights in Ireland,3) Shares (not quoted on a stock exchange) deriving their value from any or all of items.5) Assets in Ireland used for the purpose of a business carried on in Ireland.


• There are exemptions from capital gains in the following cases, among others, subject to certain conditions: 1) The first EUR 1,270 of the capital gain. 2) Gains from lotteries and betting. 3) The sale of a main residential asset. 4) National Installment Savings bonuses

and Prize Bond prizes

Exemption from Capital Gains


• Taxation of EmployeeThe employer is obligated to deduct tax at source from an employee and to make additional contributions to social security, known as PRSI (Pay Related Social Insurance).

The rates are:• Employer - 10.75%• Employee - 6%• Self employed - 5%

Deduction of Tax at Source


VAT Rates

Particulars Tax Rates

Books 0%

Labour-intensive services, Restaurant meals and Bakery products

13.5%

Supply of livestock and greyhounds 4.8%

Agriculture Sector 5.2%

• VAT is charged on assets and services in Ireland as well as on imports into Ireland. • The minimum turnover for registering with the VAT authorities is: 1) EUR 37,500 (for services) and 2) EUR 75,000 (for goods).• VAT returns are made once every two months.


• The following products and services are exempt from VAT:

1. Export.2. Health and medical services.3. Children's clothing.4. Insurance and banking services.5. Food.6. Agricultural fertilizers.Stamp Duty

Stamp duty of 1%-9% is payable in the case of certain documents. The maximum rate of tax is 9%.

Transactions Exempt from VAT


Inheritance tax/gift tax• Tax is payable on an inheritance in Ireland, and on gifts.

The tax is known as CAT (Capital Acquisition Tax).• When either the donor of the gift or the recipient of

the gift is an Irish resident, the tax is also applicable to overseas assets.

• The tax is payable at 22%, over and above the amount of the exemption.

• The amount of the exemption varies between EUR 27,127 and EUR 542,544.

• The closer the relationship between the donor and the recipient, such as in the case of a spouse, son or daughter, the greater the sum exempt.


Tax Deductions

Class of Relief Amount - EUR

Basic credit 1,830

Exemption for a married couple 3,660

Exemption limits for a senior citizen 20,000

Single parent 1,830

Rent on a residential apartment 4,000

Medical insurance at source

Payment to an approved pension scheme Subject to ceiling

Mortgage interest 20%-25% For first time buyers

The following amounts are subject to the definitions in law.


Depreciation Expenses• The straight-line method is the usual method

of depreciation.

Asset Annual Depreciation (%)

Computers 12.5

Building 2 - 4

Machinery and equipment 12.5

Hotels 15

Vehicles 12.5Buildings in Inner City Improvements Areas 50%


A Public Limited Liability Company (with the suffix PLC).1. At least 7 shareholders. 2. At least 2 directors and a company secretary. 3. At least one quarter of the share capital must be paid

up. 4. The company may offer shares to the public. 5. The general meeting of the shareholders must be

convened at least once a year. 6. A report, including an auditor's report, must be

submitted to the Registrar of Companies within 60 days of the date of the general meeting.

Company formation and Registration

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• A Private Limited Liability Company (with the suffix LTD.)

1. The maximum number of shareholders - 50. 2. The minimum number of shareholders - 1. 3. The company may not offer shares to the public. 4. The company must have at least 2 directors and a

company secretary. 5. Most companies in Ireland are private companies. 6. The cost of setting up a private company - up to EUR

750.

Company formation and Registration


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Partnerships

• Minimum number of partners - 2. • No upper limit on the number of partners. • There is no need to register with the

authorities. • A signed agreement between the partners is

sufficient. • All partners are jointly and severally liable for

all the liabilities of the partnership.



Finance MinisterMinister for Finance: Brian Lenihan.

In Office: 7 May 2008 – Present

Date of Birth: 21 May 1959 (age 51)


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Taxation system ireland