New Report Slays Tax Myths

January 8, 2016

The Irish Tax Institute (ITI) has today released Reshaping Ireland’s Personal Tax System, a fascinating analysis of Ireland’s personal tax system.

It’s a bold document, slaying many common tax myths.

Among its key findings are:

  • Ireland has the second most progressive personal tax system in the OECD, with only Israel ranking higher.
  • Irish taxpayers earning above the average industrial wage pay more personal tax than their counterparts in other countries
  • Irish low-income taxpayers pay less personal tax than their counterparts elsewhere.

New Report Slays Personal Tax Myths

  • 29% of income earners pay no personal tax whatsoever.
  • The top 1% of income earners pay 22% of all income tax and USC. The bottom 75% pay just 19%.
  • Our tax system continues to discriminate against the self-employed.

The Institute warns that the heavy tax burden on higher earners is likely to damage Ireland’s international competitiveness, both in attracting business investment and skilled workers to locate here.

It’s good to see these important issues being highlighted. Hats off to the ITI.

31 December Deadline for Old Tax Claims

December 7, 2015

If you are still waiting to claim a tax credit or relief for the tax year 2011, you must apply for the credit or relief by 31 December 2015. Otherwise you will lose your entitlement forever.

This is because of longstanding Revenue policy (backed by legislation) to refuse all claims over four years old

The most commonly unclaimed tax reliefs are as follows:

You should also check the lists of tax credits and tax reliefs and exemptions to ensure you are claiming everything.

Tax Refund Deadline

You can claim your tax credits or reliefs:

  • online using the Revenue PAYE Anytime facility;
  • by completing a Form 12 PAYE tax return; or
  • by writing to Revenue. (If you’re claiming for 2011, use recorded post, or at least follow up with a phone call, to ensure Revenue receive your claim before 31 December 2015.


Don’t Lose Sleep over AirBnB Tax Returns

August 11, 2015

Unfortunately, confusion and panic have greeted this morning’s news that the AirBnB have notified Revenue of income earned by their Irish hosts who welcome paying guests into their homes.

Don't lose sleep over airbnb tax returns

Thousands of Irish homeowners are now registered with AirBnB and many of these people will now worry at the prospect of receiving large tax bills.

However, the situation for most is not nearly as serious as media reports suggest.

Revenue’s guidelines on the subject (updated in a March 2015 eBrief) confirm that providing accommodation to occasional visitors does not qualify for tax exemption, but is subject to Income Tax (along with PRSI & USC) as a trade.

The flipside of this is that it is only the trading profit, and not the gross income received, which is taxable.

This means that an AirBnB host must only pay tax on the profit they earn, after deduction of all expenses.

Such expenses will include the direct costs of each booking, eg

  • AirBnB booking fee,
  • breakfast and other meals provided,
  • cleaning, etc

and also a percentage of the many indirect household costs which relate to the accommodation, including

  • insurance,
  • electricity & phone
  • repairs & maintenance
  • mortgage interest
  • wear & tear on household furniture & fittings.

The extent to which a householder can claim these latter costs depends on how much of each cost relates to business (eg AirBnB accommodation) as opposed to personal use.

For example, in a typical property where the accommodation business is incidental to its use as a family home, I’d expect that the appropriate % of such indirect costs that can be claimed would be very small.

Still, every little counts, and when you deduct all appropriate costs from your gross AirBnB income, you will probably find that the net taxable element is a fraction of the gross sum.

This net amount will be subject to income tax of 20% or 41% (40% in 2015), in addition to 4% PRSI and USC (generally up to 7%).

In addition, the other minor comfort is that we are talking here about current, as opposed to historic, income.

The information given by AirBnB to Revenue relates to the period from May to December 2014.

This income is taxable in 2014 and the deadline for filing 2014 Form 11 & Form 12 tax returns is not until 31 October next, or 12 November if filed on ROS.

This means that AirBnB hosts have plenty of time to regularise their tax situation ahead of the October/November deadlines. Obviously this should also include any such income received before May 2014.

This is a stark contrast to the catch-22 dilemma faced in the past by others with historic undeclared income, where interest and penalties often combined to generate huge liabilities.

