Unless income is wholly dealt with through PAYE (deduction by employer) a tax payer must self-assessed his tax liability and pay preliminary tax, file a return and pay final tax with it. Any balance of tax that is not covered by deduction at source, must be paid.
Before 31st October in each year (extended by two weeks for ROS filers; almost all taxpayers), the taxpayer must pay a preliminary income for the current year, the balance of income tax for the previous year and file a tax return for the previous year. A capital gains tax must return must be made and current years preliminary tax must also be paid by that date. PRSI and Universal Social Charge must also be paid.
There is an extension in the case of electronic filing. As electronic filing is mandatory in almost all cases this means in practice that the effect of last date for filing for most taxpayers is the end of the second week of November.
A person liable to make an income tax return is called a chargeable person. A person whose tax liability is not wholly collected through PAYE is chargeable.A chargeable person is obliged to make a self assessed return of his own initiative and pay the applicable tax.
Revenue can issue a notice requiring a taxpayer to make a return. However this is not a precondition of the taxpayers liability. The obligation to make a return arises irrespective of whether the Revenue issues a tax return form or assessment.
A director of a company who has a direct or indirect entitlement to 15% of the share capital of the company, (a proprietary director) must make a return. A director is a chargeable person. This applies to a director of a company with limited exceptions for dormant companies with minimal income.
By concession revenue indicates that if the person only has income collected through the PAYE system a non-proprietary director (less than 15% shareholding in total) a return is not required.
A chargeable person must make a return for each tax year. This will usually be on behalf of themselves but may also be on behalf of his or her spouse in the case of joint assessment. A person may be a chargeable person in a representative capacity such as an executor or trustee.
Exemption from Returns
- A PAYE employee with non-PAYE incomes may not be obliged to make a return provided that his total income from all other sources is less than €30,000 gross and the income subject to tax is less than €5,000 and the tax liability is coded into PAYE;
- person notified by Revenue that he is not chargeable;
- company directors of dormant companies who do not carry on a trade for at least three years or have a source of investment income, have monies less than €130 on deposit and not pay any interest on loans
- Non-proprietary directors (who own or control (with connected persons) less than 15% of the company) where all of the income is taxed through PAYE;
A person who has PAYE income who is not a director and whose non-PAYE income less than €30,000 gross with net tax liability of €5000 or less which is collected through the PAYE system by adjustments of credits is not obliged to make a return. The same limits also apply to a married couple jointly assessed; €30,000 gross and €5000 liability.
It may be agreed with Revenue that no return is required. This may arise where the person has insufficient income to trigger tax.
ROS / My Account
ROS is the Revenue’s online service. PAYE, VAT, Corporation tax and personal tax returns may be made through ROS.
Users must register with Revenue. The taxpayer can obtain a digital certificate to give secure access. Likewise, agents can get a certificate to make returns for a client.
PAYE employers can avail of ROS. Where returns are made electronically, the payment dates for corporation tax and PAYE is extended to the 23rd day of the following month.
The following categories are obliged to file tax returns electronically through the Revenue Online System (ROS) and pay through it.
- Persons registering after 2016 for income tax
- Persons registered for VAT
- opening of foreign accounts or acquisition of certain offshore products which are required to be notified in the standard return.
- Persons obliged to notify third-party returns
- Persons benefiting from property,investment /seed capital, cross-border pension and certain other reliefs
It is possible to agree the person need not file electronically where they have insufficient access to the required technology or are prevented by mental or physical infirmity.
Form 11 whether in paper form or online is the standard personal income tax return. There is an online equivalent. It is deals with numerous matters and the taxpayer must confirm a range of issues relevant to taxation liability. The tax form may be partly prefilled online for convenience but the onus is on the taxpayer to adjust and change it when making the return.
A full and true disclosure must be made of all relevant facts which are material to the calculation of tax liability. This will include particulars of all income and such further particulars as is required. If this is not done, a timely tax return will not be taken as having been made.
