Ireland Fact-File Part 1:
Business Formation for Individuals

1.7 Ireland Business Accounting

Accounting and auditing requirements for individuals in business

Limited companies are obliged to have their accounts audited, unless they are exempted (see below for more details). Sole traders and partnerships are not required to keep audited accounts, although it is obviously advisable to have one's accounts prepared by an accounting firm, if for no other reason than to provide a degree of protection in the event of a Revenue enquiry into your tax affairs.

Accounting records do not need to be maintained in Ireland (although they must be available there if required by the Revenue Commission).

When starting up in business in Ireland, accounts can be prepared from the date of commencement of business to:

• The following 31 December (the end of the tax year);
• Twelve months on from commencement of business; or
• Another appropriate date.

However, the ability to chose an alternative tax year is limited to incorporated taxpayers; small business owners and operators paying tax as individuals are restricted to the standard tax year, which is the calendar year.

Small and medium sized corporate enterprises (defined as below) may be exempt from the full annual account reporting requirements that apply to their larger counterparts, if they fulfil two of the following three criteria:

Small businesses: Balance sheet not exceeding: EUR1.9m

                              Turnover not exceeding: EUR3.81m

                              Employees not exceeding: 50

Medium-sized businesses: Balance sheet not exceeding: EUR7.62m

                              Turnover not exceeding: EUR15.24m

                              Employees not exceeding: 250

In addition, certain sizes of business may be exempt from the requirement to have the accounts appended to their annual return audited. The criteria for this exemption include the following:

In respect of the financial year in question:

• The company must be a company to which the Companies (Amendment) Act 1986 applies;
• The amount of turnover of the company must not exceed EUR7.3 million;
• The assets of the company must be less than EUR3.65 million at the end of its financial year;
• The average number of employees must not be more than 50;
• The company must not be a parent company or a subsidiary company.

Annual accounts, where required, must be submitted to the Companies Registration Office at:

Companies Registration Office
O'Brien Road,
Carlow

Additional reporting requirements for individuals in business

Company directors are, under certain circumstances (outlined in Section 45 of the Companies (Auditing and Accounting) Act 2003), required to put together statements on their company's compliance with its ‘relevant obligations' in relation to corporation tax and income tax, VAT, excise duties, and stamp duty. Relevant obligations are defined by the Revenue as “ all obligations under the Companies Acts and under tax law, together with obligations under certain other enactments”. A full list of these obligations can be found here: http://www.revenue.ie/en/business/running/business-reporting-obligations.html

In addition, in the area of reporting, the Revenue may make certain requirements of a company in addition to the specified obligations, and has therefore cautioned that: “In the context of directors' obligations under section 45 of the Companies (Auditing & Accounting) Act 2003, directors should have a procedure in place to ensure that there is appropriate internal reporting of any instance where their company is notified of any such requirement.”

Introductory Guides

Brief, clearly written summaries with links to relevant sections of the Fact-File. The Fact-File itself is linked in full below.

Ireland Artist Tax Guide

Ireland Contractor Tax Guide

Ireland Entrepreneur Tax Guide

Ireland Professional Tax Guide

Ireland Small Business Tax Guide

Ireland Sportsperson / Entertainer Tax Guide

Fact-File

Part 1: Business Formation for Individuals

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