Waterford

๐Ÿ’ฐ

Taxes and Revenue

Guidance on understanding local taxes, filing requirements, and accessing tax support services.

Sections

1. Overview of the Irish Tax System

Irelandโ€™s tax system is centralized, meaning taxes are collected and managed by the national authority, the Revenue Commissioners (commonly referred to as "Revenue"). While there are no city-specific taxes in Waterford, understanding the national tax framework is essential for residents and businesses in the area.

2. Key Tax Categories

a. Income Tax

Income tax is a major tax for individuals working or earning income in Ireland, including Waterford.

  • Tax Rates (2023):

    • Standard Rate (20%): Applied to income up to โ‚ฌ40,000 (for single individuals).
    • Higher Rate (40%): Applied to income above โ‚ฌ40,000.
    • Tax bands vary depending on marital status and whether you have dependents.

  • Tax Credits:

    • Tax credits reduce the amount of tax you owe. Common credits include:
      • Personal Tax Credit: โ‚ฌ1,775 (single person).
      • Employee Tax Credit: โ‚ฌ1,775 (if employed).
      • Additional credits may apply for married couples, single parents, or those with disabilities.

  • Payment Procedure:

    • If you are employed, your employer deducts income tax through the PAYE (Pay As You Earn) system.
    • If self-employed, you must file a tax return annually via the Revenue Online Service (ROS).

  • Deadlines:

    • For PAYE workers, taxes are deducted automatically.
    • For self-employed individuals, the annual tax return deadline is 31 October (or mid-November if filing online).

  • Local Considerations in Waterford:

    • Waterford has a growing tech and pharmaceutical industry, so many professionals may qualify for specific tax reliefs, such as the Special Assignee Relief Programme (SARP) for skilled workers relocating to Ireland.

b. Universal Social Charge (USC)

The USC is a separate tax applied to gross income.

  • USC 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.

  • Exemptions:

    • If your total income is less than โ‚ฌ13,000 per year, you are exempt from USC.

  • Payment Procedure:

    • Like income tax, USC is deducted automatically through PAYE for employees or paid via ROS for self-employed individuals.

c. Pay Related Social Insurance (PRSI)

PRSI is a contribution towards social welfare benefits.

  • Rates:

    • Employees typically pay 4% of their gross income.
    • Employers also contribute a percentage based on your salary.

  • Benefits:

    • PRSI contributions entitle you to benefits such as unemployment payments, maternity leave, and pensions.

d. Value-Added Tax (VAT)

VAT is a consumption tax applied to goods and services.

  • Standard Rate: 23%.

  • Reduced Rates:

    • 13.5% for services like restaurants, hotels, and hairdressing.
    • 9% for newspapers and certain tourism-related services.
    • 0% for essential items like most food and childrenโ€™s clothing.

  • Payment Procedure:

    • Businesses in Waterford must register for VAT if their turnover exceeds โ‚ฌ37,500 (services) or โ‚ฌ75,000 (goods). VAT is filed and paid through ROS.

e. Local Property Tax (LPT)

The LPT is an annual tax on residential properties.

  • Rates:

    • The tax is based on the market value of your property. For most properties in Waterford, the annual LPT ranges from โ‚ฌ90 to โ‚ฌ315, depending on the valuation band.

  • Payment Procedure:

    • 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 your salary.

  • Deadlines:

    • The LPT return is due annually by 1 November.

  • Local Considerations in Waterford:

    • Waterford City and County Council may adjust the LPT rate by up to 15%. Check the councilโ€™s website for updates.

f. Capital Gains Tax (CGT)

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

  • Rate: 33%.

  • Exemptions:

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

  • Payment Procedure:

    • File and pay CGT through ROS.

  • Deadlines:

    • For disposals made between 1 January and 30 November, payment is due by 15 December.
    • For disposals made in December, payment is due by 31 January of the following year.

g. Stamp Duty

Stamp duty is a tax on property transactions.

  • Rates:

    • 1% on residential properties up to โ‚ฌ1 million.
    • 2% on the portion above โ‚ฌ1 million.
    • 7.5% on non-residential properties.

  • Payment Procedure:

    • Paid by the buyer through their solicitor during the property purchase process.

3. Payment Procedures

All taxes in Ireland can be managed through the Revenue Online Service (ROS). To use ROS, you must:

  1. Register for a Personal Public Service (PPS) Number (similar to a social security number).
  2. Create a ROS account on the Revenue website.
  3. Use your PPS number to file returns, make payments, and access tax records.

4. Deadlines

  • Income Tax (Self-Employed): 31 October (or mid-November for online filing).
  • LPT: 1 November.
  • CGT: 15 December or 31 January (depending on the disposal date).
  • VAT: Monthly, bi-monthly, or quarterly, depending on your business turnover.

5. Local Resources in Waterford

While taxes are managed nationally, there are local resources in Waterford to assist with tax-related matters:

  • Waterford Citizens Information Centre:
    • Provides free advice on tax, social welfare, and employment rights.
    • Address: 37 Lower Yellow Road, Waterford City.
    • Website: citizensinformation.ie
  • Local Tax Advisors and Accountants:
    • Waterford has several accounting firms that can assist with tax compliance, such as MK Brazil and Oโ€™Neill Foley.
  • Waterford Chamber of Commerce:
    • Offers support for businesses, including tax workshops and networking events.
    • Website: waterfordchamber.ie

6. Practical Tips for New Residents

  • Set Up a PPS Number: This is essential for employment, tax, and social welfare. Apply through the Intreo Centre in Waterford.
  • Understand Tax Reliefs: Ireland offers various tax reliefs, such as for medical expenses, tuition fees, and home renovations.
  • Keep Records: Maintain receipts and documentation for at least six years, as Revenue may audit your tax returns.

By understanding these tax categories and procedures, you can effectively manage your finances while living or working in Waterford, Ireland. If you need further assistance, consider consulting a local tax advisor or contacting the Revenue Commissioners directly.