Once the obligations have been complied with, Revenue may not generally reopen the case outside of four years from the end of the year concerned made other than in cases of negligence or fraud. Where the return is incomplete incorrect deliberate or careless (negligent) is not deemed duly made.
As part of the return the taxpayer must self assess his or her own liability and make the relevant payment. Where a person is not obliged to file electronically and they make it return in paper form by 31st August they may pay tax due on foot of the Revenue or self assessment.
If there are errors which are promptly corrected which are not careless or deliberate the return may be regarded as duly made by Revenue. The taxpayer may amend a form through ROS or by correspondence
- in order to claim an allowance credit a relief not previously claimed
- comply with tax law obligations
- to correct and error or mistake.
The general four your time limit from the end of the relevant tax year applies. In some cases shorter time limits apply for specific claims and reliefs.
A chargeable person is obliged to keep records to enable returns to be made of profits and gains. All relevant linking documents are required. Documents required for the preparation of accounts must also be kept.
Covered are all books, records, data in electronic or manual form, relating to receipts and expenditure, sales and prices of goods, assets and liabilities. The records must be kept in writing or may with the Revenue’s consent be kept in electronic or other form. They must be kept for at least six years. A person is liable to a penalty or failure to keep records .
The tax return must include all relevant information and be signed.
Third Party Return
Person carrying on a business who pay for the services of third parties must generally make a third-party return in respect of payments made. This must include details of payments for services in connection with the trade. , the formation acquisition and disposal of the trade and certain periodical lump sums.
The following is a list of third party returns i details of who should complete them. These returns must be filed annually in conjunction with the annual Corporation Tax or Income Tax Return. This can be done through Revenue’s MyEnquiries or myAccount facility under the category ‘Third Party Returns’.
Details of the following payments must be returned:
- Payments for services rendered in connection with the trade, profession, business etc., whether paid on the filer’s own behalf or on behalf of someone else; Payments for services rendered in connection with the formation, acquisition, development or disposal of the trade or business;
- Periodical or lump sum payments made in respect of any copyright. Where a consideration is given otherwise than in the form of money, particulars of the value and type of consideration should also be given.
The following payments need not be returned:
- Payments for services/activities which are not on the list set out in Appendix 1 of this manual;
- Payments to a single entity, where the aggregate of such payments in the period covered by the return does not exceed €6,000 in;
- Payments from which withholding tax has been deducted (eg, payments subject to PAYE, fees paid subject to withholding tax, payments subject to Relevant Contracts Tax, etc.);
- Payments for services in which the value of any goods provided as part of the service exceeds two thirds of the total charge;
- Payment to non-residents (however, where a Third Party operates from a business or private address in the State, he or she should be regarded as – resident);
- Payments for essential utilities such as electricity, gas, and telephone.
The taxpayer may be obliged to file Form 8-2 if he receive income, in excess of €3,810, on behalf of others. The excess of €3,810 applies to the accounting period for which Form 8-2 is being filed. Proceeds from sale of land and court awards for damages and personal injuries need not be reported.
The taxpayer is are obliged to file Form 8B-A Return of Interest paid or credited without deduction of tax. Persons carrying on a trade or business, including some financial institutions, must file form 8B-A under certain circumstances. The obligation to file arises where interest is paid or credited without deduction of tax on monies received or retained. Form 8B-A is only required where the interest paid or credited exceeds €635.
Form 8F – Returns of particulars of transactions in tangible moveable property for a consideration in excess of €19,050.
Form 8S – Return of third party information in relation to settlements involving non-resident trustees.
Form 21R – Return of third party information by nominee holders of securities.
Persons that act as an intermediary in the ordinary course of a trade or business are required to file Form 8B-B in certain circumstances. This form must be filed where they act on behalf of Irish residents in opening foreign accounts with financial institutions.
Form 8D applies to a Return of third party information by intermediaries in relation to offshore products.
Persons that act as an intermediary in the ordinary course of a trade or business are required to file Form 8D in certain circumstances. The form is required where the intermediary acts in, or in connection with, the acquisition of a material interest in an Offshore Product.