Tax Administration

Registration for Tax

A new resident is obliged to register with the Department of Social Protection in order to be issued with a personal public service (PPS) number. Once this number has issued, it is necessary to register with Revenue. Revenue issue a determination in respect of tax credits. They will issue a standard rate cut off point to state the point at which standard rate (20%) ceases to apply

The certificate enables employers to ensure a deduction of a constant PAYE amount to approximate to the tax liability for the year. If the requisite certificates are not to hand, the employee may be obliged to deduct emergency tax at a higher rate in the absence of a certificate of tax credits. Once the certificate issues an adjustment or refund will be made to reimburse any overpayment.

Self Assessment

A person is obliged to make a self-assessment return of income tax, if his income is not wholly dealt with within the PAYE system. Revenue may request a return in any case even if the income is fully dealt with by way of PAYE. The self-assessment return may reclaim excess tax paid by reason of allowances credits et cetera that were not factored into the certificate of tax credits.

Where the self-assessment obligation arises, the taxpayer is obliged to make a return and pay tax where due. There are two principal forms. One form applies to persons whose income is principally employment-based. The other more detailed form applies to persons who have trading income.

The tax return must generally be made by 31st October in the year following the tax year concerned. Where, as is mandatory in nearly all cases, the return is made online through ROS (revenueonline system) the date is extended to mid-November. In addition, certain percentages of the ultimate liability must be paid by certain dates during the tax year.

Revenue may issue a tax return form to an individual regardless of whether his income is fully dealt with under PAYE. A return should be made if required even in the case of a person who believes his full tax liability is dealt with under PAYE.

Payment of Tax

To avoid interest,  certain amounts by way of preliminary tax must be paid in the current year. This sum must be paid by 31st October or the date for the tax return for the previous year.

This is either

  • 90% of the final tax liability for the current year
  • 100% of the final tax liability for the preceding tax year
  • 105% of the final tax liability for the penultimate year; this latter option is permitted only where Taxes paid by direct debit;  it does not apply where the tax payable in that second last preceding year was zero.

The obligation to pay preliminary tax is not dependent on a notice. The balance of tax must be paid by 31st of October in the following year with the filing of the tax return.

Interest arises if the payment is not made when due. There is a surcharge if the tax return is not made when due. This is 5% of the income tax liability up to €12,695 provided the return is made within two months of the due date. It is 10% of the income tax liability up to €63,485 for the return is more than two months late.

Capital Gains Tax

Capital gains tax for the disposal of assets between 1st  January and 30th November require preliminary payment of tax by 15 December in that year. In the case of disposals in the month of December, the tax is payable by 31st January in the following year.

A person’s main residence, his principal private residence, is exempt from Irish capital gains tax provided the taxpayer resides there during the full period of ownership. It is possible to elect to treat a particular residence as a principal private residence for capital gains tax purposes with the consent of the Revenue Commissioners.

The self-assessment return also deals with capital gains tax in the relevant period. The ultimate capital gains tax return and computation is made as part of the income tax return.