In tandem with providing accounting services, we provide business clients with a taxation service. Primary services include the computation of tax liabilities and the completion of tax returns to the revenue commissioners.
We also provide clients with personal taxation services, ensuring that they are maximising allowable tax relief for; pension contributions, income protection premiums and relief on rental income.
The calculation of corporation tax liability follows on from the finalisation of the company accounts. The deadline for the submission of corporation tax returns is nine months after the companies year end. Preliminary tax payments are also required to be made during the year.
For sole traders, annual income tax liability is directly tied to the performance & profitability of their business. Income tax returns for the tax year must be submitted to the revenue no later than Oct 31st following the end of the tax year. On Oct 31st you must pay any balance of tax due for the tax return being submitted, together with preliminary tax for the following tax year.
It is essential to ensure that credit is received for all available income tax reliefs. For example; pension contributions, health expenses, premiums for income protection are allowable income tax deductions, within revenue guidelines.
See personal pensions section for further explanation of tax relief on pension contributions for sole traders.
Likewise for company owner / directors, the directors must also submit their income tax return for the tax year by Oct 31st. Company owner / directors have the ability to manage their earning levels and therefore their income tax liability. The main income tax reliefs available for owner directors include; pension contributions and premiums for income protection, again within revenue guidelines. The owner / director also has the ability to gain relief from corporation tax for any company contributions made to his / her pension.
See executive pensions section for further explanation of tax relief on pension contributions for the company owner / director.
VAT (Valued Added Tax)
Whatever business structure you operate under, either as a sole trader or a limited company, it is likely that you will need to account & pay VAT. You will need to keep records of VAT on sales and purchases, so the net amount payable or claimable is submitted to the revenue.
For the current VAT registration thresholds and the applicable VAT rate for each business sector see the revenue web site.
Capital Gains Tax (CGT)
Where individuals make gains on investments there is a requirement to pay capital gains tax. It is possible to offset capital losses against capital gains within the same tax year and it is also possible to carry forward capital losses to future tax years.
There are allowable deductions available, which have the effect of either increasing the investment cost or decreasing the sale price, thereby lowering the gain that is liable to capital gains tax. There is also a small CGT annual exemption available, this portion of net gains is exempt from capital gains tax.
Note that your principle private residence is not deemed to be an investment. However, if selling your home, you may have a capital gains liability if your house is situated on a site greater than one acre in size.
For individuals who are tax resident in Ireland, rental income will be liable to income tax in Ireland, whether than income is from Irish or foreign based property. There are a number of deductions available which should minimise the annual income tax liability. The most important relief currently available is the deduction of interest payments made on finance used for the purchase of the investment property. This is one of the main reason that many investors use interest only mortgages for investment property.
For foreign rental income, depending on the existence and contents of a tax treaty, with the foreign jurisdiction, you may be in a position to gain credit for any income tax payments made to the foreign tax authority. Although we would advise you have a tax specialist engaged within the country in which you are purchasing, we are able to offer advice regarding the tax status on foreign rental income and gains as they impact your Irish tax liability.
If you have a property which was purchase with special tax relief, such as Section 50 or Section 23 properties, you will be able to offset the certified relief against other Irish based rental income from other properties in your portfolio. Note these special tax reliefs are not usable against foreign rental income.