Accountancy in the Republic of Ireland

>> Withholding Taxes in the Republic of Ireland

Interest

Deposit Interest Retention Tax (DIRT) is deducted by Irish financial institutions form deposit interest paid or credited to the accounts of Irish residents at the rate of 37%.

This rate is due to decrease by 2% each year until 2020 when the rate of DIRT will be 33%.

Royalties

Royalties and other sums in respect of the use of a patent are generally paid under the deduction of standard rate tax. The gross royalty is allowed as a deduction in arriving at the statutory income of the taxpayer, but the taxpayer is accountable for the tax deducted.

Dividends

Tax at the 20% standard rate applies to distributions made by an Irish resident company. A recipient who is liable to tax on such a distribution, such as an Irish resident individual, can claim an off-set for the tax withheld against his tax liability. Exemption is granted to residents of tax treaty countries, residents of EU Member States, companies not resident in the State which are ultimately controlled by residents of tax treaty countries.

An Irish resident company which receives a dividend from a subsidiary (in which it has at least a 5% holding) which is resident in a territory with which Ireland does not have a double tax treaty will be entitled to reduce Irish tax on the dividend by any withholding tax paid in that territory on the dividend and by an appropriate part of the foreign tax on the income underlying the dividend.

Distance selling of goods

Distance sales occur when goods are dispatched or transported to a private consumer (not VAT registered) in Ireland, and the supplier is responsible for the delivery of the goods.

It includes mail order sales, phone or tele-sales and physical goods ordered over the internet.

It does not include sales of new means of transport or excisable goods. Digitised goods are considered to be services (goods that are downloaded via the internet).

A trader is required to register and account for VAT in Ireland when distance sales to Ireland exceed €35,000 in the calendar year. However, it is possible opt to register and account for Value-Added Tax (VAT) on distance sales even if the threshold is not exceeded.

VAT Registration

In Ireland, Value-Added Tax (VAT) registration is obligatory when the VAT thresholds are exceeded or are likely to be exceeded in any 12 month period (except for distance sales). If a trader’s turnover is below the thresholds, it is possible to elect to register for VAT.

The principal thresholds are as follows:

  • €37,500 in the case of persons supplying services only.
  • €35,000 for persons making mail-order or distance sales into the State.
  • €41,000 for persons making acquisitions from other European Union Member States.
  • €75,000 for persons supplying goods.

A non-established person supplying taxable goods or services in the State is obliged to register and account for VAT irrespective of the level of turnover.

Invoicing retention

A Value-Added Tax (VAT) invoice is a document issued by an accountable person setting out the details of a taxable supply and all related information as prescribed by VAT law.

A VAT invoice must issue within fifteen days of the end of the month in which goods or services are supplied.


Latest version updated 5th April 2019

Country Breakdown

4.773

Million

Population

Euro

Currency

$ 294.1

Billion

GDP

70,273

km2