Flashcards in Tax Deck (28):
What is tax?
Tax is a compulsory payment to the government charged on income/business profits or added to the price of goods and services.
Who is responsible to collect tax in Ireland?
The office of revenue commissioners.
What is the tax used for by the government?
The government uses tax to fund free services such as schools and hospitals. Ensure equal distribution of wealth. The more you earn the more tax you pay. Promote or discourage activities e.g. Reduce smoking and use of plastic bags.
What does VAT stand for? What is it a charge on?
Value Added Tax. Tax on goods and services included in the price.
What does PAYE stand for? What is it a charge on?
Pay As You Earn. Income tax-tax on peoples wages.
What does CGT stand for? What is it a charge on?
Capital Gains Tax. Tax on profits made from the sale of assets.
What does USC stand for? What is it a charge on?
Universal Social Charge. A tax charged on income over a certain amount.
What does DIRT stand for? What is it a charge on?
Deposit Interest Retention Tax. Tax on interest and savings.
What does LPT stand for? What is it a charge on?
Local Property Tax. A tax paid by owners of residential property(s).
What does VRT stand for? What is it a charge on?
Vehicle Registration Tax. A tax paid by people who register a new car.
What does CAT stand for? What is it a charge on?
Capital Acquisitions Tax. A tax paid when buying gifts or receiving inheritance.
What is Custom Duties?
A tax paid on goods imported into Ireland from a foreign country.
What is Excise Duties?
A tax paid on certain goods oil, tobacco and alcohol.
What is stamp duty?
This is a tax paid on written documents.
What is the difference between direct and indirect tax?
Direct tax is charged as income is earned. (Deducted at Source)
Indirect tax is charged and as remaining income is spent on goods and services. e.g. (VAT)
What is the difference between wages and salary’s?
Salary’s are fixed amounts of pay that is a regular amount of pay payed after the same amount of time for the same amount of money regardless for how many days the employee works. Usually paid in 12 monthly installments.
Wages are paid to employees per work completed. E.g. Time rate-hourly, Piece Rate-per a (e.g. brick) or commission.
What is the time rate?
Wage payed based on hours worked.
What is the piece rate?
Wage payed based on work completed. E.g. bricklayer payed per brick.
What is commission? What does this provide employees with?
Wage payed based on how much an employee sells. The employee receives a percentage of the sail of the item in question. Usually on top of a regular salary. Commission gives employees an incentive to work harder.
What is overtime?
Wage payed based on hours worked over a standard working week. Usually paid at double time.
What is a Bonus?
A financial reward to employees for working hard.
What is a wage slip?
A wage slip is a statement from your employer showing your gross pay, deductions and net pay.
What is tax rate?
The rate of income tax. It is varies depending on a persons income. Standard rate, 20% anything higher, 40%.
What is tax credit?
An amount a person’s annual tax can be reduced.
What is the Standard Rate Cut Off Point?
The amount of income that will be taxed at the standard rate of 20%. Any amount greater than this point is charger at the higher rate of 40%.
What is tax liability?
Tax liability is the amount of tax that must be paid to the Revenue commission.
What is tax avoidance?
Reducing how much tax you have to pay in a legal way.