Chapter 12 - Taxation Flashcards
(24 cards)
Who is responsible for collecting taxes
The office of the revenue commissioner
What is VAT
A percentage tax added to the price of certain goods and services
Current rate is 23% on most good and services
13.5% on items like coal heating electricity
Tourism is 9%
0% on children clothes and shoes
What is corporation tax
Tax paid on the profits earned by companies in Ireland
Current rate is 12.5%
Low corporation tax provides financial incentive for business to set up in Ireland
What is capital gains tax
Paid on profits earned from the sales or disposal of asserts such as a building
What is custom duties tax
Taxes levied on imports coming into Ireland from outside the EU
What are commercial rates
Taxes levied by local authorities on property used for commercial purposes to help finance government services
Employers PRSI
Levied on firms for every person they employee
Calculated as a % of the employees gross income . Funds social welfare payments and maternity benefits
What is PAYE
Income tax paid by employees on their wages
Businesses deduct PAYE before their employees are paid
What is USC
Tax payable on gross income
Introduced in 2011
0.5% 2% 4.5% 8%
What are excess duties
Taxes added to the price of certain goods such as cigarettes alcohol and petrol
What is motar tax
Tax paid annually on vehicles
Determined by the vehicles CO2 emissions
Paid to local county council
What is a tax audit
Detailed examination of the revenue commissioner of a taxpayers financial records
What is self assessment income tax
Paid by self employed people on their income
They must calculate their own tax liability
What is capital acquisitions tax
Paid by those receiving money or assets as a gift or inheritance 33% after 280,000
What is DIRT
Automatically deducted from interest received from bank and building society accounts and passed directly from banks to the revenue commissioner
What is tax evasion
Where taxpayers illegally evade paying the full amount of tax owed
By not declaring the full amount of their income or by claiming tax deductions they are not entitled to
What is tax avoidance
When tax payers take advantage of the tax system to legally reduce the amount of tax that the owe
E.g making payments into a pension fund
What are the two rates of PAYE
1) STANDARD RATE OF TAX : on all earnings below a certain amount is called a standard rate cut of post
2) HIGHER RATE OF TAX : applies on all income above the standard rate cut of point
What are tax credits
Allowance from the government that reduces the amount of tax owed
E.g single person tax credit , married tax credit
Reduces the amount of PAYE an employees pays
What is a form P12A
Used by the revenue to calculate the rate of tax and tax credits that the employee will be entitled too
Filled in when employee first starts working
What is a notice of ax credits
Document setting out the tax credits to which a tax payer is entitled to and the standard rate cut of point that will apply
What is a p60 form
Shows the amount of pay, income tax , PRSI and USC paid by an employee for the tax year
What is a P21 balancing statement
Completed if employees think that they have paid too much tax during the year
Form sent to the RC seeking a rebate of the tax overpaid
What is a form P45
Given by all employee to staff when they leave the job
It shows their income tax PRSI and USC paid in the last year
Form needed by next employer to calculate the correct amount of tax to deduct
