Corporate Tax

Question 1

examples of gains not treated as profits, and therefore subject to tax other than CT

Answer 1

gains on development land

disposal of certain specified assets

(CGT)

Question 2

what profits are taxable to businesses that are irish resident

Answer 2

total worldwide profits

irrespective of where they arise and where they are remitted to the state

Question 3

what profits are taxable to businesses that are not irish resident

Answer 3

trading income arising through a branch/agency in the state

income from propeerty owned by/used by branch/agency in the state

chargeable gains from disposal of assets used by branch/agency in the state

Question 4

what was the old rule for company residence

Answer 4

where the central management occurred ie where the key decisions were made

Question 5

how to determine if corporation is irish resident

Answer 5

1. is it incorporated in ireland?
   YES - q 2
   NO - q 3
2. Can it avail of the treaty exemption?
   NO - Irish resident
   YES - q 3
3. is the central management and control in ireland?
   YES - Irish resident
   NO - not irish resident

Question 6

what is treaty exemption

Answer 6

some countries have double taxation agreement so that corporations are not taxed twice

Question 7

when it filing of tax due

Answer 7

8 months and 23 days after the end of the accounting period

Question 8

is corporation tax paid in reference to the accounting period or the tax year

Answer 8

accounting period

Question 9

what are the two prelim tax installments for LARGE companies

Answer 9

INITIAL:
23rd day of the 6th month of the accounting period
50% of prev years or
45% current years

FINAL:
23rd day of the 11th month of the accounting period
Enough to bring the total of the initial and final to be at least 90% of the current years liability

Question 10

how is underpayment charged

Answer 10

interest

Question 11

what are the issues with the prelim tax system

Answer 11

• hard to determine with certainty the current years tax liability
• over payment of preliminary tax can lead to cashflow issues

Question 12

how to determine if a company is a large company

Answer 12

if the previous period liability is >200,000
(must be corresponding periods ie both 12 months)

it is a large companu

Question 13

how many preliminary payments must a large company pay

Answer 13

2

Question 14

how much preliminary payments must a small company pay

Answer 14

1

Question 15

what is the first preliminary payment for a large company

Answer 15

50% of previous year’s liability

or

45% of estimate of current year’s liability

Question 16

wht is the second preliminary payment for a large company

Answer 16

enough so that the total of the first and second is at least 90% of current year’s liability estimate

Question 17

when is the first preliminary payment due for large companies

Answer 17

23rd day of the 6th month of the current period

Question 18

when is the second preliminary payment due for large companies

Answer 18

the 23rd day of the 11th month of the accounting period

Question 19

what is the preliminary payment for small companies

Answer 19

100% of last year’s liability
or
90% of current period liability estimation

Question 20

when is the payment date for small companies preliminary tax

Answer 20

23rd day of the month one before the end of the accounting period

eg Year end 31 Dec 2022
payment 23 Nov 2022

Question 21

if the accounting period is less than 12 months, how is the limit for small/large companies adjusted

Answer 21

multiplied by number of months/12

Question 22

how does preliminary tax work for new SMALL companies

Answer 22

nil

Question 23

when does tax return have to be filed by

Answer 23

23rd day of 8 month after accounting period end

Question 24

penalty for late filing

Answer 24

surcharge

Question 25

what is the standard corporation tax rate

Answer 25

12.5%

Question 26

what corporation tax rate is used for Sch D Case I and II income

Answer 26

standard
12.5%

Question 27

how are chargeable gains dealt with

Answer 27

[33%*gain]/12.5%

is the adjusted chargeable gain

this is added to the total profits

and the standard rate of tax is then used later

Question 28

what is the ct rate for passive, non trade income

ie Case III, IV, V

Answer 28

25%

Question 29

max allowable length of an accounting period for tax purposes

Answer 29

12 months

Question 30

how to split an accounting period > 12 months

Answer 30

1. First 12 months
   (total profits * 12/length)
2. Remainder
   (total profits * remainder/length)

Question 31

how long does the start up exemption last is requirements are met

Answer 31

3 years

Question 32

what is the limit for CT to be eligible for start up exemptio

Answer 32

40,000

Question 33

for what CT amounts do start ups get partial relief

Answer 33

between 40,000 and 60,000

Question 34

conditions to get start up exemption/relief

Answer 34

must be incorporated in EEA

must have only been existence since 14 Oct 2008

qualifying trade income ie not gains on disposal

lower of 40,000 and employer PRSI paid

Question 35

what assets are eligible for capital allowances

Answer 35

wholly and exclusively for trade

in use at the end of the accounting period

owned by business ie not leased

functional not setting

ie plant and machinary
motor vehicles
industrial buildings

Question 36

what is capital allowances rate

Answer 36

12.5% reducing balance

Question 37

limit of motor vehicle that is eligible for capital allowance usually

Answer 37

24,000

Question 38

what is the tax written down value of an asset

Answer 38

allowable cost less wear and tear to date

Question 39

when is the balancing charge/allowance calculated on an asset that had been receiving capital allowances

Answer 39

asset being sold

asset no longer used

where trade discontinues

Question 40

what happens to balancing charges

Answer 40

clawback of allowances

Question 41

what happens to balancing allowances

Answer 41

additonal allowance given to decrease profits

Question 42

how to calculate balancing allowance/charge

Answer 42

proceeds on sale - tax written down value

positive = charge
negative = allowance

Question 43

what are the three reliefs for balancing charges

Answer 43

1. restrict to allowances claimed
2. no balancing charge if sales proceeds <2000
3. replacement option (balancing charge used to reduce cost of new asset)

Question 44

what does it mean if periods are corresposning

Answer 44

they are of the same length

Question 45

when can a company make an additional top up payment to their prelim tax

Answer 45

if asset disposed of between paying prelim and period end

Question 46

when is prelim top up payment paid

Answer 46

within one month of the end of the accounting period