Chapter 9 (a): Tax Flashcards
Tax
A compulsory payment to the government charged on income, business profits or added to the price of goods and services.
What Government Body is Responsible for Collecting Tax in Ireland?
The Office of the Revenue Commissioners
Reasons for Tax (3)
Government uses tax income to:
- Fund public services such as schools, hospitals
- Ensure equal distribution of wealth. The more you earn the more tax you pay.
- Promote or discourage activities e.g. Reduce Smoking/ plastic bags.
PAYE: Pay As You Earn
A type of income tax that people pay on their wages. This is deducted at source by the employer and paid to the revenue.
USC: Universal Social Charge
This is a tax charged on income over a certain amount.
VAT: Value Added Tax
A tax charged on goods and services. This is included in the price you pay to the shopkeeper.
LPT: Local Property Tax
A tax paid by owners of residential property.
VRT: Vehicle Registration Tax
A tax paid by those who purchase and register a new car.
Motor Tax
A tax paid by all owners of a vehicle. This money is used to improve roads.
DIRT: Deposit Interest Retention Tax
A tax paid on interest earned on savings.
CAT: Capital Acquisition Tax
A tax paid on gifts and inheritance (wealth left to another person when you die)
CGT: Capital Gains Tax
A tax paid on the profits made from the sale of assets e.g. property & investments.
Customs Duties
A tax paid on goods imported into Ireland from a foreign country.
Excise Duties
A tax paid on certain goods e.g. oil, alcohol, tobacco.
Direct Tax
Charged as income is earned. It is deducted at source. Example: PAYE.
