The Ministry of education and science of the Russian Federation Federal public educational budgetary institution of higher education

«Plekhanov Russian University of Economics»

Finance Faculty

The Department of Taxes and Taxation

SUMMARY

The theme: «Taxation of Individuals in Ireland»

Done by:

Student of 2512 group,

Finance Faculty

Bulgun Buvaeva

Research supervisor:

Marina Blagonravova

Moscow 2014

Contents

Introduction………………………………………………………………………...3

1. Taxpayers…………………………………………………………………....4

2. Tax rates…………………………………………………………………..…7

3. Assessable Income…………………………………………………………..9

4. Allowable Deductions……………………………………………….……..11

5. Filing Tax Returns and Tax Payments……………………………………..13

Conclusion………………………………………………………………………...14

Bibliography……………………………………………………………………....15

Personal tax

Personal income tax rates

	€	€
Single	20% 0 – 32,800	41% 32,801 upwards
Single parent	20% 0 – 36,800	41% 36,801 upwards
Married/civil partnership – one income couple	20% 0 – 41,800	41% 41,801 upwards
Married/civil partnership - two income couple	20% 0 – 65,600*	41% 65,601 upwards

*This assumes the second spouse/civil partner has an income of at least €23,800 per annum. If the second spouse’s/civil partner’s income is less than €23,800, the €41,800 band (married/civil partnership – one income couple) is increased by €1 for each €1 of income up to a maximum of €23,800.

Small income exemption thresholds

	€
Over 65 – Single/widowed/surviving civil partner	18,000
Over 65 – Married/civil partnership, jointly assessed	36,000
Increase per dependent child
For each of the first two children	575
For each subsequent child	830

Universal Social Charge (USC)

A Universal Social Charge (USC) applies to total income before reliefs and allowances, with the exception of capital allowances arising in the active trade or profession of the taxpayer. Personal pension contributions are not deductible when calculating the income on which the USC is payable. In addition, the USC will be charged on all employee share scheme compensation. The USC is not charged on social welfare payments or tax free termination payments.

With regard to self-employed taxpayers (carrying on a trade or profession) claiming capital allowances, and where an asset (in respect of which capital allowances are allowable for calculation of USC) is disposed of, any balancing charge arising will be subject to the USC. This ensures the correct overall USC is paid where the asset is disposed of for a value in excess of its written down value.

USC is a tax similar to income tax and should be included in the calculation of double taxation relief. This allows taxpayers to claim a credit for unrelieved foreign tax against USC on foreign income.

The USC rates are as follows:

Employees

Earnings (€)	2014
0 to 10,036*	2%
10,037 – 16,016	4%
>16,016 (aged 70 and above and medical card holders with aggregate income less than or equal to €60,000 per annum)	4%
>16,016 (aged under 70)	7%
>16,016 (aged 70 and above and medical card holders with aggregate income in excess of €60,000 per annum)	7%

*Exempt if income does not exceed €10,036

Self-employed

Income (€)	2014
0 to 10,036*	2%
10,037 – 16,016	4%
16,017 – 100,000 (aged 70 and above	4%
16,017 – 100,000 (aged 70 and above and medical card holders with aggregate	7%
16,017 – 100,000 (aged under 70)	7%
>100,000 (aged 70 and above and medical card holders)	10%
>100,000 (aged under 70)	10%

*Exempt if income does not exceed €10,036

Mortgage interest

Mortgage interest relief is no longer available to those who purchase a home after 31 December 2012 and will be abolished entirely by the end of 2017.

Mortgage interest relief allows certain taxpayers to get interest relief on part of their mortgage interest payments. Where relief is still available the mortgage provider should grant relief at source, if in doubt contact your bank or building society. Apart from the exception outlined below, tax relief is available at the levels set out in the following tables in respect of interest paid on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012.

Tax relief for first time buyers is given at a rate of 25% for years 1 and 2. For years 3, 4 and 5, relief is allowed at 22.5% and at the standard rate (currently 20%) for years 6 and 7. This applies to first time buyers who bought properties on or after 1 January 2004 and on or before 31 December 2012. A first time buyer is an individual who first purchased a residence up to 7 years preceding the current tax year.

First time buyer	€	Maximum interest on which relief is granted
Single	2,500	(10,000 x 25%) – Year 1
Married/civil partnership/widowed/surviving civil partner	5,000	(20,000 x 25%) – Year 1

For non first time buyers the rate of mortgage interest relief is 15% (with effect from 1 January 2009).

Non first time buyer	€	Maximum interest on which relief is granted
Single	450	(3,000 x 15%)
Married/civil partnership/ widowed/surviving civil partner	900	(6,000 x 15%)

Exception

Notwithstanding the rates of tax relief mentioned above, for first time buyers who drew down their first mortgage or paid their first mortgage interest payment between 2004 to 2008 inclusive, the rate of mortgage interest relief is increased to 30% of the specified limit. This 30% rate applies for these individuals for 2012 and up to and including 2017.