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Ireland Releases New Guidance On Taxpayers Preliminary Tax Obligations

Ireland Releases New Guidance On Taxpayers Preliminary Tax Obligations
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Ireland Releases New Guidance On Taxpayers Preliminary Tax ObligationsThe Irish Revenue has updated its guidance on the payment of preliminary corporation tax, to clarify due dates and the rules where there is no preliminary tax due.

The changes have been made to Tax and Duty Manual (TDM) Part 41A-07-02, which was issued in September, following the amalgamation of older guides. This guidance has newly been updated.

Large Companies


Preliminary tax for large companies is due in two instalments, providing the company's accounting period is longer than seven months.
A large company is a company whose corporation tax liability was above €200,000 in the previous accounting period.

The TDM clarifies that the first instalment is due for these companies on the earlier of:
a) the last day within six months of the start of the accounting period, or
b) the 21st day – or 23rd day for electronic payments – of the month in which the date at a) falls.

The amount due is either: 50% of the corporation tax liability for the previous accounting period, or 45% of the corporation tax liability for the current accounting period.

The second instalment is due on the earlier of:
a) 31 days before the end of the accounting period, or
b) the 21st – or 23rd day for electronic payments – of the month in which the day at a) falls.

The amount due is the balance that will bring the preliminary tax up to 90% of the final tax due for the current accounting period. A company must pay 90% of the preliminary tax in one instalment if the accounting period is less than seven months.

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Small Companies

 

Small companies make a single payment of preliminary tax.

The TDM explains that the tax is due on the earlier of:
a) 31 days before the end of the accounting period, or
b) the 21st day – or 23rd day for electronic payments – of the month in which the day at a) falls.

The amount due is either 100% of their corporation tax liability for the previous accounting period, or 90% of their corporation tax liability for the current accounting period.

No preliminary tax is due where a company is not liable to corporate tax (for instance, where it makes a loss).

New or start-up companies do not have to pay preliminary tax for their first accounting period if their corporate tax liability is less than €200,000. Instead, they must pay their final corporate tax charge for the first accounting period when submitting their corporate tax return.
In Ireland, corporate tax returns are due within nine months of the end of the accounting period.

Irish Discretionary Trust Resource Library

 

 

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