Tax Payment

Revenue Commissioners

The Revenue Commissioners are responsible for the administration of the principal taxes in Ireland. The Revenue Commissioners constitute a public body, which is independent of the Government, but is answerable to the government in respect of the exercise of their functions.

The Revenue Commissioners publish a significant amount of information on their website, www.revenue.ie, in relation to taxation law and practice. They publish Guidance Notes on tax legislation and tax briefings for taxpayers and tax practitioners.

Inspectors of Taxes are appointed by the Revenue Commissioners. The Inspectors make assessments of tax liability. In the event of a dispute between the taxpayer and the Revenue Commissioners, in respect of an assessment, the matter may be appealed to the independent Appeals Commissioners. If the decision of the Appeals Commissioners is disputed on that point of law, it may be referred to court.

The collection of tax is administered by a separate body; The Collector General. The Collector General and its officers collect tax payments.  The Collector General enforces the collection of unpaid taxes using the legal process or other special collection methods.

Preliminary Tax

The obligation to pay tax is separate from and arises prior to the obligation to make a return and assessment. A person liable for tax for a period must make a payment of preliminary tax by 31st October in the relevant tax year. This is extended by c. 2 weeks for electronic filing. The actual tax return is not due until the same date in the following year.

If the preliminary tax obligations have not been complied with, the tax is treated as becoming due on the due date for preliminary tax. Extra tax due following an amended assessment is due as at the original assessment unless the assessment was made on foot of a full and accurate return that has been delivered in time. In the latter cases, the liability will have to be paid within one month at the assessment for the year being received, or an interest charge will arise.

In the initial year, when a person becomes subject to tax, the tax for the previous year is nil so that no preliminary tax arises.  Preliminary tax for the second and later years is accounted for in the usual way. Revenue commissioners recommend payment of preliminary tax in the first year to avoid cash flow.

The obligation to give a taxpayer is already a chargeable person and commences a new source of income preliminary tax is paid in the usual way.

Payment of Tax Companies

In the case of corporation tax, the payment must be made within six months of the end of the accounting period. These dates have been brought forward for certain larger companies.

Small companies may pay preliminary tax based on 100% of the previous year’s tax liability if the tax liability does not exceed did not exceed €200,000. New companies which do not expect tax liability to exceed €150,000 in the first year do not have to pay preliminary tax in that year, changed to €200,000.

Large companies must pay preliminary tax in two instalments.  The first is due in the sixth month of the accounting period. It must be 50% of the tax for the preceding period or 45% of the tax for the current period. The balance, which will bring the total preliminary tax to 90% of the liability for the current period, must be paid in a second instalment must be paid by the eleventh month of the accounting period.

Preliminary Tax Companies

Preliminary tax is a pre-payment on account of the liability ultimately assessed in the tax return. The balance must be paid with the tax return for the period in the following year. Preliminary tax may be paid by direct debit in eight monthly instalments in months five to twelve. The Revenue may vary the arrangements for collection in monthly instalments.

If no preliminary tax payment has yet been made, the Revenue may issue a notice of the amount of preliminary tax, which the relevant Inspector of Tax believes to be payable. This amount is then due unless, before the date on which the return is required, that person makes a payment of preliminary tax in the normal way or gives notice that no liability will arise.

Where the Revenue is satisfied that the preliminary tax meets the liability, it may elect not to make an assessment and notify the taxpayer. The taxpayer may require an assessment if he chooses.

If the due amount of preliminary tax is not paid, interest and penalties may arise. Interest is payable at a rate of 0.011 per cent per day. Interest (at a lower rate is paid on preliminary tax overpaid).