- Income Tax Rates
- Bands of taxable income
- Income Exemption Limits
- Income Levy
- Tax Residence
- Split Year Treatment
- Cross Border Workers
- Remittance Basis of Assessment
- Special Assignment Relief Program
- Seafarer Allowance
Income Tax Rates
Bands of taxable income |
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2011 |
2010 |
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| Single/Widowed(Without dependent Children) |
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| Single Parent / Widowed Parent (With dependent children) |
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| Married couple (one income) |
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| Married couple (two incomes) |
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*In the case of a married couple with two incomes the standard rate band is transferable between them up to €65,600 (the band for two income married couples). In effect this means that up to €23,800 may be transferred between them, if one spouse earns less than €23,800 there is a loss of some of the benefit of the higher band.
Income Exemption Limits
| 2011 | 2010 | |
| € | € | |
| Single/Widowed | ||
| 65 years of age and over | 18,000 | 20,000 |
| Married Couples | ||
| 65 years and over | 36,000 | 40,000 |
The relevant exemption limits are increased by €575 for each of the first two dependent children and by €830 for the third and any subsequent dependent children.
| Tax Credits @ 20% | 2011 € | 2010 € | |
| Single |
1,650 |
1,830 |
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| Married (Jointly assessed) |
3,300 |
3,660 |
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| Widowed Person in year of bereavement |
3,300 |
3,660 |
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| Widowed person no children |
2,190 |
2,430 |
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| Widowed person/single person with dependent child |
3,300 |
3,660 |
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| Additional tax Credits in years following bereavement | |||
| Year 1 |
3,600 |
4,000 |
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| Year 2 |
3,150 |
3,500 |
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| Year 3 |
2,700 |
3,000 |
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| Year 4 |
2,250 |
2,500 |
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| Year 5 |
1,800 |
2,000 |
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| Home carer’s credit* | max |
810 |
900 |
| Incapacitated child |
3,300 |
3,660 |
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| Dependent relative |
70 |
80 |
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| Age credit | single |
245 |
325 |
| married |
490 |
650 |
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| Blind person | Single |
1,650 |
1,830 |
| One spouse blind |
1,650 |
1,830 |
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| married |
3,300 |
3,660 |
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| PAYE |
1,650 |
1,830 |
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| Allowances @ 41% | |||
| Allowance to employ a carer for an incapacitated person | max |
50,000 |
50,000 |
Relief for the Long Term Unemployed
An employee who is long term unemployed is entitled to two separate allowances, as follows:
Personal Tax Allowance Child Tax Allowance
€ €
Year 1 3,810 1,270 for each qualifying child
Year 2 2,540 850 for each qualifying child
Year 3 1,270 425 for each qualifying child
An individual is treated as long term unemployed where they have been continuously unemployed for a minimum period of twelve months. The relief is also available for persons who have been in receipt of disability allowance, blind person’s pension or invalidity pension for 12 months or more, illness benefit for 3 years or more, or who are released from prison after 12 months or more.
The employer is entitled to a double deduction for qualifying employees in respect of:
- Emoluments paid to those employees in the first 36 months of employment and
- PRSI contributions on those emoluments.
Tax Residence
An individual is liable to Irish Income Tax on his worldwide income provided he/she is resident and domiciled for the tax year, subject to any specific relief under the relevant Double Taxation Agreement. To be resident an individual must be present in the state for:
- 183 days or more in that tax year, or
- 280 days in that tax year and the preceding tax year, subject to a minimum of 30 days in each year.
From 1 January 2009 presence in the State at any time during the day will count towards residency (prior to 1 January the residence test applied to presence in the State at midnight). For 2009 if counting 280 days for two consecutive years the test for 2008 will count the no of days in the State where the individual is present at midnight and the test for 2009 will apply to number of days present in the State.
Domicile can be a difficult concept but broadly means the country that an individual considers as his/her natural home.
