We provide a wide range of free and easily accessible taxation resources for you to be informed. For anything else, do not hesitate to contact us for a free consultation
How is your tax calculated?
Your employer applies PAYE and USC tax based on your employee tax credit certificate. If Revenue does not have up-to-date information on your personal circumstances (marital status, dependents, etc.), you might get an incorrect allocation of tax bands and credits
Key Tax Dates / Taxation Calendar
|Return and payment dates for the month of January|
Return and payment dates for the month of February
|Return and payment dates for the month of March|
Return and payment dates for the month of April
Return and payment dates for the month of May
Return and payment dates for the month of June
Return and payment dates for the month of July
|Return and payment dates for the month of August
|Return and payment dates for the month of September|
|Return and payment dates for the month of October|
|Return and payment dates for the month of November|
|Return and payment dates for the month of December|
Nearly all income is liable to tax. Tax on income that you earn from employment is deducted from your wages by your employer on behalf of Revenue. This is known as Pay As You Earn (PAYE). The amount of tax that you have to pay depends on the amount of the income that you earn and on your personal circumstances. There are a range of income tax reliefs available that can reduce the amount of tax that you have to pay.
The Universal Social Charge (USC) is a tax on your income. It is charged on your gross income before any pension contributions or PRSI. You cannot use tax credits or tax relief (except for certain capital allowances) to reduce the amount you must pay.
Income that is assessed for tax
Under the PAYE system, income tax is charged on all wages, fees, perks, profits or pensions and most types of interest. Tax is payable on earnings of all kinds that result from your employment (including for example, bonuses, overtime, non-cash pay or ‘benefit-in-kind’ such as the use of company car, tips, Christmas boxes and so on).
Money you get which is not liable to income tax may be liable to other taxes. If you get gifts or inheritances, you may have to pay Capital Acquisitions Tax. If you sell assets such as property or shares you may have to pay Capital Gains Tax.
The first part of your income, up to a certain amount, is taxed at 20%. This is known as the standard rate of tax and the amount that it applies to is known as the standard rate tax band. The remainder of your income is taxed at the higher rate of tax, 40% in 2021.
Income tax Ireland deadline
The income tax return deadline for 2019’s income is the 31st of October 2020. If you file and pay your taxes online, the deadline is usually mid-November. But Revenue has decided to further extend this deadline to Thursday, 10 December 2020.
Value Added Tax (VAT) is a tax charged on the sale of goods or services and is included in the price of most products and services that we use every day.
Who pays VAT?
VAT is a tax on consumer spending so everyone who pays for good and services pays VAT. It is built into the cost of many commonly consumed items such as clothing and petrol, so you don’t see what percentage of VAT you are paying. However, when you are buying items such as computers, electricity and professional services, you will see the amount of VAT and the rate at which you are being charged on your bill.
Rates of VAT
VAT is charged at different rates for various goods and services. You can get an extensive list of VAT ratings from the Revenue Commissioners.
23% is the standard rate of VAT. All goods and services that do not fall into the reduced rate categories are charged at this rate. They include alcohol, audio-visual equipment, car parts and accessories, CDs, computers, consultancy services, cosmetics, detergents, diesel, fridges, furniture and furnishings, hardware, jewellery, lawnmowers, machinery, medicines (non-oral), office equipment, pet food, petrol, paper, tobacco, toys, tools, washing machines, bottled water.
13.5% is a reduced rate of VAT for items including fuel (coal, heating oil, gas), electricity, veterinary fees, building and building services, agricultural contracting services, short-term car hire, cleaning and maintenance services.
9% is a special reduced rate for newspapers and sporting facilities. This also includes e-books and electronically supplied newspapers. As announced in Budget 2021, the VAT rate for the hospitality and tourism sector decreased from 13.5% to 9% from 1 November 2020 to 31 December 2021. This applies to various entertainment services such as admission to cinemas, theatres, museums, fairgrounds and amusement parks. VAT at 9% also applies to hairdressing and certain printed materials such as brochures, maps and programmes.
4.8% is a reduced rate of VAT specifically for agriculture. It applies to livestock (excluding chickens), greyhounds and the hire of horses.
0% (Zero) VAT rating includes all exports, tea, coffee, milk, bread, books, children’s clothes and shoes, oral medicine for humans and animals, vegetable seeds and fruit trees, fertilisers, large animal feed, disability aids such as wheelchairs, crutches and hearing aids.
CGT is a tax you pay on any capital gain (profit) made when you dispose of an asset. It is the chargeable gain that is taxed, not the whole amount you receive. The chargeable gain is usually the difference between the price you paid for the asset and the price you disposed of it for. CGT is payable by the person making the disposal.
An asset is something of value that can be converted into cash. You have disposed of an asset if you have:
- sold it
- gifted it
- exchanged it
- got compensation or insurance for it.
What do you pay CGT on?
You must pay CGT on gains made from the sale, gift or exchange of an asset such as:
- land (including development land)
- buildings (houses, apartments, or commercial property)
- shares in companies (Irish-resident or non-resident)
- assets that have no physical form such as goodwill, patents and copyright
- currency (other than Irish currency)
- assets of a trade
- foreign life insurance policies and offshore funds
- capital payments (in certain situations).
You might also have to pay CGT on gains for other types of assets. Examples of these assets include antiques, paintings and jewellery.
Rate of CGT
The rate of CGT is 33% for most gains. There are other rates for specific types of gains. These rates are:
- 40% for gains from foreign life policies and foreign investment products
- 15% for gains from venture capital funds for individuals and partnerships
- 12.5% for gains from venture capital funds for companies.
Venture capital is money that is invested in a start-up company or small business
Tax credits are used to reduce the amount of tax you pay.
Personal Tax Credit
Everyone resident in Ireland is entitled to a Personal Tax Credit (You are due a Personal Tax Credit if you are resident in Ireland). The Personal Tax Credit you get depends on whether you are:
- married or in a civil partnership
- widowed or a surviving civil partner
- divorced or a former civil partner
Additional tax credits
Depending on your personal circumstances, you might also be entitled to additional tax credits, for example if you are:
- a Pay As You Earn (PAYE) employee
- a home carer
- aged 65 years or older
How tax credits work
If you are an employee, then your tax credits will be shown on your Tax Credit Certificate. Your employer will be notified of your total tax credits. They will not be given a breakdown of your tax credits, only the total amount. Your employer will use this to calculate the amount of tax to deduct from your weekly or monthly pay.
Under the Pay As You Earn (PAYE) system, tax credits are spread evenly throughout the year. If you are working for the full year, depending on how often you get paid, your tax credits will be divided into:
- 52 weekly equal amounts
- 12 monthly equal amounts
If you have a Second or multiple jobs, you can divide your tax credits between them.
Unused tax credits
Unused tax credits in a pay week or month are carried forward to later pay period(s) in the same tax year.
- get a refund for unused tax credits
- carry unused tax credits into another tax year