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Taxation of Individuals in Ireland

Taxation of Individuals in Ireland

The income tax in Ireland                    

The income taxation system is based on the separate taxation of individuals and companies in Ireland. The income tax is levied on the income of individuals, unincorporated bodies, trustees and personal representatives. The same system applies to partnerships. Individuals concluding a partnership will be taxed as individual partners or grouping members. The personal income tax in Ireland is levied on the income earned within a tax year which coincides with the calendar year. The tax year in Ireland starts on January, 1st and ends on December, 31st.

For more information about the taxation system you may also contact our specialists in Ireland.

Individual taxation in Ireland

The taxation of individuals in Ireland is established depending on the residency of the individual. Resident individuals with an established domicile in Ireland will be taxed on the total income they earn in a calendar year, including the income they make abroad. An individual is considered an Irish resident if he or she lives in the country for more than 183 days in a tax year or 280 days accumulated in two consecutive years. Non-domiciled residents are foreign nationals living in Ireland and will be taxed on the income remitted in the country.  Non-Irish residents will be taxed on the income they make in the country. However, non-residents living in Ireland may be subject to the personal income tax of foreign investment income exceeding 3,810 euros in a tax year. Irish citizens living abroad may also be taxed on their personal incomes if they earn over 1 million euros per year or own an Irish property with a value exceeding 5 million euros.

The personal income tax rates in Ireland

Married individuals may choose how their liability with respect to the personal income tax will be assessed. They can choose between:

  • – joint assessment on the husband or wife,
  • – separate assessment,
  • – single assessment.

The standard tax rate is 20%, while the higher tax rate applying to joint assessment is 41% on the personal income tax. Unincorporated bodies and trustees are taxed at the standard rate. The personal income tax system in Ireland also establishes different standard rate bands established on a yearly basis.

For customized accounting services you may refer to our experts in Ireland.