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Personal Taxation
Junior Cycle Business Studies
| Term | Definition |
|---|---|
| Office of the Revenue Commissioners | The state body in charge of tax collection in Ireland |
| Taxation | A mandatory payment from individuals and businesses to the government |
| Tax Liability | The amount of tax that an individual has to pay based on income, spending and assets |
| Direct Taxes | Tax paid on earned income, e.g. P.A.Y.E. |
| Indirect Taxes | Tax paid on income spent on goods and services, e.g. V.A.T. |
| Regressive Taxes | The same amount of tax is paid by all income earners, which takes a higher proportion of low earners' incomes. E.g. V.A.T. |
| Progressive Taxes | As income increases, more tax is paid, e.g. P.A.Y.E. |
| Income Tax | Self-assessed Income Tax |
| Tax Audits | As the self-employed must declare their income, tax audits are done to ensure that everything is declared |
| Value Added Tax (VAT) | A tax on goods and services bought which is included in the price |
| Pay As You Earn (PAYE) | A tax on all types of income over a certain amount with two different rates; 20% and 40% |
| Universal Social Charge (USC) | A tax on income over certain amounts |
| Customs Duties | Imported goods from outside the E.U. are taxed |
| Excise Duties | Taxes that are paid on alcohol, tobacco and fuels |
| Local Property Tax | A tax based on the value of the property |
| Stamp Duty | A tax on certain written documents such as property, financial cards and cheques |
| Motor Tax | A mandatory tax for all motor vehicle owners which is paid to local authority |
| Deposit Interest Retention Tax (DIRT) | A tax to be paid on any interest earned by savings which is subtracted by the financial institution |
| Capital Gains Tax (CGT) | A tax to be paid on the sale of assets |
| Capital Acquisition Tax (CAT) | A tax to be paid on inheritance or gifts if over a certain value |
| Tax Avoidance | A method whereby individuals or businesses legally try to reduce the amount of tax to pay |
| Tax Evasion | An illegal activity whereby individuals or businesses fail to declare some or all of their income in the hope of paying less tax |
| Personal Public Service Number (PPSN) | A specific number given to each individual in Ireland that is to be used with all state services and employment |
| Emergency Tax | A tax paid by new employees that is higher than the normal rate of tax to remind them to organise their tax as soon as possible |
| Tax Credit | Allowances made on the basis of a person's circumstances which lowers their annual tax bill |
| Tax Rate | The percentage of an individual's income that will be taxed. PAYE has two rates; the standard rate at 20% and the higher rate at 40% |
| Standard Rate Cut Off Point | The point at which you change from being taxed at the standard rate of 20% to the higher rate of 40% income tax |
| Statutory Deductions | Deductions that must be taken by law from income e.g. PAYE, PRSI, USC |
| Non Statutory Deductions | Deductions the employee chooses to have taken from their pay e.g. pension, savings, union fees |
Created by:
annemariewalsh