Taxes in Europe Database v2
Taxes Consolidation Act, 1997 as amended by later Finance Acts.
Republic of Ireland.
Married couples can elect to be taxed under one of the following options:
All persons (whether individuals, legal persons, members of partnerships, bodies corporate or non- corporate bodies) resident in Ireland unless they are non-domiciled and persons not resident in Ireland but deriving income from Irish sources. In the case of a body corporate, income that is chargeable to corporation tax is not chargeable to income tax.
Income considered: Domestic income and worldwide income (subject to double -tax relief)
Income is divided into four categories:
Schedule C: Interest etc., payable out of any public revenue.
Schedule D: Profits or income from property, trades, professions or vocations and all other annual profits or gains not charged under any other schedule and not specially exempted from tax.
Schedule E: Income from employment, including pensions;
Schedule F: Income from distributions.
Ireland moved from income tax allowances to a credit based system since 2001
A single employed income earner is entitled to the basic personal tax credit of €1,650 and the employee (PAYE) tax credit of €1,650. A single self-employed income earner is only entitled to the basic personal tax credit of 1,650.
A married employed couple are entitled to a married tax credit of €3,300 (which is transferable between spouses) and an employed tax credit each if both are working which are not transferable between spouses. a married self-employed couple are only entitled to the married tax credit of €3,300.
With effect from 1 January 2011 civil partners in a registered civil partnership are also entitled to the personal credit of €3,300 (which is transferable between the civil partners).
There are also certain personal reliefs in the form of non-refundable tax credits e.g. the single and married basic personal tax credit, home carer, the incapacitated child tax credit and the single person child carer tax credit.
A special employee tax credit is, in general, granted to taxpayers chargeable to tax under the PAYE (pay-as-you-earn) system.
Widowed persons, blind persons, home-carers and persons aged 65 years or over are entitled to additional credits.
Losses can be carried forward until the loss is exhausted.
In the year in which a loss is incured in a trade or profession, that loss can be offset against the other income of the individual. Trade and professional losses can also be transferred to spouse in the year the loss occurs and when the married couple has selected to be jointly assessed.
With effect from 1 January 2011 Case I and Case II losses can be transferred between civil partners in a registered civil partnership where the civil partners have opted to be jointly assessed.
Where an individual has ceased a trade or a profession, and there is a loss incurred in the final year of business, then that loss can be carried back against the profits of previous three years.
Age Related Exemptions:
Individuals are exempt from income tax if their gross income, before deductions, does not exceed the following limits (from 1 January 2011):
Where incomes rise slightly above the exemption limit, the income above the limit is taxed under the system of marginal relief taxation at a rate of 40%. This applies until the level of income is such that it would be more favourable to be taxed under the normal system of credits and bands.
For single persons, the standard rate applies to the first €33,800 of taxable income and the higher rate on the balance. For widows or single parents the standard rate band is €37,800 while it is €42,800 for a one income married couple jointly assessed to tax. In the case of a two income married couple jointly assessed to tax, the standard rate band can extend to €67,600 depending on the income of the spouse with the lower earnings.
Schedule D: Not later than 31 October of each tax year.
Schedule E/P.A.Y.E.: Weekly, Fortnightly, or Monthly deductions at source from emoluments (wages, salaries, etc) within the scope of PAYE.
Married couples may opt to be assessed in any of the following ways:
a) Assessment of each spouse as a single person.
b) Assessment of the husband or the wife, in respect of the combined incomes of the husband and wife.
c) Separate assessment where the tax payable as at (b) is apportioned between the spouses.
Non-resident persons are liable to income tax in respect of income arising or accruing in Ireland, including the profits of a business carried on in Ireland, and employments exercised in Ireland (subject to the provisions of any tax conventions in force between Ireland and the country in which the taxpayer resides).
The interest on certain securities, in the beneficial ownership of persons not resident or not ordinarily resident in the state, is exempt from income tax.
1. Withholding tax on professional fees.
A withholding tax, at the standard rate (20% in the current tax year) is deducted at source from payments made by certain State and Semi-State bodies (government departments, local authorities, health boards, etc.) for professional services provided by accountants, architects, dentists, doctors, consultants, etc.
2. Deposit interest retention tax (D.I.R.T.).
A final liability tax, at 41%, is deducted at source from interest payable by certain deposit takers (banks, building societies, etc.) to resident account holders. Non-residents, charities, certain permanently incapacitated individuals and certain individuals over 65 years of age are not subject to the tax.
3. Relevant contracts tax.
A withholding tax, at a rate of 35%, is deducted at source from payments made by principal contractors to certain subcontractors in the construction, meat processing and forestry industries.
4. Dividend withholding tax.
A withholding tax at the standard rate of income tax (20% in the current tax year) is deducted at source from dividend payments made by Irish resident companies to Irish resident individuals and certain other shareholders.