Cork

๐Ÿ’ฐ

Taxes

Overview of income tax, VAT, and other applicable taxation systems in Ireland for residents and workers.

Sections

1. Income Tax (PAYE and Self-Assessment)

Overview

Income tax is the primary tax on earnings in Ireland. It applies to income from employment, self-employment, pensions, rental income, and other sources. The system is progressive, meaning higher earners pay a higher percentage of their income in tax.

Rates (2023)

  • Standard Rate (20%): Applies to income up to โ‚ฌ40,000 for single individuals (higher thresholds for married couples or single parents).
  • Higher Rate (40%): Applies to income above the standard rate threshold.

Tax Credits

Tax credits reduce the amount of tax you owe. Common credits include:

  • Personal Tax Credit: โ‚ฌ1,775 for single individuals.
  • Employee Tax Credit: โ‚ฌ1,775 for employees.
  • Home Carer Tax Credit: โ‚ฌ1,700 (if applicable).

How Itโ€™s Calculated

  • Your employer deducts income tax directly from your salary under the Pay As You Earn (PAYE) system.
  • Self-employed individuals or those with additional income must file a self-assessment tax return annually.

Payment Procedures

  • PAYE Employees: Taxes are automatically deducted by your employer and sent to Revenue.
  • Self-Employed: File a tax return via the Revenue Online Service (ROS) and pay any outstanding tax by October 31st of the following year (or mid-November if filing online).

Deadlines

  • PAYE Employees: Taxes are deducted monthly.
  • Self-Assessment: File and pay by October 31st (or mid-November for online submissions).

Local Considerations

  • Cork has a thriving tech and pharmaceutical industry, so many professionals may have stock options or bonuses. These are taxable and should be declared.
  • Immigrants should apply for a Personal Public Service (PPS) Number to register for tax purposes.

2. Universal Social Charge (USC)

Overview

The USC is a separate tax on gross income, introduced to fund public services. It applies to most income, with exemptions for those earning less than โ‚ฌ13,000 annually.

Rates (2023)

  • 0.5% on income up to โ‚ฌ12,012.
  • 2% on income from โ‚ฌ12,013 to โ‚ฌ22,920.
  • 4.5% on income from โ‚ฌ22,921 to โ‚ฌ70,044.
  • 8% on income above โ‚ฌ70,044.

Payment Procedures

  • Deducted automatically under PAYE for employees.
  • Self-employed individuals include USC in their annual tax return.

3. Pay Related Social Insurance (PRSI)

Overview

PRSI is a social insurance contribution that funds benefits like unemployment payments, maternity leave, and pensions.

Rates

  • Employees: 4% of gross income.
  • Self-Employed: 4% of gross income, with a minimum annual contribution of โ‚ฌ500.

Payment Procedures

  • Deducted automatically for PAYE employees.
  • Self-employed individuals pay PRSI as part of their annual tax return.

4. Value-Added Tax (VAT)

Overview

VAT is a consumption tax applied to goods and services. Businesses collect VAT from customers and remit it to Revenue.

Rates

  • Standard Rate: 23% (applies to most goods and services).
  • Reduced Rates: 13.5% (e.g., tourism, restaurants), 9% (e.g., newspapers, certain hospitality services), and 0% (e.g., most food, childrenโ€™s clothing).

Payment Procedures

  • Businesses must register for VAT if their turnover exceeds โ‚ฌ37,500 (services) or โ‚ฌ75,000 (goods).
  • VAT returns are filed bi-monthly via ROS.

Local Considerations

  • Corkโ€™s tourism and hospitality sectors often operate under reduced VAT rates, which may benefit small business owners.

5. Local Property Tax (LPT)

Overview

The LPT is an annual tax on residential properties, based on the market value of the property.

Rates

  • Rates vary depending on the propertyโ€™s value band. For example:
    • Properties valued up to โ‚ฌ200,000: โ‚ฌ90 to โ‚ฌ225 annually.
    • Properties valued between โ‚ฌ200,001 and โ‚ฌ262,500: โ‚ฌ225 to โ‚ฌ315 annually.

Payment Procedures

  • Property owners must self-assess the value of their property and pay the LPT via ROS.
  • Payment options include a lump sum, monthly direct debit, or deduction from salary.

Deadlines

  • Annual payment is due by January 1st.

Local Considerations

  • Cork City Council may adjust the LPT rate by up to 15% annually, so check for updates.

6. Capital Gains Tax (CGT)

Overview

CGT applies to profits from the sale of assets, such as property or shares.

Rate

  • 33% on the gain (profit) from the sale.

Exemptions

  • The first โ‚ฌ1,270 of gains per year is exempt.
  • Gains from the sale of your primary residence are usually exempt.

Payment Procedures

  • File a CGT return via ROS and pay by December 15th for gains made between January and November, or by January 31st for gains made in December.

7. Capital Acquisitions Tax (CAT)

Overview

CAT applies to gifts and inheritances.

Rate

  • 33% on the value above the tax-free threshold.

Thresholds (2023)

  • Group A (e.g., parent to child): โ‚ฌ335,000.
  • Group B (e.g., sibling, niece/nephew): โ‚ฌ32,500.
  • Group C (others): โ‚ฌ16,250.

Payment Procedures

  • File a CAT return via ROS and pay by October 31st of the following year.

8. Stamp Duty

Overview

Stamp duty is a tax on property transactions and certain legal documents.

Rates

  • Residential property: 1% on the first โ‚ฌ1 million, 2% on the excess.
  • Non-residential property: 7.5%.

Payment Procedures

  • Paid by the buyer via ROS when registering the property.

Key Resources and Government Offices

  1. Revenue Online Service (ROS)

    • Website: www.revenue.ie
    • Use ROS to register for taxes, file returns, and make payments.

  2. Cork Tax Office

    • Address: Revenue Commissioners, Blackpool, Cork.
    • Phone: +353 1 738 3660.
    • Services: Assistance with tax queries, PPS numbers, and local tax issues.

  3. Citizens Information Centre (Cork)

    • Address: 80 South Mall, Cork City.
    • Website: www.citizensinformation.ie
    • Services: Free advice on tax, social welfare, and other public services.

  4. Local Accountants and Tax Advisors

    • Cork has many professional accountants who can assist with tax compliance, especially for self-employed individuals or businesses.

Tips for Immigrants

  • PPS Number: Apply for this immediately upon arrival, as itโ€™s required for tax registration.
  • Double Taxation Agreements: Ireland has agreements with many countries to avoid double taxation. Check if your home country is included.
  • Tax Refunds: If you overpay tax (e.g., due to emergency tax rates), you can claim a refund via ROS.

By understanding these taxes and utilizing the resources available, residents and immigrants in Cork can effectively manage their tax obligations and avoid penalties.