Ireland - Other taxes and levies | KPMG | GLOBAL

Ireland - Other taxes and levies

Ireland - Other taxes and levies

Taxation of international executives

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Social security tax

Are there social security/social insurance taxes in Ireland? If so, what are the rates for employers and employees?

Employer and employee

Type of insurance Paid by employer Paid by employee Total
PRSI 10.85% 4.00% 14.75%

 

An individual working in Ireland and his/her employer are required to contribute to the pay-related social insurance system (PRSI). There are three exceptions.

  • An individual on temporary assignment from another EEA country who can prove he/she will continue contributing to the social insurance system in his/her home country.
  • An individual on temporary assignment from a country with which Ireland has a reciprocal agreement who can provide a certificate of coverage from his/her home country.
  • An individual on assignment for up to 52 weeks from a country not covered by either of the above and who is not employed by an Irish employer.

For 2018, employee PRSI contribution is payable at the rate of 4 percent of employment income. In any week in which in which an employee is subject to full-rate PRSI, all earnings are subject to PRSI. Unearned income for employees in excess of €3,174 per annum is subject to PRSI. There is also a sliding scale PRSI credit of a maximum €12 per week where an individual’s weekly income is between €352 and €424. Employees earning less than EUR352 per week are exempt from employee PRSI.

Employer PRSI contributions are uncapped and levied at a rate of 10.85 percent on all taxable employment income including benefits-in-kind (but excluding certain share related benefits).

In the case of a foreign employee resident but not domiciled in Ireland and not covered by a reciprocal social security agreement, the employee PRSI contribution is payable at 4 percent on all employment income whether or not remitted to Ireland.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Ireland?

Capital acquisitions tax in Ireland consists of a gift tax charged on lifetime gifts and an inheritance tax charged on property passing on death or gifts made by a person within the two years of his/her death. From 1 December 1999, a liability to Irish gift and inheritance tax can arise where either the donor or beneficiary is resident or ordinarily resident in Ireland. In addition, the gift or inheritance of all Irish situated assets remains within the charge to Irish capital taxes regardless of the residency position of the individual.

Foreign domiciled individuals will not be considered resident or ordinarily resident in Ireland for this purpose unless he/she or she have been resident in Ireland for the five consecutive tax years prior to the gift or inheritance. This legislation was introduced on 1 December 1999. Consequently, expatriates consecutively resident in Ireland since 1 December 1999 will fall prey to these rules from 1 December 2004.

It is worth noting that anti-avoidance provisions also exist to prevent Irish domiciled but non-resident individuals artificially changing the locality of Irish situated assets to avoid a tax charge.

There is an exemption for gifts received from an individual provided the annual value received does not exceed EUR3,000 per year. Lifetime exemption thresholds apply to gifts/inheritances and depend upon the nature of the relationship between the donor and beneficiary. The following are 2018 CAT threshold limits:

Group

Threshold EUR

Relationship

Group A

310,000

Son/daughter/foster-child

Group B

32,500

Parent/niece/nephew/brother/sister/grandchild

Group C

16,250

Stranger/cousin

 

A flat rate of 33 percent applies to any taxable excess over the threshold.

From 6 December 2000, foster-children will be treated the same as other children for the purpose of gifts or inheritances, that is the Class A threshold will apply. In order to qualify for this equality of treatment, a fostered individual must have been cared for and maintained from a young age up to the age of 18 for a successive period amounting to five years. In addition, the individual must have resided with the donor (that is the foster parent) for this period.

 

From 1 January 2010 a domicile levy of EUR200,000 will apply to individuals:

  • who are Irish-domiciled in the tax year. It should be noted that for the tax years 2010 and 2011, there was an additional requirement that the individual was also an Irish citizen for the levy to apply.
  • whose worldwide income for the tax year is more than EUR1,000,000
  • whose liability to income tax in the State for the tax year is less than EUR200,000
  • whose Irish property has a market value on the valuation date in the tax year in excess of EUR5,000,000.

Real estate tax

Are there real estate taxes in Ireland?

An annual self assessed Local Property Tax (LPT) charged on the market value of all residential properties in Ireland (whether rented or occupied) is now in force in Ireland. A half year charge applied in 2013 with a full year charge applying in 2014 and thereafter. The LPT charge for a property is based on the market value on the “valuation date”. The charge ranges from €90 per annum (for properties valued under €100,000 on the valuation date) to €3,050 for properties values at €1.5m or more on the valuation date.

For 2013, the valuation date was 1 May 2013. For 2014, the “valuation date” was 1 November 2013.
The amount of LPT due for 2018 depends on the value declared for the property on 1 May 2013 and also the LPT rate applying to your property for 2018.

In order to be within the charge to LPT for 2018, an individual must own (co-own or have an interest in) the property on 1 November 2017. Individuals who have sold their residential property after 1 November 2017 will be liable to pay LPT on the property for 2018, even if it was sold before the end of 2018.

Payment of the tax can be made via the payroll system on a monthly basis or via direct debit or once off payments directly to the Irish Revenue.

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Sales/VAT tax

Are there sales and/or value-added taxes in Ireland?

Yes, there is VAT.

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Unemployment tax

Are there unemployment taxes in Ireland?

No.

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Other taxes

Are there additional taxes in Ireland that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Local taxes

There are no local taxes imposed on income of individuals in Ireland.

Stamp duty

Stamp duty is payable on the acquisition of property in Ireland.

Stamp duty on residential property is applied at flat rate of 1 percent on property values up to EUR1 million and 2 percent on any amounts over EUR1 million.

From 11 October 2017, commercial property attracts a rate of 6 percent stamp duty. The old rate of 2% continues to apply for purchasers with binding contracts in place before 11 October 201, provided the instrument for the transfer is executed before 1 January 2018 and contains a statement this effect.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g., foreign financial accounts, securities) to the country’s fiscal or banking authorities?

Yes

Non-Irish bank accounts

Irish tax resident individuals must report on their Irish tax return if they opened any non-Irish bank accounts during the tax year in question. The following must be disclosed:

  • Date bank account was opened
  • Name and addresses of the institution where the bank account was opened
  • The amount initially deposited upon the opening of the account
  • The account number
  • If the account was opened through an intermediary, details of this intermediary must be provided.

Please note that the individual who opens a non-Irish bank account is regarded as a chargeable person for the tax year the bank account was opened and is therefore required to file a tax return for that year.

Non-disclosure of ‘Offshore Matters’

From 1 May 2017, taxpayers no longer have the opportunity to make settlement under a qualifying disclosure (which can abate penalties and help the taxpayer avoid being disclosed as a tax defaulter to the public), in the case where the settlement is in relation to an ‘Offshore Matter’. The Term ‘Offshore Matter’ is broadly defined and can include any income, gains, accounts or assets arising, held or situated outside of Ireland.

© 2018 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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