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WHAT IS TAX? Tax is a levy charged by the government on individuals and…
WHAT IS TAX? Tax is a levy charged by the government on individuals and companies to finance government expenditure.
~VAT (Value Added Tax) – A tax paid by consumers on certain goods and services. Goods are bought, VAT is paid. The main VAT rates are 13.5% and 23%.
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~Capital Gains Tax – A tax paid on the profits made by an individual / family from selling an asset. (E.G. Property Sale)
~Employee PRSI (Pay Related Social Insurance) – This is a compulsory insurance payment by employees to the state. Money goes towards unemployment payments, pensions and maternity benefits.
MAIN TAXES PAID BY HOUSEHOLDS; PAYE (Pay as you Earn) – Employees deduct the tax automatically from their employee’s wages and pass it onto the revenue commissioners. This system is progressive, so the more you earn, the greater income tax has to be paid
M\AIN TAXES APID BY BUSINESSES; Corporation Tax – A tax on a companies profits. The government has reached an agreement with the EU Commission for the introduction of a 12% corporate tax on trading income since the 1st of January 2003. This is seen as quite a low percentage but is necessary to attract (FDI) – Foreign Direct Investment in Ireland
Capital Gains Tax – A tax paid on the profits made by a company from selling an asset. (E.G. Property Sale)
Customs Duties – Taxes levied on certain types of goods imported into the country. This does not apply to imports from other EU member states. This only applies to countries outside of the (FTA) – Free Trade Area.
Employers PRSI (Pay Related Social Insurance) – Compulsory insurance payment levied on firms for every employee they have.
PAYE (Pay as you Earn) – The system of tax collection used in Ireland. Businesses do no have to pay this tax but they must register as an employer with the revenue commissioners. Employers deduct the tax automatically from their employees wages and pass it onto the revenue commissioners.
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If an employee leaves during the year, their employers should issue the employee with a P.45. This form is also known as a “Cessation Certificate” and shows all pay, income tax and PRSI made by workers.
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The P.35 Is a document, prepared by an employer which shows all income paid and all tax and RPSI collected by the Tax Office.
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