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Generic Tax Name Personal income tax - Universal Social Charge (USC)
Tax name in the national language Universal Social Charge
Tax name in English Universal Social Charge (USC)
Member State IE-Ireland
Tax in force since 2011/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other
Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other
Social security contribution Employers
Employees
Other
 
Legal base

Part 18D of the Taxes Consolidation Act, 1997 as amended by later Finance Acts
 
Who sets
The tax rate is set by



The tax base is set by



The reliefs are set by




Comments
 
Beneficiary





Comments
 
Geographical Scope

Republic of Ireland.
 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments
Employment incomes of married couples are Taxed jointly
Taxed separately
Comments

Comments

All individuals  resident in Ireland and persons not resident in Ireland but deriving income  from Irish sources.    

The Universal Social Charge is a tax payable on gross income, including notional pay, after any relief for certain trading losses and certain capital allowances, but before pension contributions.

All individuals are liable to pay the Universal Social Charge if their gross income exceeds the threshold of €12,012 p.a.
 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments
Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Domstic income and worldwide income.
Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments

Comments
 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments

Deductions 

  • Any expense payments which are only a recompense for expenses incurred in the performance of duties, are not subject to the Universal Social Charge.
  • Normal revenue expenses directly associated with the performance of the trade can be deducted in calculating the taxable profit figure upon which the Universal Social Charge is chargeable. 
  • Normal business expenses incurred in carrying on a trade are deductible before the Universal Social Charge is calculated. This includes allowances for capital expenditure incurred on providing certain items for the purposes of the trade, such as
    • Plant and machinery
    • Vehicles used for business purposes
    • Certain types of buildings, such as factories or farm buildings
  • Capital allowances (other than those used to create or increase a loss under section 392 TCA 1997) must actually be used in a tax year to be deductible. Only standard rate capital allowances are deductible. Apart from farm buildings, capital allowances that are written off over accelerated 7-year periods are not allowed. Any capital allowances due to people that do not actively carry on a trade are not deductible. Therefore, lessors and other passive investors, such as non-active partners in a partnership trade, will pay the Universal Social Charge on gross income before the deduction of capital allowances. Appendix C contains details of both deductible and non-deductible allowances in respect of the different types of buildings.
  • Losses other than those arising from the carrying on of a trade or profession are not deductible before Universal Social Charge is charged. Nor can trading losses arising in a tax year reduce other non-trading income in that year. Where unused trading losses are carried forward, only that part of the losses that is actually used to reduce taxable income from the same trade in the tax year to which they have been carried forward is deductible.
Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments

Alimony obligations can be deducted from the tax base by the payer.  However, alimony received by an individual forms part of that person's tax base.
Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

Allowances

There are no allowances in respect of the Universal Social Charge.

However, Individuals whose total income in the year does not exceed €60,000 and are either (i) aged 70 or over, or (ii) in possession of a full medical card only pay Universal Social Charge at a maximum rate of 3.5%.
Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
There are tax credits for:

















Comments

Credits

There are not credits in respect of the USC
Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments
Exemptions
The following income is exempted from income tax























Comments

Exemptions

Where an individual’s total income for a year does not exceed €12,012.

All Dept. of Social Protection payments/social welfare type payments.   

Payments that are made in lieu of Dept. of Social Protection payments such as Community Employment Schemes paid by the Department of Jobs, Enterprise and Innovation or Back to Education Allowance paid by the Department of Education and Skills.

Income already subjected to DIRT (Deposit Interest already subject to a retention tax)

Comments
 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From  0.00  EUR/Natcur
To  12,012.00  EUR/Natcur
Rate: 1.50 %
Bracket 2 From  12,013.00  EUR/Natcur
To  17,576.00  EUR/Natcur
Rate: 3.50 %
Bracket 3 From  17,757.00  EUR/Natcur
To  70,044.00  EUR/Natcur
Rate: 7.00 %
Bracket 4 From  70,045.00  EUR/Natcur
To   EUR/Natcur
Rate: 8.00 %
Comments

Individuals are liable to pay the Universal Social Charge if their gross income exceeds the threshold of €12,012 p.a.

The standard rates of Universal Social Charge are:

  • 1.5% on the first €12,012
  • 3.5% on the next €5,564
  • 7% on the next €52,468.
  • 8% on income over €70,044

If an individual has self -employed income in excess of €100,000 per annnum they are subject to an 11% rate on the self-employed income in excess of €100,000.  

In addition, these standard rates are modified in certain circumstances. In the case of individuals whose total income does not exceed €60,000 and are either (i) aged 70 or over, or (ii) individuals who hold full medical cards, the 3.5% rate applies to all income over €12,012.
Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments
Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments
Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income: 3.0 %
A tax surcharge:
Comments

There is a surcharge of 3% on individuals who have income from non-payroll sources that exceeds €100,000.
Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income
Owner-occupied immovable property
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits 41.0 %
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property 33.0 %
Capital gains on movable property
Inheritance 33.0 %
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments
Withholding taxes
The tax is withheld when paid to residents on: Dividends: 20.00 %
Final Creditable
Interests from governments bonds:
Final Creditable
Interests from corporate bonds:
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits:
Final Creditable
Comments

Comments
 
Tax due date
  • Self-employment income: Not later than 31 October of each tax year.
  • Employment/pension: Weekly, fortnightly, or monthly deductions at source from emoluments (wages, salaries etc.)  along with Income Tax and SIC.
 
Tax collector

USC on salaries, wages and pensions is deducted by Employer.  On other personal income, USC is also charged on a current year basis.  The income tax year commences on January 1st.      

Non employment income  (self-assessed) individuals will make a payment of Universal Social Charge along with their preliminary tax payment by 31 October with any balance payable by 31 October in the following year.
 
Special features

The USC is an individualised charge and there is no special treatment for married couples or civil partners.
 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 3,814.00 EUR 2.18
2011 3,407.00 EUR 1.96

Comments