An individual is “ordinarily resident” if he is resident for three consecutive tax years and remains ordinarily resident for three years after the tax year of departure. An ordinarily resident individual is chargeable to Irish income tax on Irish source income and also on foreign investment income exceeding €3,810 in the tax year. An Irish resident or ordinarily resident and domiciled individual will also be liable to Irish Capital Gains Tax on their worldwide gains. This leaves individuals ceasing to be Irish resident exposed to Irish tax on investment income and Capital Gains Tax for three years after the tax year of departure.
Despite the reference to three years in the paragraph above, an anti avoidance provision imposes Capital Gains Tax on individuals who dispose of shareholdings during a period of temporary non-residence, described as absences of less than 5 years.
Split Year Treatment
An individual who arrives in Ireland with the intention of becoming resident in the following tax year is liable to income tax on employment income only from the date of arrival to the following 31 December. Similarly, a resident individual who leaves Ireland other than for a temporary purpose is liable to income tax on employment income up to the date of departure only. This “split year treatment” applies to employment income only.
Relief from a liability to Irish Income Tax may also arise under provisions of Double Taxation Agreements between Ireland and other states.
Cross Border Workers
Irish resident individuals employed abroad in a jurisdiction with which Ireland has a double taxation agreement can exclude income on employment earned abroad from Irish tax. The employment abroad must be for a minimum period of 13 weeks and foreign tax must be paid on that income, and the duties must be performed wholly abroad. The individual must be present in Ireland for a minimum of one day a week during the period of qualifying employment. The relief does not apply to state or semi state employments.
From 2010 onwards an individual will be deemed present in the State if he/she is present at any time during the day, for 2009 (and prior years) the individual needed to be present at the end of the day in order to qualify for the relief.
Remittance Basis of Assessment
Individuals domiciled outside Ireland (prior to 2010 the remittance basis of taxation also applied to non-ordinarily resident Irish citizens, however this was withdrawn for the tax year 2010 onwards)are entitled to a “remittance basis” of assessment in Ireland on investment income i.e. they are only subject to tax on income brought into the country. The remittance basis does not apply to employment income except in the case of a special assignment relief program (see below).
For Non-domiciled individuals
Income:
Fully Taxable:
- All Irish source income, including the Irish workdays of a foreign employment and capital gains are taxable in Ireland regardless of whether they are remitted or not.
Not Taxable:
- Foreign employment income (non Irish workdays) and investment income are taxed only where remitted.
Capital:
- Irish citizens who are not ordinarily resident but who are resident are taxed on foreign capital gains
- Non-Irish domiciled are taxable on foreign capital gains only to the extent that they are remitted to the country.
Special Assignment Relief Program SARP
This relief applies from 1 January 2009 to individuals who are assigned to work in Ireland from abroad for a period of at least 1 year. The relief will apply to reduce taxable earnings in excess of €100,000 by 50%.
The relief is only available to non domiciled individuals who take up residence in Ireland for the first time, and exercise their duties in Ireland for the first time, in addition they must:
- Have been employed by an associated company of the Irish entity to which they are assigned prior to arrival in Ireland and continue to be paid by the overseas employer
- Previously have been tax resident and exercised the greater part of their employment in the relevant overseas jurisdiction.
- Be an employee of an EU, EEA, or treaty country (prior to 2010 the relief only applied to non EEA countries which were also treaty countries.
The overseas employer must operate Irish PAYE (and PRSI where appropriate) on the employment income. The relief will operate by way of a repayment of taxes otherwise payable after the year end.
With effect from 1 January 2011 share awards will also be eligible for tax relief under the SARP. The benefits are limited to the amount of income subject to PAYE.
Seafarer Allowance
An allowance of €6,350 from employment income is available to seafarers provided they are on an international voyage(s) i.e. a voyage beginning or ending in a port outside the State for at least 161 days in a tax year. This allowance cannot be claimed in conjunction with the split year treatment. The allowance is also available to crews of vessels servicing drilling rigs in Irish waters.
