Taxation in the Republic of Ireland
In June 2017, Ireland's CT system was ranked as one of the world's largest Conduit offshore financial centers (OFCs) (i.e. places that act as links to tax havens),[14] in March 2018 the Financial Stability Forum ranked Ireland as the 3rd largest Shadow Banking OFC,[15] and in June 2018 tax academics calculated that Ireland was the world's largest corporate tax haven.
[8][27] However, since Apple's 2015 restructuring, Ireland's headline Tax-to-GDP ratio had fallen to the bottom of the OECD range at under 23%.
[8][27] Ireland's taxation system is distinctive for its low headline rate of corporation tax at 12.5% (for trading income), which is half the OECD average of 24.9%.
[57] As with medical expenses, since 2007 the relief could be claimed in respect of payments made by any person, irrespective of the relationship between payer and payee.
[57] Relief is also allowed in respect of fees of over €315 for foreign-language or information technology courses approved by FÁS, of less than two years duration, which results in the award of a certificate of competence.
[60] Employers receive notification of the tax credit and standard rate band applicable to the employee from Revenue.
[62] Underpaid tax attracts an interest penalty charge of 0.0219% per day,[62] and underpayments may result in a surcharge,[63] prosecution,[64] or publication of their name in a defaulters' list.
[66] Reduced rates of USC apply to: PRSI is paid by employees, employers, and the self-employed as a percentage of wages after pension contributions.
[70] Class C workers are commissioned officers of the defence forces, and members of the army nursing service, recruited before 6 April 1995.
[70] Classes K and M apply to income which is subject to the health contribution but not to social insurance, including occupational pensions.
[77] VAT rates range from 0% on books, children's clothing and educational services and items, to 23% on the majority of goods.
[78] The 13.5% rate applies to many labour-intensive services as well as to restaurant meals, hot takeaway food, and bakery products.
[13] As of November 2018[update], there are two rates of corporation tax ("CT") in the Republic of Ireland:[91][92][93][94] The special 10% tax rate for manufacturing in Ireland (introduced from 1980/81), and for financial services in the special economic zone of the International Financial Services Centre in Dublin (introduced from 1987), have now been phased out since 2010 and 2003 respectively, and are no longer in operation.
[99] Ireland's corporate tax system has base erosion and profit shifting (BEPS) tools, such as the Double Irish (used by Google and Facebook), the Single Malt (used by Microsoft and Allergan), and the Capital Allowances for Intangible Assets (CAIA) (used by Accenture, and by Apple post Q1 2015); in June 2018, academics showed they are the largest global BEPS tools.
[16] In a phenomenon sometimes referred to as "leprechaun economics", Apple's 2015 restructure of its BEPS tools inflated Irish GDP by 34.4%.
[4] Ireland's tax system also offers SPVs that can be used by foreign investors to avoid the 25% corporate tax on passive income from Irish assets, which are covered in more detail in Irish Section 110 Special Purpose Vehicle (SPV), and in Qualifying investor alternative investment fund (QIAIF).
The rate of tax for disposals made in previous years is less: details can be obtained from the Revenue Commissioners.
Stamp duty is charged as a percentage of the consideration paid for immovable property, including goodwill attached to a business.
[113] Cheques (technically, all bills of exchange) incur a €0.50 tax, generally collected by the bank on issue of each chequebook.
[115] Capital acquisitions tax is charged to the recipient of gifts or inheritances, at the rate of 33% above a tax-free threshold.
[126] On 13 December 2011, the Minister for Finance signed the Commencement Order for the new electronic RCT system which was introduced on 1 January 2012.
All principal contractors in the construction, forestry and meat processing sectors are obliged to engage electronically with Revenue.
[128] Since September 2008, the subcontractor no longer charges or accounts for VAT on supplies of construction services to which RCT applies.
Instead, the principal contractor must account for the VAT to Revenue (although he will generally be entitled to an input credit for the same amount).
By law, taxi drivers must now issue an electronic receipt for each fare, effectively recording their income.
[151][152] In April 2023, The Irish Times reported that the Revenue Commissioners were examining the implications for the list of a ruling by the European Court of Human Rights.
36345/16),[153] the grand jury of the court (led by Irish judge Síofra O'Leary) ruled that publication of L.B.
[151] The court ruled that "this public shaming list was a modern form of pillory, was extremely humiliating and caused huge distress", because Hungary had failed to apply five test of balance.
Rates for private residences were abolished in 1977, with national taxes increased and local authorities instead receiving funding from central government.
Opponents claim that the charges are double-taxation – that in the aftermath of the abolition of domestic rates in 1977, their taxes were increased to fund local authorities.