My advice to AirBnB hosts? –

  • Firstly, don’t lose any sleep amid the current hysteria.
  • Secondly, get your affairs in order, with professional assistance if you need it, and make sure you file your 2014 (and any earlier) returns by the forthcoming deadline.

Dont Lose Sleep over AirBnB Tax Returns

12 November 2015 is ROS Pay & File Tax Deadline

April 28, 2015

Revenue have today announced an extension to this year’s Pay & File deadline for online tax returns from 31 October to Thursday, 12th November 2015.

To qualify for the extended deadline, you must, by 12 November next

  1. file your 2014 Form 11 Income Tax return using the online ROS system.
  2. make your ‘Pay & File’ payment via ROS, to cover:
  • your Preliminary Tax for 2015;  and
  • any remaining balance of Income Tax owing for 2014.

Pay & File Deadline 12 November 2015 The extension only applies, if:

  • you file your Form 11 tax return on ROS; and
  • you use ROS to make the required Income Tax payment.

It is worth noting that the ROS filing deadline this year is one day earlier than last year’s 13 November deadline, and a full 5 days ahead of the 17 November deadline that applied ten years ago, in 2005.  This is unfortunate as the tax code becomes ever more complicated and cumbersome each year.

Capital Gains Tax

The Revenue eBrief doesn’t mention any extension to the Capital Gains Tax return filing deadline of 31 October 2015.  If you are are self-assessed for Income Tax, you must file your 2014 Capital Gains tax return as part of your 2014 Form 11 Income Tax Return.

As was the case in previous years, I expect that the deadline for such ROS-filed returns should now extend to 12 November. If this affects you, I advise you to double check this in advance of 31 October.

On the other hand, if you pay all your taxes under the PAYE system, and had a Capital Gain in 2014, you must file a Form CG1 Capital Gains Tax return by 31 October 2015. The later deadline does not apply to you.

Pension Payments

In earlier years, the later ROS filing deadline has also applied for backdated tax relief on RAC, AVC and PRSA pension payments.

Today’s Revenue eBrief does not mention this particular issue although I expect that the 12 November deadline will also extend to such payments, for anyone who pays & files via ROS by 12 November.

If you are considering making a pension payment next November and wish to claim the tax relief against your 2014 liability, you should first double-check that the extended deadline applies to pension payments.

Unless you are 100% certain, it is safer to work on the assumption that the previous 31 October deadline applies, and to make any your qualifying pension payment by 31 October.

Today’s Revenue eBrief containing this announcement is here.

Budget 2015: The Full List of Measures

October 14, 2014

Here is the full list of Tax measures included in Budget 2015.

Some, but not all, of  these measures were unveiled in Minister Noonan’s Budget Speech to the Dáil this afternoon.

Michael Noonan announces Budget 2015.

Michael Noonan announces Budget 2015.

Income Tax 

The standard rate band of income tax increases by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.

The higher rate of income tax falls from 41% to 40%.


The USC rates and bands for 2015 are as follows:

Incomes of €12,012 or less are exempt.

  • Otherwise the first €12,012 is @ 1.5%
  • From €12,013 to €17,576, USC is @ 3.5%
  • From €17,577 to €70,044, USC is @ 7%
  • From €70,044 to €100,000, USC is @8%
  • PAYE income in excess of €100,000 faces a USC charge of 8%
  • Self-employed income in excess of €100,000 faces a USC charge of 11%.

There are now 8 different bands of USC, a tax which is now more complex than ever before.

The excise duty on a packet of 20 cigarettes rises  by 40 cents (including VAT). A  a pro-rata increase on other tobacco products will also take immediate effect.

The excise duty on roll-your-own tobacco rises by an additional 20 cents (including VAT) per 25g pouch, again immediate effect.

Betting Duty
Betting Duty is being extended in 2015 to remote operators and betting exchanges.

Vehicle Registration Tax (VRT)

The VRT reliefs on the purchase of

  • hybrid electric vehicles,
  • plug-in hybrid electric vehicles,
  • plug-in electric vehicles, and
  • electric motorcycles

are being extended to 31 December 2016.

