Value Added Tax

VAT refers to value added tax or simply, tax on the value added to a product or service (mark-up)
traded by a business.

Value added tax is charged on sales and refunded on purchases, thus tax is charged on sales less purchases.

If a business trades is a vatable product or service and has an annual turnover exceeding the VAT
threshold it must register for VAT and comply with VAT regulations.

VAT thresholds are as follows: –
Sale of products €80,000.00.
Sale of services €40,000.00.

Businesses registered for Value Added tax (VAT) must keep certain books of account as follows:

• Sales Book
• Purchases Book
• Bank Payments Book
  and
• Bank lodgements Book
  VAT returns are made bimonthly, quarter yearly, half yearly and annually.

Our services:

We process all booking for businesses and prepare and file Vaule added tax (VAT) returns by the filing deadline. We file the Value Added Tax (VAT) return using ROS (Revenue On-line Services) and, with the permission of the client we can instruct the Revenue to take payment for the VAT liability from the client’s bank account.

RCT

RCT refers to Relevant Contract Tax. It is a tax levied on contractors who by their nature are self- employed and are not subject to the PAYE system.

• Under RCT Contractors are defined as businesses involved in the following industries: –
• Construction
• Forestry
  and
• Meat processing

Sub-contractors are engaged by Principal contractors and when they are being paid the Principal contractor registers the proposed payment with the Revenue (through ROS) and the Revenue determine how much tax must be deducted from this gross payment. The Principal contractor then takes note of the tax deduction directed by the Revenue and pays the net amount to the sub-contractor. The tax deducted from the sub-contractor is paid monthly to the Collector-General by
the Principal contractor (similar to payroll taxes under the PAYE system).

All sub-contractors engaged by a Principal contractor must be registered with the Revenue Commissioners. This registration includes, the sub-contractor’s name, PPSA number, contract commencement and end dates, contract value and Revenue appointed site identification number.

Our services:

We register new contracts with Revenue for Principal contractors and obtain the Site Identification Number (SIN). We register sub-contractors engaging on new sub-contracts with Principal contractors.

We process all tax returns for Principal contractors and claim tax refunds for sub-contractors who
have had tax deducted under the RCT system.

CAT

CAT refers to Capital Acquisition Tax and is a tax on gifts and inheritances. The current tax rate is 33% of the taxable portion of the gift or inheritance. Certain thresholds exist for different categories of beneficiaries of gifts and inheritances classified as groups as follows:

Group A

The Group A threshold applies where you, the beneficiary, on the date of the gift or inheritance are:

• a child of:
• the disponer
  or
• the dispenser’s civil partner
• a minor child, under 18 years of age, of a deceased child of:
• the disponer
  or
• the disponer’s civil partner
• a minor child of the civil partner of a deceased child of:
• the disponer
  or
  the civil partner
• a foster child of the disponer, in certain circumstances
  or
• a parent of the disponer and you inherit an absolute interest of an inheritance on the death
  of your child.

Group B

The Group B threshold applies where you, the beneficiary, on the date of the gift or inheritance
are:

• a parent of the disponer, where you take a gift or a inherritance
• a brother or sister of the disponer
• a child of a brother or sister of the disponer (Favourite Nephew or Niece Relief may apply)
• a child of the civil partner of a brother or sister of the disponer
• a lineal ancestor of the disponer, such as a grandparent
  or
• a lineal descendant of the disponer such as a grandchild (other than a lineal descendant
  referred to in group A).

Group C

The Group C threshold applies where you, the beneficiary, on the date of the gift or inheritance do not have a relationship to the disponer covered in Groups A or B.

Group thresholds are as follows:-

Our services:

We process and file CAT returns for individuals who receive a gift or inheritance. We advise individuals in receipt of a gift or inheritance about their tax obligations and on all available options to reduce their CAT liability.

CGT

CGT refers to Capital Gains Tax which is tax on a capital gain which is realised when an assed is sold or disposed of for an amount which exceeds the cost of the asset.  A taxpayer may be able to apply reliefs or exemptions, which will reduce the amount of CGT that they must pay.

The main CGT reliefs and exemptions available are as follows:-
1. Indexation Relief
2. Farm Restructuring Relief
3. Revised Entrepreneur Relief
4. Principal Private Residence (PPR) Relief
5. Property acquired between 7 December 2011 and 31 December 2014
6. Disposal of a business or farm (Retirement Relief)
7. Transfer of a site from a parent to a child

Capital gains for companies

A company can make a capital gain from selling or transferring an asset. Any capital gain will be subject to tax at the rate of Capital Gains Tax.

A capital gain made by a company is usually included in the profits  for Corporation Tax.
The tax is assessed in the same accounting period that the gain is made in.

Capital gains on development land

Capital gains from selling or transferring development land are not included in a companys profits.
Instead, these gains are fully within CGT rules.

The company must report these gains in the Capital Gains (Development Land) section of the
online CT1. This is subject to the CGT pay and file deadlines.

Capital gains on assets other than development land

Capital gains are subject to the rules and rate of CGT. However, the tax liability on chargeable gains from assets, other than development land, are included in the company’s CT payment. This means the chargeable gain will be calculated at the CT rate. As the rates of CT and CGT are different, the capital gain needs to be adjusted so CGT liability
calculates correctly. When the adjusted amount calculated at the CT rate, the result is the same as
when calculated at the CGT rate.

Our services:

We process and file CGT returns for individuals and companies. We advise clients about their tax obligations and on all available options to reduce their CGT liability.

For all value added tax questions please call on +353 (0)1 457 8138 for a FREE consultation. Or fill out our contact form