Tax

Question 1

What is tax?

Answer 1

Tax is a compulsory payment to the government charged on income/business profits or added to the price of goods and services.

Question 2

Who is responsible to collect tax in Ireland?

Answer 2

The office of revenue commissioners.

Question 3

What is the tax used for by the government?

Answer 3

The government uses tax to fund free services such as schools and hospitals.
Ensure equal distribution of wealth because the more you earn the more tax you pay.
Promote or discourage activities e.g. Reduce smoking and use of plastic bags with additional taxes on these items.

Question 4

What does VAT stand for? What is it a charge on?

Answer 4

Value Added Tax. Tax on goods and services included in the price.

Question 5

What does PAYE stand for? What is it a charge on?

Answer 5

Pay As You Earn. Income tax-tax on peoples wages.

Question 6

What does CGT stand for? What is it a charge on?

Answer 6

Capital Gains Tax. Tax on profits made from the sale of assets.

Question 7

What does USC stand for? What is it a charge on?

Answer 7

Universal Social Charge. A tax charged on income over a certain amount.

Question 8

What does DIRT stand for? What is it a charge on?

Answer 8

Deposit Interest Retention Tax. Tax on interest and savings.

Question 9

What does LPT stand for? What is it a charge on?

Answer 9

Local Property Tax. A tax paid by owners of residential property(s).

Question 10

What does VRT stand for? What is it a charge on?

Answer 10

Vehicle Registration Tax. A tax paid by people who register a new car.

Question 11

What does CAT stand for? What is it a charge on?

Answer 11

Capital Acquisitions Tax. A tax paid when buying gifts or receiving inheritance.

Question 12

What is Custom Duties?

Answer 12

A tax paid on goods imported into Ireland from a foreign country.

Question 13

What is Excise Duties?

Answer 13

A tax paid on certain goods oil, tobacco and alcohol.

Question 14

What is stamp duty?

Answer 14

This is a tax paid on written documents.

Question 15

What is the difference between direct and indirect tax?

Answer 15

Direct tax is charged as income is earned. (Deducted at Source)
Indirect tax is charged and as remaining income is spent on goods and services. e.g. (VAT)

Question 16

What is the difference between wages and salary’s?

Answer 16

Salary’s are fixed amounts of pay that is a regular amount of pay payed after the same amount of time for the same amount of money regardless for how many days the employee works. Usually paid in 12 monthly installments.
Wages are paid to employees per work completed. E.g. Time rate-hourly, Piece Rate-per a (e.g. brick) or commission.

Question 17

What is the time rate?

Answer 17

Wage payed based on hours worked.

Question 18

What is the piece rate?

Answer 18

Wage payed based on work completed. E.g. bricklayer payed per brick.

Question 19

What is commission? What does this provide employees with?

Answer 19

Wage payed based on how much an employee sells. The employee receives a percentage of the sail of the item in question. Usually on top of a regular salary. Commission gives employees an incentive to work harder.

Question 20

What is overtime?

Answer 20

Wage payed based on hours worked over a standard working week. Usually paid at double time.

Question 21

What is a Bonus?

Answer 21

A financial reward to employees for working hard.

Question 22

What is a wage slip?

Answer 22

A wage slip is a statement from your employer showing your gross pay, deductions and net pay.

Question 23

What is tax rate?

Answer 23

The rate of income tax. It is varies depending on a persons income. Standard rate, 20% anything higher, 40%.

Question 24

What is tax credit?

Answer 24

An amount a person’s annual tax can be reduced.

Question 25

What is the Standard Rate Cut Off Point?

Answer 25

The amount of income that will be taxed at the standard rate of 20%. Any amount greater than this point is charger at the higher rate of 40%.

Question 26

What is tax liability?

Answer 26

Tax liability is the amount of tax that must be paid to the Revenue commission.

Question 27

What is tax avoidance?

Answer 27

Reducing how much tax you have to pay in a legal way.

Question 28

What is tax evasion?

Answer 28

Not paying tax in an illegal way.

Question 29

What is Motor Tax? What does this money go towards?

Answer 29

A compulsory tax paid by all owners of vechiles. It is used to improve the roads.