WHAT IS CORPORATION TAX?
Corporation Tax is charged on all profits (income and gains), wherever arising, of companies resident in the State, with some exceptions, and non-resident companies who trade in the State through a branch or agency.
How is a Company Taxed?
This tax is charged on the company’s profits which include both income and chargeable gains. A company’s income for tax purposes is calculated in accordance with Income Tax rules. Chargeable gains are calculated in accordance with Capital Gains Tax rules.
What is the rate of Corporation Tax?
There are two rates of Corporation Tax:
12.5% for trading income unless the income is from an excepted trade* in which case the rate is 25%
25% for non-trading income (e.g. investment income, rental income)
* Excepted trades include certain land dealing activities, income from working minerals and petroleum activities
WHAT IS VAT?
VAT is a tax on consumer spending. It is collected by VAT- registered traders on their supplies of goods and services effected within the State, for consideration, to their customers. Generally, each such trader in the chain of supply from manufacturer through to retailer charges VAT on his/her sales* and is entitled to deduct from this amount the VAT paid on his/her purchases.
[*In some circumstances, particularly in the Construction Industry, VAT is not charged by the supplier, but instead the VAT registered customer simply accounts for the VAT as if it had been charged.]
The effect of offsetting VAT on purchases against VAT on sales is to impose the tax on the added value at each stage of production – hence Value-Added Tax. For the final consumer, not being VAT- registered, VAT simply forms part of the purchase price.
Who must register for VAT?
Persons who are involved in the taxable supply of property and persons whose annual turnover from supplies of taxable goods and services in the State, or the value of whose acquisitions of goods from other EU Member States, exceed or are likely to exceed certain thresholds are obliged to register for VAT. Those thresholds are €75,000 in respect of the supply of goods, €37,500 in respect of the supply of services.
Persons whose turnover from taxable activities does not exceed the thresholds are not obliged to register but they may register for VAT if they so wish.
Revenue issues a VAT registration number to a person when it is satisfied that the person is carrying on a taxable business in the State.
WHEN DO I REGISTER AS AN EMPLOYER?
Any employer who makes payments exceeding a rate of:
- €8 per week (or €36 per month) in the case of an employee engaged full-time or
- €2 per week (or €9 per month) where the employee has other employment
and who is not already registered must register for PAYE purposes.
An employer is also required to notify Revenue of their name and address and of the fact that they are making such payments within a period of 9 days after the date of commencement. A company must register as an employer and operate PAYE on the income of directors even if there are no other employees. A director of an Irish incorporated company is liable to PAYE on any income attributable to the directorship irrespective of their residence status or where the duties of the directorship are performed.
NOTE: If all the directors and shareholders have an Irish PPS number it can take a week to get the company Tax Number. There is generally no problem getting the Company Tax number within a few days, but there can be delays with the company VAT number due to the Revenue Commissioner backlog. If any one of the directors or shareholders does not have an Irish PPS number, the process is different and can take up to 6 weeks.
Company Registration for Corporation Tax, RCT, VAT & PAYE – PRICE €100.00 ORDER FORM
Company registration for Corporation Tax only – PRICE €75.00 ORDER FORM
Company registration for PAYE only – PRICE €50.00 ORDER FORM
Company registration for RCT only – PRICE €50.00 ORDER FORM
Company registration for VAT only – PRICE €50.00 ORDER FORM