The special relief on Excise Duty, which cuts the standard rate of Alcohol Products Tax by 50% on beers from microbreweries producing 20,000 hectolitres or less per annum is being extended to microbreweries  produce 30,000 hectolitres or less per annum.

Mineral oil

A 30 day deferral of excise duty on mineral oil is to be introduced.

Natural Gas as a Transport Fuel

The excise rate for Natural Gas and BioGas as a propellant (ie transport fuel) will be set at the current EU Minimum rate and this rate will be held for a period of eight years.

Artists’ Exemption 

The threshold for the artists’ exemption from Income Tax is being increased from €40,000 to €50,000.

The Exemption is also being extended to non-resident artists, who are resident in another EU/ EEA State.

The Foreign Earnings Deduction is being extended for a further 3 years until the end of 2017 and is now widened to  include Chile, Mexico and certain unspecified countries in the Middle East & Asia.

The number of qualifying days abroad is being reduced from 60 to 40.

The minimum stay in a country is cut to 3 days and now includes travelling time.

The Special Assignee Relief Programme is also being extended for a further 3 years, until the end of 2017.

The upper salary threshold is being removed.

The residency requirement is being amended to only require Irish residency.

The exclusion of work abroad is also removed.

The requirement to have been employed abroad by the employer is being reduced to 6 months.

Employment and Investment Incentive
The EII is being amended “to raise company limits, increase the holding period by 1 year and include medium-sized companies in non-assisted areas and internationally traded financial services”. These measures are subject to EU approval.

Hotels, guest houses and self-catering accommodation will remain eligible for a further 3 years, and the operation and management of nursing homes will be included for  the next 3 years.

Seed Capital Scheme
The scheme is being rebranded as “Start-Up Relief for Entrepreneurs” (SURE) and being widened to included those who have been unemployed up to 2 years.

Rent-A-Room  Scheme

The threshold for exempt income under the Rent-A-Room Scheme is being increased from €10,000 to €12,000 per annum.

Water Charges
Tax relief at 20% will be provided on water charges, up to a limit of €500 per annum. Relief will be given annually for charges paid in the previous tax year.

Home Renovation Incentive
The Home Renovation Incentive (which allows a 13.5% tax rebate on refurbishment, extension and improvement work) will now include rental
properties “owned by landlords subject to income tax”.

Capital Gains Tax

The CGT incentive relief, which provided Capital Gains Tax exemption in respect of the first 7 years of ownership, for properties purchased between 7 December 2011 and 31 December 2014 will not being extended beyond 31 December 2014.

Where property purchased in this period is held for seven years, the gains accrued in that period will not attract CGT.

Windfall Tax

The 80% Windfall Tax on land disposal gains & land development profits attributable to planning decisions is being abolished from 1 January 2015.


The amounts of long term land leasing income exempt from Income Tax rises by 50%.  A new threshold is being introduced for lease periods of 15 or more years, with income of up to €40,000 being exempted.

The long term land leasing income exemption is also being extended to companies which lease land.

The 40 years of age threshold for leasing relief is being abolished.


Income averaging, which allows full-time farmers to calculate their income tax position based on rolling average earnings over 3 years, will now be revised to calculate incomes over 5 years.

It is also extended to farmers with other income from “on-farm diversification”.


The farmer’s flat-rate addition rises from 5% to 5.2%. This addition VAT-unregistered farmers for VAT incurred on their farming inputs.


The deadline for Capital Gains Tax relief for farm restructurings  is being extended to 31 Decemeber 2016.

CGT Retirement Relief can now apply to land that has been leased for up to 25 years in total (increased from 15) ending with disposal.

Retirement Relief is being extended to land currently let under conacre (11 month letting) and which is disposed of by 31 December 2016 or enters a long-term (5-25 years) letting arrangement (ending with disposal) by that date.

CAT Agricultural Relief will now only be available:

  • for agricultural property gifted to or inherited by active farmers, and
  • to individuals who are not active farmers but who lease out the property on a long-term basis for agricultural use to active farmers.

In addition, 5-35 year Agricultural leases  to active farmers will be exempt from Stamp Duty.

