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Tax in Ireland

Here’s a simple guide for you on Irish Taxation legislation covering the most common forms of tax governed by the country.

According to the recent global study, it has been found out that, Ireland has the most efficient system for paying taxes in the whole European Union and fourth most efficient in the world. These factors are good enough for you to set up your business in Ireland since where there’s business, there’s a tax. To do business in this country, paying taxes is also an integral part of it. We have broken down the basics in our taxation guide so that you can get the lowdown in the tax system in Ireland.

Now, if you have just moved to Ireland, or are returning to Ireland from abroad, here is something you need to know. The amount of Irish tax that you pay depends upon:

  • Your residency status
  • Where your income comes from
  • Where you carry out the duties of your trade, profession, or employment

This is important when it comes to paying personal taxes. Without further adieu, let’s get into the crux of the matter.

Taxation System in Ireland

When you start your own company in Ireland, it is important to know whether you are a sole trader, a partnership company, and/or a Limited Liability Company. This is required to decide what Tax Reference Number you use and what taxes you shall have to register for.

The tax year in Ireland runs from January 1 to December 31. If you have just moved to Ireland and starting working, you will need to apply for Personal Public Service Number (PPSN). If you are an employee working in a company in Ireland, you must pay your taxes through Pay-As-You-Earn (PAYE) system. If you are a self-employed individual you are taxed underpay and file system. Not that you have understood the overview in Ireland Tax, let’s dive deeper.

Types of Taxes in Ireland

The various types of taxes calculated in Ireland are as follows.

  1. Capital Gains
  2. Corporation Tax
  3. Value Added Tax (VAT)
  4. Customs and Excise Duty
  5. Withholding Tax

They are further explained as below:

1.Capital Gains

Individuals, resident, or ordinarily resident are liable to Capital Gains Tax (CGT) on gains from the worldwide disposal in Ireland. The Capital Gains tax rate is 33%. Lower rates, i.e. 15% for a partnership/individual and 12.5% for a company, may apply in relation to chargeable gains arising on the receipt of a “carried interest”, being a share of profits in certain venture capital funds engaged in research, development or innovation activities.

2.Corporation Tax

Corporation Tax Ireland is charged on the worldwide profits of the company that are tax resident in Ireland and certain profits of the Irish branches are non-resident companies. These profits include both income and capital gains. A company must use the Revenue Online Service (ROS) to file its return and pay any tax due under Mandatory e-Filing and e-Payment.

3.VAT

The VAT in Ireland is imposed on the supply of goods and services provided from or within the state, except if an activity is exempt from the tax. The current VAT rates in Ireland are 0%, 9%, 4.8%, 13.5% and 23%. The rate depends on the goods or services provided. For Example, VAT on professional services is generally 23%, while VAT on services such as construction is generally 13.5%.

4.Customs and Excise Duty

Goods that are imported in Ireland from countries other than European Union are liable to customs duty at appropriate rates specified in the EU’s Combined Nomenclature (CN) Tariff.

Excise duties are charged on mineral oils (including petrol and diesel) used for propulsion or heating purposes, alcohol products (including spirits, beer, wine, cider, and perry) and tobacco products where they are consumed in Ireland.

5.Withholding Tax

Withholding Tax rate in Ireland is applied at 20% on dividends and other distributions made by the Irish resident companies. There are few annual interest payments that are subject to a WHT of 20% including patent royalties. There are few exemptions available under this type of tax depending on the nature and total shareholding of the company.

How can New Companies Register for Tax in Ireland?

In order to register for tax, you must have a Company’s Registration Office (CRO) Number issued by the CRO. When you start a new company, you may appoint a tax consultant who shall inform the Revenue authorities regarding your tax liabilities. If your company is not represented by a tax agent you must submit one of the following applications to pay tax online in Ireland.

  • Form TR2 for Irish resident companies
  • Form TR2 (FT) for foreign companies

If you submit a paper application when you should have submitted an online application, it will not be processed. The paper copy will be returned to you with an instruction to complete the registration process through ROS. Once your company has been registered, you must file all payments and returns online through ROS. You will be given a new Tax Reference Number to use when trading and filing your tax returns.

Our Services

We at Business Setup Worldwide utilize our knowledge to provide companies with a range of effective solution. Our tax services in Ireland include:

  • Identifying tax risks
  • Corporate tax planning and preparation
  • Preparing and filing tax returns
  • Tax compliance
  • Tax consulting and auditing

If you are in need of Tax Services for your Ireland Company, get in touch with us today.