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Overview of Tax Issues for Expats in Ireland

Submitted: October 2014

The Irish tax year runs from 1 January to 31 December.

Tax Residence

Generally, if you stay in Ireland for less than 183 days in a year you will be considered non-resident and therefore taxed on Irish-source income only. If you stay for longer than 183 days you will normally be considered resident and become liable for tax on your worldwide earnings. In some cases, you may be deemed resident even if you are in Ireland for less than 183 days. For more details, see Employment Taxation.

 

Employment/Business Taxes

For resident, withholding tax is deducted by your employer from your wages or salary. They will also deduct social security contributions. The marginal (highest) tax rate is 41%. You may have to fill in a tax return after the end of the year to claim allowable deductions, and calculate the final amount of tax payable. If you are self-employed, you will pay income tax based on the profits of your business after deduction of costs. For more details, see the Employment Taxation section.

If you come to Ireland to set up in business and start a company, you will be liable to corporate tax on the profits from your trade or business. The general rate of corporate tax is 12.5% for trading income. Passive income including interest, foreign dividends and rental income is taxed at 25%, as is income from land dealing, mining and petroleum related activities. New companies must complete a registration process and obtain a CRO Number prior to commencement of activities. Companies must pay tax on an annual basis, and have to make payments of preliminary tax during the course of the year. After the end of the year a tax return must be produced by the 23rd day of the ninth month of the accounting period following the year in which the income was generated. For more details, see Business Taxation.

 

Other Taxes

For individual residents and non-residents in Ireland, investment income in the form of interest paid by financial institutions subject to Deposit Interest Retention Tax (DIRT ) at a rate of 41%. Other forms of interest may be subject to income tax at progressive rates.

For residents and non-residents, dividend income from Irish sources is treated as ordinary income and is subject to a withholding tax of 20%. Rental income from Irish property is subject to income tax at progressive rates. Taxable capital gains are taxed at a flat rate of 33%. For more details, see Investment Taxation.

 

Tax Treaties

Ireland has signed tax treaties with over 65 countries worldwide. Withholding taxes rates on interest and royalties payments made to taxpayers resident other countries which have tax treaties with Ireland in place can be reduced. The treaties also mean that the amount of withholding tax charged by the originating country can be reduced on money flowing into Ireland for residents. The amount that can be charged under a treaty is often reduced to between 5% and 15%. For more details see: Taxation – Tax Treaty Considerations for Expats in Ireland.

 

 

 




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