Introduction and Basic Terminology

Question 1

How does tax impact everyday life

Answer 1

Pay tax on everyday purchase
Pay tax on employment income
Tax implications on buying and selling assets
Tax on gifts and inheritance

Question 2

What is capital aquisitions tax

Answer 2

tax on gifts and inheritance

Question 3

What are the purposes of tax

Answer 3

• Finance government activities
• Economic objectives eg reduce inflation
• Redistribute wealth - social welfare scheme
• Social issues and curving behaviour eg smoking
• Promote enterprise through grants

Question 4

What is progressive tax

Answer 4

tax rate increases more as taxable amount increases

takes into the ability to pay

Question 5

examples of taxes that use progressive tax rule

Answer 5

income tax

Question 6

what is proportional or flat tax

Answer 6

tax is charged at the same rate for everyone regardless of income or wealth

Question 7

example of proportional tax

Answer 7

capital tax

Question 8

what is regressive tax

Answer 8

tax is applied regardless of income so low and high earners pay the same amount

Question 9

examples of regressive tax

Answer 9

VAT
Customs
Carbon Tax

Question 10

What is direct tax

Answer 10

tax directly applied to the person who bears the tax burden

Question 11

examples of direct tax

Answer 11

tax on all forms of income and wealth

Question 12

what does DIRT stand for

Answer 12

deposit interest retention tax

Question 13

what is indirect tax

Answer 13

tax levied on goods and services and collected from those who do not bear the tax burden

Question 14

example of indirect tax

Answer 14

VAT
paid over tp government at different stages of production of the goods

Question 15

what is a tax base

Answer 15

number of people paying tax or area in which tax is levied

Question 16

what does it mean to broaden the tax base

Answer 16

ensure the tax system does not rely on a small number of tax payers

Question 17

what does a narrow tax base mean

Answer 17

relying on a small tax payer base, leaving government vulnerable

Question 18

what is tax planning

Answer 18

used by tax payers to reduce their tax bill by taking advantage of the legislation that is there

Question 19

what is tax avoidance

Answer 19

loopholes to reduce tax liability, not using the legislation in the intended manner

Question 20

what is tax evasion

Answer 20

deliberately breaking the law in order to avoid paying taxes or paying the correct amount due

ie not filing tax returns

Question 21

Sources of tax law in ireland

Answer 21

Legislation
Case Law precedent
European influence
EU Directives
Revenue practice

Question 22

examples of tax legislation in ireland

Answer 22

Taxes Consolidation Act 1997 (Income Tax, Corporation Tax and Capital Gains Tax)

Value-Added Tax Consolidation Act 2010

Question 23

examples of case law that influence tax

Answer 23

common law system
decisions of irish courts from binding precedents
UK case law

Question 24

examples of some of the first taxes that curved behaviour in ireland

Answer 24

Hearth tax - # fireplaces
Window tax

Question 25

what are Adam Smith's canons of taxation

Answer 25

equality certainty convenience efficiency

Question 26

what does the equity canon mean

Answer 26

there should be fairness and tax should be based on ability to pay (progressive tax)

Question 27

what is horizontal equity

Answer 27

taxpayers with equal capacity should bear the same tax burden

Question 28

example of horizontal equity

Answer 28

WE SHOULd all pay equally for streetlights as everyone benefits from them equally

Question 29

what is vertical equity

Answer 29

tax should be based on ability to pay

Question 30

how can ability to pay be measured

Answer 30

income v capital consumption v saving age, marital status, number of children

Question 31

what does certainty canon mean

Answer 31

tax payers should know when and how much they have to pay

Question 32

what are some means of improving certainty in tax

Answer 32

clear legislation administrative guidance

Question 33

what does convenience canon mean

Answer 33

it should be easy to pay eg deduction at source of income

Question 34

what does efficiency canon mean

Answer 34

from an admin perspective and it should also minimise effects on behvaiours (except when tax is trying to impact bheaviour)

Question 35

who are the stakeholders in our tax system

Answer 35

department of finance revenue tax appeals commission taxpaying community tax profession

Question 36

role of department of finance in tax system

Answer 36

advise and support minister for finance implementation of government policy preparation of annual budget initiate finance bills

Question 37

what does revenue do

Answer 37

assess, collect and manage tax

Question 38

what does the tax appeals commission do

Answer 38

hears appeals against revenue

Question 39

who are the tax profession

Answer 39

professional tax advisors and professional bodies

Question 40

what does PAYE stand for

Answer 40

pay as you earn

Question 41

what does self assesment system mean

Answer 41

calculating and paying taxes is on you for people that dont PAYE

Question 42

what is the 2022 tax year

Answer 42

12 months ended 31 decemeber 2022

Question 43

what does LPT stand for

Answer 43

local property tax

Question 44

who are the two types of individual tax payers

Answer 44

PAYE Chargeable person

Question 45

what is a chargeable person

Answer 45

a person who is in receipt of income but tax is not withheld as they get paid eg self employed

Question 46

what is the standard tax rate

Answer 46

20%

Question 47

what is the higher tax rate

Answer 47

40%

Question 48

what is the DIRT rate

Answer 48

33%

Question 49

what is the PRSI rate

Answer 49

4%

Question 50

what are examples income tax credits

Answer 50

paye credit personal or married tax credits

Question 51

what are tax relief examples

Answer 51

medical expenses pension contribution

Question 52

what is the tax relief % for medical expenses

Answer 52

20%

Question 53

what does PSWT stand for

Answer 53

professional services witholding tax

Question 54

what does RCT stand for

Answer 54

relevant contracts tax

Question 55

what is gross income

Answer 55

income from all sources

Question 56

what is taxable income

Answer 56

income after deducting personal reliefs allowed