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Click for Irish Taxation 2006

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MAIN PERSONAL TAX CREDITS
 
 

2005
EURO

2004
EURO
Personal Tax Credit    
Single Person 1,580 1,520
Married Couple/Single Parent

3,160

3,040
Widow(er) with dependent child (1)

3,040

3,040
Widow(er) without dependent child

1,980

1,820
Employee (PAYE) (2)

1,270

1,040
Incapacitated Child 1000 500
     
(1) Additional credits due for Widow(er) with dependent children for first 5 years after bereavement    
(2) Not available to proprietory Directors and the self employed    
   
Age Credit    
Single/Widowed Person

205

205
Married

410

410
     
Blind Persons Credit    
Married (both spouses blind)

2,000

1,600
Single or married (one spouse blind)

1,000

800
     
Home Loans – Standard Rate    
*First-Time Buyer    
Single Max

800

800
Married Max

1,600

1,600
Widow(er) Max

1,600

1,600
* Now available for 7 years, previously 5 years    
     
Non-First Time Buyer    
Single Max

508

508
Married Max

1,016

1,016
Widow(er) Max

1,016

1,016
     
Rent Relief    
Under 55 - Single 300 254
Under 55 - Married/Widow(er) 600 508
Over 55 - Single 600 508
Over 55 - Married/Widow(er) 1,200 1,016
     
One income Family Credit    
Spouse caring for children, the aged or handicapped 770 770
     
Dependent Relative 60 60

   
INCOME TAX RATES Return to top
   

Single & Widowed Persons: No Dependent Children

2005
EURO

2004
EURO
20% on first 29,400 28,000
42% on balance    
     
Single & Widowed Persons: Dependent Children    
20% on first 33,400 32,000
42% on balance    
     
Married Couples: One Income    
20% on first 38,400 37,000
42% on balance    
     
Married Couples: Two Incomes*    
20% on first 58,800 56,000
42% on balance

 
     
* Excess over Euro 38,400 non transferable between spouses    
     
Tax Allowance    
Cost of employing carer for incapacitated individual allowed at marginal rate of tax 30,000 30,000
   
BENEFIT-IN-KIND Return to top
 
Cars
Cash equivalent – 30% of original market value. With effect from 1 January 2004, BIK is calculated on 30% of the open market value of the car with no reduction for amounts borne by the employee in respect of the car costs.

The percentage which is now applied to the open market value of the company car will be determined based only on business mileage as follows:

Business Mileage  % of OMV
   
15,000 or lesss 30.0%
   
15,001-20,000 24.0%
   
20,001-25,000 18.0%
   
25,001-30,000 12.0%
   
Over 30,000 6%

Private Use of Employer Van

The charge to BIK for the private use of an employer’s van will be calculated at 5% of the ‘original market value’ of the van with effect from 1 January 2004.

   
Preferential Loans  
   
Specified rate for home loans from 1 January 2004 3.5% (Previously 4.55%)
Specified rate for other loans from 1 January 2004 11% (Previously 11%)

From 1 January 2004 employers are obliged to operate PAYE on non cash benefits provided to employees. These benefits are also liable to PRSI and Health Levy.

The main areas of benefit involved are as follows:

• Company cars.

• Company loans.

• Tax paid vouchers.

• Expense payments on behalf of employees/directors.

Small Benefits in Kind

An employer can provide an employee with a small benefit to a value not exceeding €250 without applying PAYE and PRSI to that benefit.

   
   
PRSI Return to top
 
 

Contribution
Rate

Earnings
Ceiling 2005 Euro

Earnings
Ceiling 2004 Euro

Social Insurance      
Employer Class A1      
Employer Contribution (including training fund levy) – effective 1 March 2002  

10.75% (1)

No Ceiling

No Ceiling

Employee

(Earning over Euro 356 per week or equivalent)  

Class A1
     
PRSI

(First Euro127 of weekly earnings exempt)

4%

44,180

40,420
Health Contribution

    2% (2)

No Ceiling

No Ceiling
Total for Employee

6%

   
 
Self Employed Contributions      
PRSI

   3%(3)

No Ceiling

No Ceiling
Health Contribution

    2% (2)

