Social security contributions
Pay-related social insurance (PRSI)
PRSI is charged on employment income, including taxable non-cash benefits. Individuals who earn less than EUR 352 in any week are not required to pay PRSI for that week.
PRSI contributions also apply in respect of income from a trade or profession or from investment income. The minimum contribution payable is EUR 500. Payment must be included with preliminary tax, which is payable on or before 31 October of each year. Self-employed persons whose income from all sources is less than EUR 5,000 for 2021 are not liable to PRSI. The self-employed PRSI contribution rate is 4%, which is in line with the rate applicable to employees.
The 2021 PRSI rates are as follows:
|Earnings||Employer (%)||Employee (%)|
|Class A1 - most employed persons||11.05||4|
|Class S1 - proprietary and non-executive directors not insurable under Class A||0||4|
- A reduced rate of employer PRSI of 8.8% applies where earnings are below the threshold of EUR 398, from 1 January 2021 onwards.
- Self-employed persons whose income from all sources is less than EUR 5,000 per year are not liable to PRSI.
- For gross earnings between EUR 352.01 and EUR 424, the amount of the PRSI charged at 4% is reduced by a tapered weekly PRSI credit.
Employee PRSI applies to all share-based remuneration. PRSI on share awards (restricted stock units [RSUs], restricted stock awards, and performance share awards) is collected at source as part of the PAYE salary withholding tax (WHT) system. Employee PRSI also applies to Revenue Approved Profit Sharing (APSS) and Save As You Earn (SAYE) schemes.
Universal Social Charge (USC)
The USC is a tax payable on gross income, including notional pay, after relief for certain capital allowances but before deducting pension contributions.
The rates for the USC (from 2021 onwards) are as follows for an individual below the age of 70:
|Description (EUR)||Rate (%)|
|Total income below 13,000 per annum||0|
|Income up to 12,012 per annum||0.50|
|Income between 12,012.01 and 20,687 per annum||2.00|
|Income between 20,687.01 and 70,044 per annum||4.50|
|Income over 70,044 per annum||8.00|
|Income over 100,000 (self-assessed income only)||11.00|
For individuals aged 70 years or over, whose aggregate income for the year is EUR 60,000 or less, or individuals in possession of a medical card and whose aggregate income for the year is EUR 60,000 or less, the rates are as follows:
|Description (EUR)||Rate (%)|
|Total income below 13,000 per annum||0|
|On the first 12,012 per annum||0.5|
|Income over 12,012 per annum||2.0|
Individuals over 70 in possession of a full medical card are liable to the 4.50% and 8% rate if their income is over EUR 60,000.
All Department of Employment Affairs and Social Protection payments and income already subjected to DIRT are exempt from the USC.
Employers are required to calculate the USC on a cumulative basis.
USC on share awards (RSUs, restricted stock awards, and performance share awards) is collected at source as part of the PAYE salary WHT system. USC applies to APSS and SAYE schemes.
Net wealth/worth taxes
There are currently no net wealth/worth taxes on individuals in Ireland.
Capital Acquisitions Tax (CAT)
A CAT is levied on assets passing on death and on lifetime gifts. A gift or inheritance will be subject to CAT if either the donor or the beneficiary is resident or ordinarily resident in Ireland, irrespective of domicile status. Gifts or inheritances of assets situated in Ireland are also subject to CAT regardless of the residence status of the donor or beneficiary. The beneficiary generally bears the liability for the tax, and self-assessment rules apply.
Local Property Tax (LPT), payable in respect of residential properties, operates through a system of self-assessment. The following persons are liable to pay LPT:
- Owners of Irish residential property, regardless of whether they live in Ireland or not.
- Local authorities or social housing organisations that own and provide social housing.
- Lessees who hold long-term leases of residential property (for 20 years or more).
- Holders of a life-interest in a residential property.
- Persons with a long-term right of residence (for life or for 20 years or more) that entitles them to exclude any other person from the property.
- Landlords where the property is rented under a short-term lease (for less than 20 years).
- Personal representatives for a deceased owner (e.g. executor/administrator of an estate).
- Trustees, where a property is held in a trust.
