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Irish Corporation Tax: Filing & Payment Obligations

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Irish_Corporation_Tax_Filing__Payment_ObligationsCompanies which are resident in Ireland are chargeable to Irish Corporation Tax on their worldwide profits and capital gains. In order for such companies to comply with the filing and payment obligations under Irish tax law, all companies are required to file a Corporation Tax Return for each accounting period. 

Filing Obligations

Generally Irish tax resident companies are required to file the Corporation Tax Return for each financial year eight months and twenty-three days after the end of the accounting period. Therefore, as many companies may choose to align their accounting period with the calendar year end, (i.e. accounting period ended 31 December), the company’s Corporation Tax Return is due on 23 September of the following year. The Corporation Tax return must be filed via the mandatory Revenue Online Services facility offered by the Irish Revenue Commissioners.

Companies who fail to file a tax return before the deadline shall be subject to either of the following penalties:

Period from due date         

Surcharge

Maximum

Within 2 months

5% of tax liability

€12,695

Over 2 months

10% of tax liability         

€63,485

In addition to the surcharge, failure to file a Corporation Tax Return by the appropriate deadline may increase the risk of a Revenue Audit, as well as causing a possible restriction on the use of certain reliefs and allowances.

Payment Obligations For Irish Companies 

The Corporation Tax liability in the previous accounting period determines the preliminary corporation tax filing requirements for Irish companies.

Under Irish tax law a small company is defined as, a company with a Corporation Tax liability which did not exceed €200,000 in the previous accounting period.

A small company, has the option of:

  • Estimating its final tax liability for the accounting period and paying 90% of the final liability by the 23rd day of the second last month of the accounting period, or
  • Paying 100% of its corporation tax liability for the preceding accounting period.

A large company is a company with a Corporation Tax liability in excess of €200,000, and therefore must pay preliminary tax in two instalments. The first instalment is due on the 23rd day of the sixth month of the accounting period, and must equal either 50% of the preceding period’s Corporation Tax liability or 45% of the current year’s Corporation Tax liability. The second instalment is due on the 23rd day of the second last month of the accounting period, and must bring the total preliminary tax paid up to 90% of the company’s final liability for the current period.

Regardless of the fact of whether the Irish company is a small or large company for tax purposes, the balance of tax is payable when filing the Corporation Tax return for the company.

The Role Of The Agent

It is important to note that the company’s liability to Irish Corporation Tax is the responsibility of the company. However, in practice the company may choose to appoint a professional taxation advisor in order to ensure that the company’s Corporation Tax filing and payment obligations are satisfied.

Disclaimer 
Please note that this commentary does not purport to be a comprehensive review of the Corporation Tax filing and payment obligations for Irish companies. Detailed appropriate advice should be taken with regard to same.

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