Chapter 4 - taxation 1 ! personal taxation

What is tax

Tax is a compulsoru payment made by households consumers and business to the state to help meet the cost of running the country

Whats direct taxation plus eg

Any tax based on the your income, (eg PAYE, capital gains tax, DIRT, USC)

What is progressive tax

taxes where the percentage rate of tax a person pays increases as their income increases

Whats indirect taxation and examples of it

Indirect taxation is tax on goods/services you purchase (eg Customs, excise, stamp duty, VAT, motor tax

Whats regressive tax

Taxes where everybody pays the same no matter their income

What is CAT

Capital acquisitions tax has two parts

• gift tax (tax on gifts received by somoneo still alive)

• inheritance tax (tax on value of gifts received from another dead person)

  • tax depends on how close you are with other person

What is CGT

Capital gains tax - tax paid on profit made by individual on the sale of an asset (eg company share, painting)

Customs duty

Tax we must pau on goods brought into ireland from place outside eu, to make us want to buy non irish goods less due to their price. protects irish jobs and creates new ones

What is DIRT

Deposit interest retention tax

Financial institutions take this from everyoine and give it to revenue, charities and elderly are excused from this tax

Whats excise duty

Charged on goods when theyre manufactored or when sold, charged on products posing either

• health

• environmental

• social

risks

Whats PAYE

Pay as you earn is a tax everyone pays on their earnings.

Whats LPT

Local property tax is an annual charge on all residential properties in the state (incl houses, rentred accomadation and social housing) tax is calculated based on market value.

What is motor tax

Mandatory charge paid by owners of cars in order for them to be able to drive in public

Whats stamp duty

charged on use of items like credit and debit cards

What is USC

Universal social charge is a tax on income used by the govt to meet extra expenses of running country (eg health services)

What is VAT

Value added tax, paid on certain goods/services, ranges from 0 - 23 %

What is VRT

Vehicle registration tax is paid by anyone who registers a car in ireland, after this has been paid you get your license