Ireland Tax Deductions
Ireland Tax Deductions
Relief is given mainly in the form of a credit on tax payable.Some forms of relief are granted as a deduction, that is, a reduction in the taxable income.
- Most relief refers exclusively to Irish residents.
- The following amounts are subject to the definitions in law.
| Class of Relief | Amount - EUR |
|---|---|
| Basic credit | 1,650 |
| Exemption for a married couple | 3,300 |
| Exemption limits for a senior citizen | 18,000 |
| Single parent | 1,650 |
| Rent on a residential apartment | Up to 2,400 |
| Medical insurance | Up to 20% |
| Payment to an approved pension scheme | Subject to ceiling |
| Mortgage interest | 20%-25% For first time buyers |
| Tuition fees | 1,500-3,000 |
Ireland Business Deductions
In addition to the deductions/credits listed above, deductions and business expenses may be claimed as detailed below:- Offset of losses - A loss from one source of income may be offset against revenue from another source in the same tax year, including capital gains. A loss may be offset forward without any limit on the number of years.
- Transactions between affiliated parties - Transactions with affiliated companies with a material identity of ownership or control are carefully inspected by the tax authorities who compare the value of the transactions with accepted market prices.
- Financing costs -Business financing costs may generally be deducted. Financing costs for an affiliated company being held 75% or more by a non-treaty foreign owners is permitted only subject to the restrictions.
- Bad Debts - Provision for bad debts is allowable on certain conditions.
- Depreciation Expenses - The straight-line method is the usual method of depreciation ,defined as capital allowance, in Ireland.
A loss may be offset back for one year.
In a cluster of EU resident companies with controlling shareholders who have a 75% holding, a loss in one company may be offset against the profits in another company in the group.
In most cases the amount paid is not allowable as an expense.
A depreciation table is presented below:
| Asset | Annual Depreciation (%) |
|---|---|
| Computers | 12.5 |
| Building | 2 - 4 |
| Machinery and equipment | 12.5 |
| Hotels | 15 |
| Vehicles | 12.5 |
| Buildings in Inner City Improvements Areas | 50% |