Limerick

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Taxes and VAT

Overview of applicable taxes, including Value-Added Tax (VAT) and how it applies to goods and services.

Sections

1. Overview of Taxes in Ireland (Applicable to Limerick)

Ireland has a centralized tax system, meaning taxes are the same across the country, including Limerick. Taxes are administered by the Revenue Commissioners (Revenue), the national tax authority. The key taxes you should be aware of include:

a. Income Tax (for residents and workers)

  • Who pays it? Anyone earning income in Ireland, including employees, self-employed individuals, and business owners.
  • Rates:
    • 20% (Standard Rate): Applied to income up to โ‚ฌ40,000 (for single individuals; thresholds vary for married couples or single parents).
    • 40% (Higher Rate): Applied to income above โ‚ฌ40,000.
  • Tax Credits: Residents are entitled to tax credits (e.g., the Personal Tax Credit of โ‚ฌ1,775 for single individuals), which reduce the amount of tax owed.
  • Pay As You Earn (PAYE): Employees have income tax automatically deducted from their wages by their employer.

b. Universal Social Charge (USC)

  • A separate tax on income, applied on a sliding scale:
    • 0.5% on income up to โ‚ฌ12,012.
    • 2% on income between โ‚ฌ12,013 and โ‚ฌ22,920.
    • 4.5% on income between โ‚ฌ22,921 and โ‚ฌ70,044.
    • 8% on income above โ‚ฌ70,044.
  • Exemption: If your total income is less than โ‚ฌ13,000 per year, you are exempt from USC.

c. Pay-Related Social Insurance (PRSI)

  • A contribution to Irelandโ€™s social welfare system, deducted from wages.
  • Rates vary depending on your employment status and income level (typically 4% for employees).

d. Local Property Tax (LPT)

  • If you own property in Limerick, you must pay an annual property tax based on the market value of your home. Rates are set by Limerick City and County Council, with adjustments allowed within a national framework.

2. Value-Added Tax (VAT) in Limerick

VAT is a consumption tax applied to goods and services in Ireland, including Limerick. It is included in the price of most items you purchase.

a. VAT Rates

  • 23% (Standard Rate): Applied to most goods and services, including electronics, clothing, and professional services.
  • 13.5% (Reduced Rate): Applied to services like restaurants, hotels, and hairdressing, as well as some construction services.
  • 9% (Special Reduced Rate): Applied to newspapers, e-books, and certain tourism-related services (e.g., accommodation and attractions).
  • 0% (Zero Rate): Applied to essential goods like most food items, childrenโ€™s clothing, and medicines.

b. VAT Refunds for Visitors

  • Who is eligible? Non-EU visitors can claim a VAT refund on goods purchased in Ireland that are taken out of the EU within three months of purchase.
  • How to claim:
    1. Shop at stores offering the Tax-Free Shopping service (look for signs or ask the retailer).
    2. Request a VAT refund form at the time of purchase.
    3. Present the completed form, along with your receipts and goods, at the VAT refund desk at the airport or port when leaving Ireland.
    4. Refunds can be processed via credit card, cash, or cheque.

c. VAT for Businesses

  • If you are starting a business in Limerick, you may need to register for VAT if your annual turnover exceeds:
    • โ‚ฌ37,500 for services.
    • โ‚ฌ75,000 for goods.
  • VAT returns are filed bi-monthly through the Revenue Online Service (ROS).

3. Practical Guidance for Visitors and Immigrants

a. For Visitors

  • Shopping: Prices in Limerick shops already include VAT, so the price you see is the price you pay.
  • VAT Refunds: Keep your receipts and ensure you shop at tax-free retailers if you plan to claim a refund.
  • Dining Out: Be aware that VAT is included in restaurant bills, and tipping (typically 10-15%) is not mandatory but appreciated.

b. For Immigrants

  • Registering for Taxes: If you move to Limerick for work, you must register with Revenue to obtain a Personal Public Service (PPS) number. This number is essential for tax purposes.
  • Opening a Bank Account: A local bank account is necessary for receiving wages and managing tax refunds.
  • Understanding Your Payslip: Your payslip will show deductions for income tax, USC, and PRSI. Ensure your employer has applied the correct tax credits and rates.
  • Self-Employment: If you are self-employed, you must file an annual tax return through ROS and pay preliminary tax (an estimate of your tax liability for the following year).

4. Local Considerations in Limerick

  • Cost of Living: Limerick is generally more affordable than Dublin, but taxes like VAT and income tax are the same nationwide.
  • Public Services: Taxes fund public services like healthcare, education, and public transport. As a resident, you may be eligible for benefits like the Medical Card (means-tested) or GP Visit Card.
  • Limerick City and County Council: This local authority collects the Local Property Tax and provides information on rates and exemptions for property owners.

5. Resources and Contacts

Summary

Understanding taxes and VAT in Limerick, Ireland, is essential for managing your finances effectively. Visitors should focus on VAT-inclusive pricing and refund opportunities, while immigrants should familiarize themselves with income tax, USC, and PRSI. By registering with Revenue, keeping track of your tax obligations, and utilizing available resources, you can navigate the tax system in Limerick with ease.