Ireland Tax Rates 2021
Last partial update, October 2021. Ireland taxation of an individual's income is progressive.In other words, the higher the income, the higher the rate of tax payable.
In Ireland the tax rates for an individual in 2021 are 20% and 40%.
There are reduced rates of tax for certain income earners.
In Ireland the standard corporate tax rate in 2021 is currently fixed at 12.5%. For trading income.
- Corporate tax of 25% is imposed on passive income.
- For additional info by Ireland Tax Office, see www.revenue.ie.
Ireland Income Tax for an Individual
An individual is liable for tax on his income as an employee and on income as a self-employed person.Tax will be payable on income earned in Ireland and overseas by an individual who meets the test of a "permanent resident" of Ireland.
A foreign resident who is employed in Ireland pays tax only on income earned in Ireland.
One of two tests must be passed to be considered an Irish resident: residency of more than 183 days a year in Ireland or residency of more than 280 days over a period of two years.
It is important to point out that as regards taxable income from a salary; the employer is obligated to deduct the amount of tax payable on a monthly basis.
A self-employed person must prepay income tax that will be offset on filing an annual return.
The advance payment is determined on the basis of the return made for the previous year.
In the event of a new business, the advance will be calculated on the basis of estimates made by the owner of the business.
Certain payments are deductible from taxable income as detailed below.
Ireland individual income tax rates 2021 (single)
| Tax base (EUR) | Tax (%) |
|---|---|
| 0 – 35,300 | 20% |
| 35,301 and over | 40% on base exceeding 33,800. |
Ireland Capital Gains
The rate of tax payable on capital gains in 2021 is 33% for individuals.40% in certain gains .
- A capital loss may be offset against a capital gain in the current year, or against a capital gain in the coming years.
- There are exemptions from capital gains in the following cases, among others, subject to certain conditions:
The first EUR 1,270 of the capital gain.
Gains from lotteries and betting.
The sale of a main residential asset. - Companies pay in general 33% on sale of assets.
For certain capital gains the tax rate is 40%.
Companies holding at least 5% of an investee can have a participation exemption, subject to certain terms.
Ireland Reporting Dates and Payment
The tax year in Ireland for individuals ends on December 31. Advance payments of income tax are based on the "self assessment" method.- An Individual - An individual whose income is only from a wage pays his income tax to the tax authorities on a monthly basis.
A self-employed individual is obligated to pay 90% of the tax forecast for the year by November 1, or an amount that is identical to the tax he paid in the previous year.
Annual returns must be filed by January 30. - A Limited Company - Advance payments on tax is similar to that of an individual.
Fines are imposed for arrears in filing an annual return at the rate of 5% of the tax on returns submitted by March 31.
The fine is 10% in the case of returns submitted after March 31.
Ireland Social Security
The employer is obligated to deduct tax at source from an employee and to make additional contributions to social security, known as PRSI (Pay Related Social Insurance). The rates are:- Employer - 11.05%
- Employee - 4%
- Self employed - 4%
Ireland Universal Social Tax, UST
In the year 2021 the UST is imposed on annual income exceeding EUR 12,012.The rates are:
Income of up to EUR 12,012 – 0.5%.
Income of EUR 12,013- EUR 20,687 - 2%.
Income of EUR 26,688-EUR 70,044 - 4.5%.
Income above EUR 70,044 – 8%.
Ireland Tax Withholding Rates
Payments to nonresident companies are subject to the following withholding rates:
| Dividend | 0/25 |
| Royalties | 0/20 |
| Interest | 0/20 |
| Technical Fees | 0 |
Comments:
- Deduction at source in the case of a dividend, royalties and interest for foreign residents is subject to the Double Taxation Prevention Treaty.
- Payments of interest and royalties to EU residents are exempt subject to the EU directive.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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