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Tax facts 2018: The essential guide to Irish tax - PwC Ireland

Tax facts 2018. The essential guide to Irish tax Index Tax facts 2018 - Introduction 1 Asset management 19 Interest 33. Irish Real Estate Funds 20 Interest paid/payable 33. Global Information Reporting (FATCA & CRS) 20 Loans to finance corporate acquisitions / investment 33. Tax facts 2018 - Editor's page 2. Islamic Finance 21 Loans to acquire Interest in a Partnership 33. Deposit interest retention tax (DIRT) 34. Business taxation 3. Corporate - withholding taxes (WHT) 23 DIRT & First Time Buyers 34. Corporation tax 3. Dividend WHT 23. Corporation tax rates 3. Losses 3. Interest WHT 23 Local Property Tax 35. Royalties WHT 23 LPT Rates 35. Branch income 3. WHT on capital gains 23 Returns 36. Capital Gains 3. Professional services withholding tax (PSWT) 24 Late Payment/Non-Compliance 36. Company residence 4. WHT rate reductions and exemptions 24. R&D credit 5. Intellectual property tax deduction 6 Income tax 37. Knowledge Development Box 6 Tax treaties 25 Main personal tax credits and reliefs 37.

Tax Facts 2018 1 Tax Facts 2018 - The essential guide to Irish tax Introduction This publication is a practical and easy-to follow guide to the Irish tax system.

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Transcription of Tax facts 2018: The essential guide to Irish tax - PwC Ireland

1 Tax facts 2018. The essential guide to Irish tax Index Tax facts 2018 - Introduction 1 Asset management 19 Interest 33. Irish Real Estate Funds 20 Interest paid/payable 33. Global Information Reporting (FATCA & CRS) 20 Loans to finance corporate acquisitions / investment 33. Tax facts 2018 - Editor's page 2. Islamic Finance 21 Loans to acquire Interest in a Partnership 33. Deposit interest retention tax (DIRT) 34. Business taxation 3. Corporate - withholding taxes (WHT) 23 DIRT & First Time Buyers 34. Corporation tax 3. Dividend WHT 23. Corporation tax rates 3. Losses 3. Interest WHT 23 Local Property Tax 35. Royalties WHT 23 LPT Rates 35. Branch income 3. WHT on capital gains 23 Returns 36. Capital Gains 3. Professional services withholding tax (PSWT) 24 Late Payment/Non-Compliance 36. Company residence 4. WHT rate reductions and exemptions 24. R&D credit 5. Intellectual property tax deduction 6 Income tax 37. Knowledge Development Box 6 Tax treaties 25 Main personal tax credits and reliefs 37.

2 Tax depreciation 8 Multilateral Instrument 25 Main tax allowances 38. Leasing 8 Income tax exemption limits 38. Ireland as a holding company location 9 Value added tax (VAT) 26 Income tax rates 38. Closely held companies 10 General 26 Maternity Benefit 39. Start-up companies 10 Accounting for VAT 26 Alimony/maintenance payments 39. Corporate Tax administration 10 Rates 26 Personal Insolvency 39. Exempt activities 27 Remittance basis of taxation (RBT) 39. Transfer Pricing 13 Property 27 Domicile levy 40. Overview 13 Section 56 Authorisation (formerly Section 13A) 27 Special assignment relief programme (SARP) 40. Transfer Pricing Compliance Review 13 Withdrawal of VAT credit for bills not paid within six months 27 Cross border workers 40. Country-by-Country Reporting 13 Foreign earnings deduction (FED) 41. Employment & Investment Incentive / Startup Refunds for Advance Pricing Agreements 14 Stamp duty 29. Entrepreneurs (SURE) 41.

3 Mutual Agreement Procedure (MAP) 14 Rates 29. R&D tax credit 41. Coffey Report Recommendations 14 Transfer/purchase of residential property 29. Relief for mortgage interest payments 42. Transfer/purchase of other property 29. Rent relief for private accommodation 42. Financial services 16 Exemptions and reliefs 30. Rent a room scheme 42. Banking and treasury 16 Rental income 43. Insurance 16 Relevant contracts tax (RCT) 31 Help To Buy Incentive (HTB) 43. Aircraft leasing 17 Wide scope of RCT 31 Home Renovation Incentive (HRI) 43. Aviation Sector Capital allowances for aviation services 17 Operation of RCT 31 Living City Initiative 43. Section 110 companies 17 High Earner's Restriction 44. Real Estate Investment Trusts (REIT) 18 Employment of a carer 45. Tax facts 2018 ii Index Childcare Services Relief 45 Pension schemes 55 Local taxes 65. Self assessment - payment and returns 45 Pension contribution rules for employers 55 Environmental Taxes 65.

4 Pension contribution rules for individuals, the earnings limits 55. Employee taxation 46 Pension contribution rules for individuals, the age related limits 55 Customs and excise 66. Termination payments 46 Pension accumulation rules the lifetime pensions limit 55 Customs 66. Benefits-in-kind (BIKs) - general 46 Pension distribution rules occupational pension schemes Excise 66. the maximum pension allowed 56. BIK on company cars 46. Pension distribution rules occupational pension schemes . BIK on preferential loans 47. the maximum lump sum allowed 56 Tax contacts 68. BIK on professional subscriptions 47. Pension distribution rules PRSA and personal pensions 57. BIK on travel passes and small benefits 47. Pension distribution rules Approved Retirement Funds (ARFs) 57 Appendix 1 70. Travel and subsistence 47. Treatment of ARF Distributions for Double Taxation Agreements 58 Withholding tax on payments from Ireland 70.