No Ceiling

No Ceiling
Total

5%

   
 
(1) 8.5% where weekly earnings are less than Euro 356
(2) Does not apply where aggregate earnings are less than Euro 20,800
(3) 3% subject to minimum payment of Euro 254
   
CORPORATION TAX Return to top
   
Standard Rate on Trading Income 12.5% from 1 January 2003
Investment/Rental Income 25%
Manufacturing Rate 10% (only for established qualifying companies)
Special rates apply to dealings in land  

The payment date for preliminary tax, which must be at least 90% of the final liability, is being brought forward, over a transitional period of five years from 2002, to one month before the end of the accounting period. Preliminary tax is based on the current year’s liability. However, small companies can base the preliminary tax payment on the previous year’s liability. 

A small company is a company with a Corporation Tax liability of less than €50,000 in the preceding year. For accounting periods ending on or after 1 January 2003 and before 1 January 2006 preliminary tax (90%) is payable in two instalments. The first instalment is due one month before the end of the accounting period as follows:

Accounting Periods Ending on or after % of current liability  % of previous year's liability (Small Company)
1 January 2004 54 60
1 January 2005 72 80
1 January 2006 and after 90 100

The second payment of preliminary tax to bring the total preliminary tax payment up to 90% of the current years liability is due within 5 months 28 days after the end of the accounting period.

The final balance of tax (10%) is payable nine months after the end of the accounting period.

   
CAPITAL GAINS TAX Return to top
 
Per Individual  
   
Annual exemption Euro 1,270
   
Rate 20%
   
Retirement Relief exemption limit Euro 500,000

The due date for payments of Capital Gains Tax for disposals of 1 January and 30 September is 31 October in the same tax year. Where the disposal is between 1 October and 31 December the due date for payment is 31 January in the following tax year.
   
CAPITAL ALLOWANCES Return to top
 
  Motor Vehicles(1) Plant & Machinery(1) Industrial Buildings Hotels(2)

 

  Year 1 – 8 Year 1 - 8  

Writing Down Allowance 12.5 % per annum 12.5 % per annum 4% per annum 4% p.a

Note 1
These allowances apply to expenditure incurred on or after 4 December 2002, except where a written contract is in place before that date and the expenditure is incurred by 31 January 2003.

Note 2
The special regime of capital allowances of 15% per annum over 7 years was terminated as and from 4 December 2002. Transitional provisions provide for the continued availability of the special regime where an application for planning permission in respect of building work has been made to the local authority on or before 31 December 2004 and the expenditure is incurred by 31 July 2006.

 
Motor Vehicles
Maximum allowable capital cost for new and second hand private cars remains at Euro 22,000.
   
PROPERTY INCENTIVES Return to top
 
A package of tax incentives are available for Urban, Rural and Town Renewal Schemes, Multi Storey Car Parks, Living over the Shop Scheme, Nursing Homes, Student Accommodation, Buildings used for third level purposes, Park & Ride Scheme.

The termination date for incurring qualifying expenditure for the following tax incentive schemes has been extended from 31 December 2004 to 31 July 2006:

Urban, Rural and Town Renewal Schemes, Multi Storey Car Parks, Student Accommodation, Park & Ride Facilities, Hotels and Holiday camps, Holiday Cottages, Living Over The Shop Scheme.

Tax incentives for incurring qualifying expenditure is also available for the following schemes:

Nursing Homes, Private Convalescent Facilities, Childcare Facilities, Private Hospitals,

Sports Injury Clinics.

 

The incentives include the following:
 
  • Commercial Property.
  • Capital Allowances on development of commercial and industrial buildings.
  • Double Rent Allowance for traders.
  • Rates remission.
  • Residential Property.
  • Owner Occupier Allowances on construction and refurbishment.
  • ‘Section 23’ Type Relief for rented residential accommodation.
  • Childcare Facilities.
  • 100% Accelerated Allowances introduced in the first year on childcare facilities.
 
   
PENSIONS
Return to top
 
Contribution level deductible for tax purposes as follows:  
Age %
Up to 30 15
30 to 39 20
40 to 49 25
50 and Over 30

30% also applies to individuals with limited earnings span e.g. athletes, entertainers.