Where none of the above categories of liable person applies, the liability falls on the person who occupies the property on a rent-free basis and without challenge to that occupation.
The intended next valuation date for properties was 1 November 2020. However, this valuation date has been postponed until 1 November 2021 due to the COVID-19 pandemic (the previous valuation date of 1 May 2013 will continue to be applicable until then).
The LPT rate is 0.18% for properties up to a market value of EUR 1 million. Above EUR 100,000, there is a system of market value bands of EUR 50,000 up to EUR 1 million, and the tax liability will be calculated by applying the tax rate to the mid-point of the band. LPT on residential properties valued over EUR 1 million will be charged at 0.18% on the first EUR 1 million and 0.25% on the excess over EUR 1 million.
If you are the liable person in respect of the property, you are responsible for completing and submitting the return and paying the tax due. For LPT purposes, residential property means any building or structure (or part of a building) that is used as, or is suitable for use as, a dwelling and includes any shed, outhouse, garage, or other building or structure and includes grounds of up to one acre.
The 2021 Payment Instruction was due to be submitted to the Irish Revenue by 25 November 2020. Payment is due by 11 January 2021. A property does not have to be re-valued for 2020 (as outlined above). The market value/valuation band declared on the 2013 LPT1 Return applies for the period 2013 through 2020.
If arrangements have not been made to pay the tax in full or by phased payments, the homeowner should access the Revenue LPT Online service immediately to file a 2021 Payment Instruction in order to minimise interest charges. If the LPT was paid by phased payment method, the full charge was deferred, or an exemption was claimed, the current payment method/exemption will automatically apply for 2021, and there is no requirement to contact Irish Revenue.
If a liable person fails to submit a return, the Irish Revenue can estimate the LPT due. A rate of 8% per annum will be charged on the amount outstanding. A maximum penalty of EUR 3,000 will be imposed for failure to submit a return or for knowingly undervaluing property to reduce LPT payable. Where the LPT remains outstanding, a charge will attach to the property. Chargeable persons for income tax/corporation tax/CGT, who are also designated liable persons for LPT, may incur an LPT generated surcharge of 10% of their income tax/corporation tax/CGT liability, where the LPT return is outstanding or agreed payment arrangement is not being met at the date of filing the income tax/corporation tax/CGT return. There are a limited number of exemptions available.
Luxury and excise taxes
Excise duties are chargeable on most hydrocarbon oil products, electricity supply, alcoholic drinks, and tobacco products imported into or produced in Ireland. In April 2018, a Sugar Sweetened Drinks Tax was introduced in Ireland.
Stamp duty is a tax on instruments. It is payable on transfers of land and on other assets where legal title cannot be passed by delivery. It is also chargeable on all instruments of transfer executed in Ireland, and on instruments, wherever executed, which relate to Irish property or to any matter done or to be done in Ireland.
Stamp duty rates of 1% to 2% apply for residential property. Stamp duty is levied at 1% on transfers of Irish shares, where the value of the shares exceeds EUR 1,000.
The 6% rate of stamp duty on non-residential property was increased to 7.5%, effective from 9 October 2019.
A stamp duty of EUR 1 applies to an insurance policy, other than life insurance, relating to risks located in Ireland. The stamp duty is normally collected under the terms of a composition agreement, which provides for regular, usually quarterly, payments of duty.
A domicile levy of up to EUR 200,000 was introduced with effect from 1 January 2010.
This levy applies to individuals who are Irish domiciled in the relevant tax year, irrespective of their tax residence position. It will apply if an individual has:
- worldwide income (as defined) exceeding EUR 1 million
- a liability to income tax in Ireland of less than EUR 200,000, and
- Irish located property with a market value in excess of EUR 5 million on the valuation date (i.e. 31 December in the relevant tax year).
The domicile levy must be paid on a self-assessment basis, and any Irish income tax paid will be allowed as a credit against the levy, provided such tax has been paid at the same time or before the levy for the year is paid. Individuals liable to this levy must file a return and pay the appropriate levy by 31 October following the valuation date. However, Irish Revenue may issue a notice where they have reason to believe an individual is liable to the levy, requiring the delivery of a domicile levy return and payment within 30 days of the date of the notice.