This is a tax on company’s profits. The govt. has reached an agreement with the European Commission for the introduction of a 12 ½ % corporate rate on trading income since 1st January 2003. This is seen as quite a low percentage but it is necessary to attract foreign investment in this country.
Capital gains tax is a tax paid on the profits made by a company from selling an asset, e.g. selling property.
Customs duties are taxes levied on certain types of goods imported into this country. This does not apply to imports from the other EU member states. This only applies to countries outside this free trade area.
Employers’ PRSI – This is a compulsory insurance payment levied on firms for every employee they have. Money goes towards unemployment payments, pensions, maternity benefits.
The PAYE system. This is the system of tax collection used in Ireland. Businesses do not have to pay this tax but they must register as an employer with the revenue commissioners. Employers deduct the tax automatically from their employee’s wages and pass it on to the revenue commissioners.
VAT – Is a tax paid by consumers on certain goods and services. When goods/services are bought, VAT is paid. The two main VAT rates are 13 % and 21 ½ %.
The SELF-ASSESSMENT SYSTEM
Applies to all self-employed people (e.g., accountants, carpenters, electricians, painters, taxi drivers). It makes sure that all self-employed people are responsible for the calculation & payment of tax. In October the collector general sends each self employed person a notice of preliminary tax due. These taxpayers must submit their estimated tax to the revenue commissioners by 31st October.
Preliminary tax is the estimated of how much taxpayers think they owe during the tax year.
A tax audit is a detailed look at the taxpayer’s financial records by the revenue commissioners.