Consanguinity relief, which halves the applicable rate of Stamp Duty, will be extended for a period of three years for transferors under 65 years old, where the transferee is an active farmer.

Corporation Tax

The 2003 base year restriction for the R&D Tax Credit is being removed from 1 January 2015.

The limited Corporation Tax relief on trading income (and certain capital gains) of new start-up companies in the first 3 years of trading is being extended until the end of 2015.

This 80% restriction on aggregate capital  allowances in respect of intangible assets (and any interest expense incurred on borrowings to fund the expenditure) will be removed.

The Accelerated Capital Allowances for Energy Efficient Equipment, which incentivises companies to invest in energy efficient equipment, is being extended to the end of 2017.


A new relief from DIRT will apply on savings used by first time house buyers towards the deposit on their first home.

The Dept of Finance Summary of 2015 Budget Measures is here.

Budget 2015: The Key Tax Measures

October 14, 2014

The main tax measures of Minister Noonan’s Budget 2015 Speech, announced this afternoon, are as follows:

Budget 2015

Corporate Taxes

The 12.5% Corporation Tax rate remains unchanged.

The R&D Tax Credit base year provisions will be phased out.

The 3 year Corporation Tax exemption for start-ups is to be extended.

A new “Knowledge Development Box” will be introduced to attract new inward investment.

The “Double Irish” tax loophole is to be eliminated. All Irish-registered trading companies must also be tax-resident here. This will apply with immediate effect for new companies and will be phased in for existing companies.


To encourage long term leasing of land, the income tax threshold for land leasing is to be extended by 50%.

The CGT retirement relief on farm land is to be extended.

The existing CAT relief on agri land is being restricted to actively farmed land.

Stamp duty is being scrapped on long term land leasing.

The stamp duty relief for farm transfers within families is being extended.

The range of farmers’ Income Averaging is extended from 3 to 5 years.

Income Averaging is also being extended to farmers with diversified farm income.

The farmers’ flat rate VAT addition is up from 5% to 5.5%.


The 9% VAT rate for tourism enterprises is being retained.

Pension Levy

The 0.6% pension levy is being scrapped at the end of 2014.

Property Market

The Home Renovation Incentive has attracted €190m worth of work so far.  It is being extended to rental properties whose owners are registered for income tax. This comes in with immediate effect.

The 7 year CGT exemption is being abolished.

A refund of DIRT tax will apply to first time buyers who use their savings to buy their first home.

The existing 80% windfall tax is being abolished.

Water Charges

Income Tax relief at the standard 20% rate will apply to water charges paid by householders.

SME Sector

The Foreign Earnings Deduction is being widened and extended to a range of new countries.

Income Tax

Today’s budget is intended to form the first stage in a 3-year programme of income tax reform and reductions.

The USC entry point will be increased to approx €12,000 and the other USC bands will be increased accordingly.

The 2% USC rate is being cut to 1.5%

The 4% USC rate is being cut to 3.5%

The 41% Income Tax rate is being cut t0 40%.

The standard rate (20%) tax band is being increased by €1,000 per annum.

A new USC rate of 8% for income in excess of €70,000.

A new USC rate of 11% for self-employment income in excess of €100,000.

Excise Duty

Microbreweries will enjoy an increase an the annual excise exemption ceiling. The existing relief for microbreweries was originally introduced in 2005 by Brian Cowen as Minister for Finance.

The price of 20 cigarettes will increase by 40 cents, with a corresponding increase in other tobacco products.

No rise in taxes on alcohol, petrol, diesel or VRT.

2013 Income Tax Returns Now Online

March 3, 2014

The 2013 Form 11 & Form 11E Income Tax returns are now available on the Revenue website.

The deadline for filing these returns with Revenue is 31 October next.

The Form 11E return is a shorter and simpler version of the standard Form 11 Income Tax return.

2013 Form 11 Tax Return now online

The Revenue Helpsheets for Form 11 & for Form 11E are also online.

If filing a paper tax return, you should first ensure that you are not subject to Mandatory eFiling for Income Tax returns.

Of course, the smartest and easiest way to file an Income Tax return is via ROS, Revenue’s online system.