5 Motor travel rates 48. Limited access rules for Additional Voluntary Contributions (AVCs) 58 Withholding tax on payments from Ireland (continued) 71. Subsistence rates - within Ireland 48. Travel and subsistence expenses for Non-Executive Directors (NEDs) 48 Capital gains tax 59 Appendix 2 72. Rates 59 Withholding tax on payments to Ireland 72. Losses 60. Employee share schemes 49 Withholding tax on payments to Ireland (continued) 73. Exemptions and reliefs 60. Unapproved employee share schemes 49. Impact of debt write-off 62. Revenue approved employee share schemes 49. Self-assessment payment and returns 62. Employer reporting requirements 50. Tax treatment of loans from employee benefit schemes 50. Capital acquisitions tax 63. General 63. PRSI 52. Calculation of CAT 63. Rates 52. Self-assessment payment and returns 63. Employee/Employer PRSI (Class A) 52. Main exemptions 63. Self-employed PRSI (Class S) 52. Main reliefs 64.

6 PRSI classification of working directors 53. Discretionary trust 64. Universal Social Charge 54. The Universal Social Charge (USC) 54. Tax facts 2018 iii Tax facts 2018 - The essential guide to Irish tax Index Introduction Welcome Business taxation Introduction Transfer Pricing This publication is a practical and easy-to follow guide to the Irish tax system. It Financial Services provides a summary of Irish tax rates as well Corporate - withholding taxes (WHT) as an outline of the main areas of Irish taxation. A list of PwC contacts is provided Tax treaties within each tax area and at the back of this guide should you require more detailed advice Value added tax (VAT). or assistance tailored to your specific needs. Stamp duty Relevant contracts tax (RCT). Interest Local Property Tax Income tax Joe Tynan Employee taxation Tax and Legal Services Leader Employee share schemes PRSI. Universal Social Charge Pension schemes Capital gains tax Capital acquisitions tax Local taxes Customs and excise Tax contacts Withholding tax on Appendix 1 payments from Ireland Withholding tax on Appendix 2 payments to Ireland Tax facts 2018 1.

7 Tax facts 2018 Editor's page Index Introduction Welcome Business taxation Welcome to the latest edition of Tax facts which This legislates for an administrative practice has been updated for amendments brought about operated by Revenue with regard to companies For more information Transfer Pricing by Finance Act 2017 which was signed into law resident in these countries and brings CGT groups contact: Financial Services on 25 December 2017. into line with loss groups. Corporate - withholding taxes (WHT) From a personal tax perspective, the principal The Act also provides for the introduction of a changes include a reduction in the Universal new capital allowances regime to grant Tax treaties Social Charge (USC) rates and increases to the employers capital allowance relief on the capital standard rate tax band and certain tax credits. cost of constructing and equipping qualifying Value added tax (VAT). fitness or childcare facilities provided for use by A new share option incentive scheme, the Key employees of the employer.

8 Stamp duty Employee Engagement Programme (KEEP), has Relevant contracts tax (RCT) been introduced. This scheme is aimed at Coffey Report Recommendations ensuring that unquoted SMEs can attract and Interest retain key employees, allowing those employees The Department of Finance commissioned an to avail of capital gains tax (CGT) treatment on independent report on Ireland 's corporate tax Fiona Carney Local Property Tax system in 2016. The report, known as the Coffey share options granted by the SMEs. Senior Manager Income tax report, was released in September 2017. It is set t: +353 (0)1 792 6095. The rate of stamp duty applicable to the transfer against the backdrop of a number of EU directives e: Employee taxation of non-residential property and to shares deriving and agreements reached with a view to their value from Irish non-residential property coordinating implementation of the OECD's Base Employee share schemes has increased to 6%, subject to certain limited Erosion and Profit Shifting (BEPS).

9 PRSI transitional measures. recommendations. Universal Social Charge The Finance Act also provides for the introduction The report makes three key recommendations of a new tax on sugar-sweetened drinks which is around modernising Ireland 's transfer pricing Pension schemes expected to come into operation in April 2018. regime, recalibrating its existing IP regime and introducing a competitive territorial regime. Capital gains tax From a corporate tax perspective, amendments were made to the intellectual property (IP) One recommendation which was adopted with Capital acquisitions tax regime to provide for the reintroduction of the immediate effect in Finance Act 2017 is the Local taxes 80% income cap for IP capital allowances. The reintroduction of the 80% cap for new spend on cap applies to IP purchased on or after 11 IP as outlined above. Customs and excise October 2017. The Department of Finance is currently engaged Tax contacts The scope of the Capital Gains Tax group relief in proactive consultation with business on the Fiona Carney Appendix 1 Withholding tax on provisions have been extended to include other recommendations to determine what Senior Manager payments from Ireland companies resident in countries with which changes should be made.

10 Tax Solutions Centre Withholding tax on Appendix 2 payments to Ireland Ireland has concluded a double tax agreement. Tax facts 2018 2. Business taxation Index Introduction Welcome Business taxation Corporation tax Trading Losses The 75% group relationship can be traced through companies resident in a relevant Transfer Pricing Corporation tax is charged on the worldwide A trading loss incurred in an accounting territory' being an EU country or another profits of companies that are tax resident in period may be offset against any of the country with whom Ireland has a double Financial Services Ireland and certain profits of the Irish following: taxation agreement. Corporate - withholding taxes (WHT) branches of non-resident companies. Profits'. for this purpose consist of income (business or trading income (including certain foreign In determining whether one company is a Tax treaties trading income comprising active income and dividends taxable at the rate) arising 75% subsidiary of another company for the investment income comprising passive in the same period purpose of the group relief provisions, the Value added tax (VAT).)


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