Limerick

๐Ÿ’ถ

Taxes

Overview of the tax system in Ireland, including income tax, property tax, and VAT for residents and newcomers.

Sections

Income Tax Rates (2023)

Ireland uses a progressive tax system with two main tax bands:

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

Other Deductions from Income

In addition to income tax, employees also pay:

  1. Universal Social Charge (USC):

    • 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.
    • Reduced rates may apply for low-income earners.

  2. Pay-Related Social Insurance (PRSI):

    • 4% of gross income for most employees.
    • PRSI funds social welfare benefits like pensions and unemployment support.

How Income Tax is Calculated

  • Employers deduct income tax, USC, and PRSI directly from your salary under the Pay As You Earn (PAYE) system.
  • Self-employed individuals must calculate and pay their taxes through the self-assessment system.

Tax Credits

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

  • Personal Tax Credit: โ‚ฌ1,775 for single individuals (โ‚ฌ3,550 for married couples).
  • Employee Tax Credit: โ‚ฌ1,775 for employees.
  • Additional credits may apply for single parents, carers, or those with disabilities.

2. Local Property Tax (LPT)

The Local Property Tax (LPT) is an annual tax on residential properties. The amount is based on the market value of your property.

LPT Rates in Limerick

  • LPT rates are set by the Limerick City and County Council, with a base rate determined by the property's valuation band.
  • For example, properties valued between โ‚ฌ200,001 and โ‚ฌ250,000 are taxed at a standard rate of โ‚ฌ225 annually (subject to local adjustments).

Payment Options

  • Pay in full by January 2024 (for the 2024 tax year).
  • Spread payments over the year via direct debit, salary deduction, or monthly installments.

3. Value-Added Tax (VAT)

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

VAT Rates

  • 23% (Standard Rate): Most goods and services.
  • 13.5% (Reduced Rate): Hospitality, construction, and certain services.
  • 9% (Special Rate): Tourism-related services (e.g., hotels, restaurants).
  • 0% (Zero Rate): Basic food items, children's clothing, and books.

For Businesses

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

4. Other Taxes

  • Capital Gains Tax (CGT): 33% on profits from the sale of assets.
  • Stamp Duty: 1% on property purchases up to โ‚ฌ1 million (2% above โ‚ฌ1 million).
  • Excise Duties: Applied to alcohol, tobacco, and fuel.

Registering for Tax Purposes in Limerick

If you are a new resident or immigrant, you must register with Revenue to ensure you are taxed correctly.

Steps to Register

  1. Obtain a Personal Public Service (PPS) Number:

    • A PPS number is essential for tax purposes. Apply through the Department of Social Protection in Limerick.
    • Documents required: Passport, proof of address, and proof of employment or study.

  2. Register with Revenue:

    • Use the myAccount portal on the Revenue website to register for tax.
    • Provide your PPS number, employment details, and bank account information.

  3. Inform Your Employer:

    • Once registered, Revenue will issue a Tax Credit Certificate to your employer, ensuring the correct tax deductions.

  4. Self-Employed Individuals:

    • Register for self-assessment using the Revenue Online Service (ROS).
    • File an annual tax return (Form 11) by October 31st of the following year.

Tax Deadlines

  • PAYE Employees: Taxes are deducted automatically, so no action is required unless you need to claim refunds or additional credits.
  • Self-Employed: File and pay taxes by October 31st (or mid-November if filing online via ROS).
  • LPT: Payment is due annually by January 1st.

Local Resources for Tax Assistance in Limerick

  1. Revenue Office in Limerick:

    • Address: River House, Charlotte Quay, Limerick.
    • Services: Tax registration, queries, and assistance.
    • Website: www.revenue.ie

  2. Citizens Information Centre:

    • Address: 54 Catherine Street, Limerick.
    • Services: Free advice on tax, social welfare, and other public services.
    • Website: www.citizensinformation.ie

  3. Local Accountants and Tax Advisors:

    • Many accounting firms in Limerick specialize in helping individuals and businesses with tax compliance. Examples include BDO Limerick and Grant Thornton.

  4. Limerick Chamber of Commerce:

    • Offers support for businesses, including tax workshops and networking events.

Cultural and Practical Tips for Managing Taxes in Limerick

  1. Keep Records: Retain all receipts, payslips, and financial documents for at least six years, as Revenue may audit your tax returns.
  2. Use Online Services: The myAccount and ROS portals are user-friendly and allow you to manage your taxes efficiently.
  3. Claim Refunds: If you overpay taxes or are entitled to additional credits (e.g., medical expenses, tuition fees), you can claim refunds through Revenue.
  4. Understand Deadlines: Missing tax deadlines can result in penalties and interest charges, so mark them on your calendar.
  5. Seek Professional Help: If youโ€™re unsure about your tax obligations, consult a tax advisor or accountant.

By following this guide, you should have a clear understanding of the tax system in Limerick, Ireland, and how to fulfill your obligations as a resident or immigrant. If you have further questions, feel free to ask!