In Ireland, there is Value added tax, income taxes, and many other taxes. Employees and workers’ pay (PAYE) Pay as You Earn usually based on their monthly earnings. The taxation of incomes is usually progressive, while low-income earners are paying little or no PAYE. The marginal taxation rate is 52%. Moreover, excise duty and VAT also contribute to the government’s revenue.
Income tax
Income tax in Ireland is usually charged mainly on profits, interests, rent receipts, dividends, earnings, and property. Ireland has been operating a tax year, since 2002, coinciding with the dates January 1st to 31st December.
Tax credits
Some tax credits reduce a tax payer’s liability in Ireland. Tax credits, are usually non-refundable in case they may exceed the tax amount due, but they are likely to be carried forward in the same year. A few of them are awarded automatically to the taxpayers whereas others ought to be claimed by these taxpayers. The credits, most of the time, do not exceed 20% of the tax payer’s income.
Marginal relief and exemption limits
In Ireland, someone aged either 65 or above is exempted from paying income tax. Also, if one’s income is quite low, one is not liable to tax paying. Marginal reliefs are also given to people or couples earning slightly above the limit.
Deductions from tax liabilities
Some items of expenditure may be reduced from someone’s income for taxation purposes, mainly referred to as acquiring tax relief. The huge majority are mainly allowed up to the standard tax rate of 20%.
Medical insurance
Someone is buying private medical insurance, normally is supposed to earn a relief of 20% of his/her basic salary, normally given at source. People aged 50 and above have a tax credit entitled to them.
Medical expenses
In Ireland, relief is given on medical expenses at 20% since 2009. They vary according to, fees of consultants and doctors, prescribed medicines, nursing home expenses; ambulance fees patients’ accommodation expenses and various other factors.
Service charges
Relief is given for service charges paid to the local authorities for services such as sewage disposal, domestic water supply as well as domestic refuse collection.
There are several methods for which tax is paid. One, employees, directors and pensioners are entitled to pay PAYE. Self-assessment, Universal Social Charge, PRSI, CGT, and others are also used as tax payment methods.
