Accountancy & Business Enquiries - FAQs
I have heard from a colleague about a tax exemption in Ireland for 'Artists'.
I am a musical composer living in London, England and concerned about the level of my UK tax bill.
Can you define what is meant by the term 'Artist' and also outline the
main features of this exemption.
Under the Irish Artists Tax Exemption 'Artist' is defined as any writer, composer, painter or sculptor who has produced a work
that is 'original and creative' and has cultural or artistic merit. Income derived from the work may be received tax free if the above
conditions are met and the taxpayer is an Irish tax resident. An advance opinion can be applied for before you commit to moving
to Ireland and a copy of your work would have to be submitted as part of this. The exemption once granted only applies from the
tax year in which you apply and accounts & tax returns have to be submitted in the normal manner. See our article
on the Irish Resident Artists' Exemption.
Does the UK's construction industry scheme apply to payments I make to my Irish site workers?
I have a UK based Construction Company and have recently been awarded a contract in the Republic of Ireland.
The UK C.I.S. scheme applies to payments made to your workers for work carried out in the UK only. Work carried out in the
Republic of Ireland falls under the Irish ' Relevant Contracts Tax ' system (RCT).
You are obliged to deduct 35% tax (rather than18%) on payments made unless the worker holds an Irish tax certificate of
authorisation called a C2. The conditions for granting a 'C2' to Irish construction workers are more favourable than the UK's
equivalent, and a subcontractor's turnover threshold does not apply.
I am moving to Ireland from the UK, do I have to pay a duty to bring my own car into Ireland?
If you bring a vehicle into Ireland it must be registered, and a Vehicle Registration Tax paid, by the end of
the next working day following its arrival in Ireland. You cannot apply for road tax, until this is done.
- What is Vehicle Registration Tax (VRT)?
Vehicle Registration Tax is chargeable on registration of a motor vehicle in the State. All motor vehicles in
the State, other than those brought in temporarily by visitors, must be registered with the Revenue
Commissioners. A vehicle must be registered before it can be licensed for road tax purposes.
- When must I Register?
If you bring a vehicle into Ireland from abroad you must register it and pay VRT by the end of the next
working day following its arrival in the State.
- How and where do I Register?
A completed declaration form together with the vehicle should be presented at any of the 32 Vehicle
Registration Offices (VRO). Declaration forms are available from any VRO. The VRT will be calculated by the
official at the VRO following inspection of the vehicle. In the case of a used vehicle you must present the
foreign registration document. If the vehicle is new, VAT is also payable.
- How is the Tax calculated?
In the case of cars and small vans, the tax is a percentage of the expected retail price, including all taxes in the State. This price is known as the Open Market Selling Price or OMSP. The VRO will calculate this tax for you.
(Source: Irish Revenue Commissioners)
I am starting my own I.T. consultancy business, do I need to charge VAT for my services?
As a business in Ireland that supplies a service, you are required to register for VAT (Value Added Tax)
when your annual turnover exceeds €25,500.
As part of our advice for your new business O'Mahony Donnelly will help you determine when/if you need to
register for VAT (Value Added Tax), how to organise your accounts and file your VAT returns.
- Who must register for VAT?
You must register for VAT if you are a taxable person and your annual turnover (
i.e. the amount of your receipts excluding VAT) exceeds or is likely to exceed the following annual limits:
€51,000 in respect of the supply of goods
€25,500 in respect of the supply of services
You may also be obliged to register for VAT if you receive taxable services from abroad or if you are a foreign
trader doing business in the State.
- What rate is VAT charged at?
The standard rate of VAT is 21%:
This applies to all goods and services that are not exempt or liable at the zero or reduced rates
Reduced rate of VAT - 13.5%:
This applies to certain fuels, buildings and building services, certain newspapers etc.
Reduced rate of VAT - 4.4%:
This applies to livestock, live greyhounds and the hire of horses.
Zero-rated goods and services:
These include exports, certain food and drink, oral medicine, certain books etc.
Exempted goods and services:
These include financial, medical and educational activities.
Accounting for VAT
VAT-registered persons, whom we refer to as traders, are liable for VAT on all sales of taxable goods
made or taxable services supplied by them within the State. In the case of transactions with other traders,
invoices showing the tax separately, must be issued.
Cumulative taxation is avoided by the system of allowing traders to credit the tax borne on their
purchases against the tax payable on their sales. This credit is allowed to a trader in respect of all
purchases for the business with a few exceptions - mainly motorcars, petrol, meals, entertainment expenses
and goods or services used for purposes for which the trader in question is not taxable. The normal taxable
period for VAT is two calendar months (i.e. January/February, March/April and so on). A VAT return for each
taxable period is due on the 19th day of the month following. payment, as appropriate, must accompany the
return.
Once a year, traders are required to provide a more detailed breakdown (known as the return of trading
details) of their trading particulars, purchases and sales, broken down by VAT rate. Traders may, if they wish,
nominate their own accounting period as the basis for this return.
Traders with low VAT liabilities may be permitted to make one annual VAT return (instead of the
bi-monthly returns). Traders who opt to pay by direct debit can also avail of this facility. These traders must
also provide the return of trading details.
(Source: Irish Revenue Commissioners)
I am an I.T. contractor operating in the UK and concerned with the financial affect that 'IR35' is having on my
business. Is there any similar legislation in Ireland?
No. The Republic of Ireland does not have any similar legislation to the UK's 'IR35' rules. Individuals trading
through their own Irish Service Company would only pay Irish tax and social insurance on the actual income that they
decide to take personally from the company. See our IR35 overview.
| 
