The following is provided for information purposes only on tax in Ireland. All further queries regarding this information should be directed to the competent authority listed below.
INCOME TAX, CORPORATION TAX, RELEVANT CONTRACT TAX, PREM (EMPLOYER PAYE/PRSI)
Who is obliged to register?
▪ An Individual carrying on a taxable activity e.g. a trade or profession or a farmer
▪ A Principal/Sub Contractor in the construction, meat processing or forestry industries
▪ An individual with income from any of the following sources –
Income not taxed under PAYE e.g. payments on a commission basis or private teaching
Rental income (Case V)
Income from abroad e.g. foreign pensions, dividends
Maintenance income under a separation agreement.
▪ A Company
▪ A Partnership
▪ A Trust
▪ An Unincorporated/Voluntary body
▪ A registered Charity or Sporting Body claiming “exempt” status
▪ A Foreign business operating in Ireland.
▪ Any entity paying emoluments/pensions/fees to an employee or Director
Allocation of Registration Numbers
An Individual must have a PPSN to register (Public Private Service Number) The PPSN is allocated by the Department of Social Protection .
A Company must be incorporated in the Companies Registration Office before it can register for Tax.
A Foreign company exercising a trade in the State is obliged to register for VAT (Value Added Tax).
Form TR1 - is completed by the following customer types to register for Income Tax, PAYE/PRSI (PREM), RCT & VAT:
(a) An individual or unincorporated body
(b) A partnership, trust or foreign business
(c) A charity or voluntary body.
Form TR2 - is completed by a Company to register for Corporation Tax (CT), PAYE/PRSI (PREM), RCT & VAT
Who is obliged to register for VAT?
A taxable person is an individual, partnership, company, etc. who is required to register for VAT.
Taxable persons are obliged to register if their turnover exceeds certain limits and are engaged in any of the following activities:
▪ The supply of taxable goods or services effected within the state
▪ The acquisition of goods from other member states of the European Union (Intra Community Acquisitions)
▪ The importing of goods into the state
▪ Mail order or distance sales into the state.
Persons engaged in the above activities may elect to register for VAT if their turnover is less than the set limits but are not obliged to do so.
Persons in receipt of Fourth Schedule services.
There are certain categories of services listed in the Fourth Schedule of the VAT Act 1972 referred to as ‘received services’. When such services are received from abroad for business purposes in this State the place of supply is deemed to be in this State and it is the recipient who is liable for the payment of VAT. This provision means that persons engaged in VAT exempt activities i.e. insurance or banking who are not normally registered for VAT are obliged to register and account for VAT in respect of Fourth Schedule services received from abroad.
Farmers and Sea Fishermen may elect to register regardless of their turnover.
A foreign business exercising a trade in the State is obliged to register for VAT regardless of their turnover.
With effect from 28th March 2003 the supply of goods by a foreign supplier which includes installation and/ or assembly as part of the supply, is now subject to the reverse charge rule, that is, any person, other than a private individual, receiving the supply is accountable for the VAT charge. [Sec. 8. (1A)(f) VAT Act ‘72 refers]. This provision applies to the supply of goods only. Accordingly it does not apply to building work or associated services by a foreign non-established contractor.
It may be necessary to obtain evidence of trading where there is a doubt that the company/person is trading in the state i.e. where a foreign company or an Irish incorporated company with foreign shareholders/directors have no place of business or establishment. Evidence such as Bill of Lading in respect of the transportation of goods into Ireland may be sought. Purchase Orders or Sales Invoices, or copy of contract for construction or other services may be requested as proof of trading.
Threshold/Turnover limits for Registration
Registration is obligatory where turnover limits are exceeded during a 12-month period. The limits are as follows:
▪ €37,500 for the supply of taxable goods and services
▪ €75,000 for the supply of goods only
▪ €35,000 for distance sales to unregistered persons in the state during a calendar year
▪ €255,000 for horse trainers
▪ €41,000 for Intra community acquisition of goods from taxable persons in other EU states.
▪ A foreign business exercising a trade in the State (e.g. a UK builder) is obliged to register for VAT regardless of their turnover amount. Details of the turnover amount in the state is requested for operational purposes i.e. Sect 22 estimates.