There is a cap of Euro254,000 per annum on the amount of earnings on which tax relief may be obtained for contributions by individuals to Retirement Annuity Contracts (RAC's) and Personal Retirement Savings Account (PRSA). 
   
VAT Return to top
 
 
VAT Registration Thresholds:

Euro
Supply of taxable goods in Ireland.(1)

(90% of turnover must be from the sale goods for this threshold to apply)

51,000
Provision of taxable services in Ireland (1)

25,500

Note 1.
These thresholds do not apply to traders established outside Ireland who must register irrespective of turnover.

Note 2.
A registration threshold of EURO 41,000 also applies to certain persons acquiring goods in Ireland from other EU member states (other than new means of transport or goods subject to a duty of excise).

Note 3.
A registration threshold of EURO 35,000 applies in relation to "Distance Selling" – i.e. persons supplying certain goods to non-taxable persons in Ireland from other EU member states.
     
VAT rates:    

21%

This standard rate applies to all supplies not chargeable at other rates.

Examples - Cars, Petrol / Diesel, Telephone services, soft drinks and alcohol, computers and software, consultancy services.

13˝%

With effect from 1st January 2003  Examples - Heating fuel, electricity, restaurant services, newspapers, hotel and B&B lettings, property.

0%

  Examples - Exports, certain food and drink, oral human medicine, books, children's clothing and footwear.
4.8%   Examples - Livestock, live greyhounds , hire of horses and the "Flat Rate Addition" .
VAT Exempt Services   Examples - Financial, insurance, educational, training, medical, optical, and dental and passenger transport services.
   
GIFT/INHERITANCE TAX Return to top
 
  2005
Euro
2004
Euro
     
Threshold amount Nil Nil
Excess

20% for gifts and inheritances

20% for gifts and inheritances
Thresholds    
Parents to child or minor child of a deceased child/Child to parent* 456,438** 456,438
Blood relative 45,644** 45,644
Others 22,822** 22,822
     
* Applies only to inheritances taken on the date of death.
** Threshold amount for 2005 will be increased in line with inflation. The relevant details will not be available until January 2005.
No gift/inheritance tax is payable between spouses.

Annual gift exemption Euro 3,000 per individual.

   
   
CAPITAL DUTY (with effect from 2/12/2004)                                0.5%
 
STAMP DUTY Return to top
 
       
Main Rates     %
       
Stocks & Shares     1
       
Land/Commercial Buildings/Goodwill      
       
Consideration      
Up to Euro 10,000     Exempt
Euro 10,001 - Euro 20,000     1%
Euro 20,001 - Euro 30,000     2%
Euro 30,001 - Euro 40,000     3%
Euro 40,001 - Euro 70,000     4%
Euro 70,001 - Euro 80,000     5%
Euro 80,001 - Euro 100,000     6%
Euro 100,001 - Euro 120,000     7%
Euro 120,001 - Euro 150,000     8%
Over Euro 150,000     9%
       
Residential Property

Consideration

  FirstTime Buyer Other Owner
Occupiers
Investors – New & Second hand Properties
Up to Euro 127,000   Exempt Exempt Exempt
Euro 127,001 – Euro 190,500   Exempt 3% 3%
Euro 190,501 – Euro 254,000   Exempt 4% 4%
Euro 254,001 – Euro 317,500   Exempt 5% 5%
Euro 317,501 – Euro 381,000   4.5% 6% 6%
Euro 381,001 – Euro 635,000   7.5% 7.5% 7.5%
Over Euro 635,001   9% 9% 9%
   
DEADLINES Return to top
 

Capital Gains Tax:
 
Disposals made between 1 January 2005 & 30 September 2005 31 October 2005
Disposals made between 1 October 2005 & 31 December 2005 31 January 2005
   
Income Tax:  
Preliminary Income Tax Payment for 2005 31 October 2005
Pay Balance of Tax for 2004 31 October 2005
File Personal Tax Return for 2004 31 October 2005
   
Corporation Tax:  
Company Tax Payments
(for accounting periods ending on or after 1 January 2003
)
1. One month before year end
2. Five months and 28 days after year end.
3. Balance of tax to be paid within nine months of year end
Company Tax Returns Nine months after year end
 

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