Ireland Fact-File Part 2:
Individual Business Domestic Taxation

2.12 Ireland Individual Business Other Taxes

Other taxes

Individuals owning or operating a small business are subject to Capital Acquisitions Tax at 25% from April 2009, (the rate was previously 22% between November 20, 2008 and April 7, 2009, and 20% between December 1, 1999 and November 19, 2008) on gifts and inheritances, if either the donor of the gift/the testator or the recipient of the gift/the heir is an Irish resident.

Updated in December 2010 The threshold at which such a levy kicks in varies according to the relationship between the parties involved. In 2011, a child, stepchild, adopted child or parent) must pay the tax on gifts/inheritances over EUR332,084 (decreased by the December 2010 austerity budget from EUR414,799 previously); a parent who does not take complete ownership of an inheritance, a grandparent, a grandchild or great-grandchild, a sibling, a nephew or a niece will pay on sums of over EUR33,028 (down from EUR41,481 previously); and any other type of recipient will face Capital Acquisitions Tax on acquisitions of over EUR16,604 (down from EUR20,740 previously).

Property-related taxes which can be imposed on small business owners and operators include stamp duty, capital gains tax (if the property in question is not the taxpayer's primary residence), and capital acquisitions tax, if the property is inherited from an Irish resident.

Rates are also imposed by municipal authorities on commercial properties.

In terms of the tax treatment of property purchases, prior to the delivery of the austerity budget in December 2010, stamp duty on residential property was generally imposed at progressive rates to 9%, with an exemption for first time buyers and properties valued under a certain amount.

From the budget date (as the measures came in with immediate effect), a 1% stamp duty rate is imposed on property transactions valued at up toEUR1mn, with a 2% rate imposed on transactions valued at over EUR2mn.

On purchases of commercial property, defined by the Revenue Commission as “sites, offices, factories, other business premises, shops, public houses, land and goodwill attaching to a business”, the rates (from October 2008; prior to that, the top rate was 9%) are generally:

• Up to EUR10,000 – 0%;
• From EUR10,001 to EUR20,000 – 1%;
• From EUR20,001 to EUR30,000 – 2%;
• From EUR30,001 to EUR40,000 – 3%;
• From EUR40,001 to EUR70,000 – 4%;
• From EUR70,001 to EUR80,000 – 5%; and
• Over EUR80,000 – 6%.

Stamp duty is also payable on a number of other financial and legal documents.

General environmental taxes imposed in Ireland include a 22 cent per bag levy on plastic bags, a landfill tax of EUR20 per tonne of waste, and a levy on short and long haul flights from Ireland of EUR2 and EUR10 respectively. A carbon tax of EUR15 per tonne was introduced on petrol and diesel from midnight of December 9, 2009, and on home heating oils and gas from May 2010.

Rates (property taxes) are also imposed by municipal authorities on commercial properties.

Alternative Minimum Tax

There is no Alternative Minimum Tax for individuals in business.

Special income tax regimes for individuals in business

There are no special income tax regimes for individuals in business.

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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