Taxation - Chapter 9 Flashcards
What is tax?
Tax is a compulsory payment to the government charged on income, business profits or added to the price of goods and services.
What is PAYE?
Pay As You Earn - Is a type of tax that people pay on their wages.
What is USC?
Universal Social Charge - is a tax charged on income over a certain amount.
What is VAT?
VAT: Value Added Tax - this is tax charged on goods and services.
What is LPT?
Local Property Tax - this is a tax paid by owners of residential property
What is VRT?
Vehicle Registration Tax - this is a tax paid by those who purchase and register a new car
What is Motor Tax
Motor Tax is a compulsory tax charged on all owners of a vehicle.
What is DIRT?
Deposit Interest Retention Tax is a tax paid on interest earned on savings.
What is CAT?
Capital Acquisition Tax is a tax paid on gifts and inheritance (wealth left to another person when you die)
What is CGT?
Capital Gains Tax - this is a tax paid on the profits made from the sale of assets e.g. property & investments
What are Custom Duties?
Customs Duties is a tax paid on goods imported into Ireland from a foreign country.
What are Excise Duties?
Excise Duties is a tax paid on certain goods e.g. oil, alcohol, tobacco.
What is Stamp Duty?
Stamp Duty is a tax paid on written documents e.g. property
What is Direct Tax?
Direct Tax is charged as income is earned. It is deducted at source. This means that the tax is charged by the person who pays the income not the person who earns the income
What is Indirect Tax?
Indirect Tax is charged as income is spent on goods and services. These are paid directly to the Revenue Commissioners by the shopkeeper.
What is Tax Avoidance?
is when an individual uses the taxation rules to reduce the amount of tax they pay. Tax avoidance is a legal practice.
What is Tax Credit?
This is an amount by which a person’s annual tax bill can be reduced by. The amount depends on the person and their individual circumstances.
What is Tax Evasion?
Tax evasion is when a person deliberately does not declare some or all of their income in order to avoid paying the correct tax. It is illegal and you can be sent to prison if you are evading tax.
What is a wage?
A Wage is payment received for work done. It is calculated on the basis of actual work completed based on time or pieces made.
What is commission?
payment received based on the value of goods sold. It motivates the employee to sell more.
What is a salary?
A Salary is a fixed annual payment made to an employee for work. This is usually paid in 12 monthly installments.
What is Tax Liability?
Tax Liability is the amount of income that must be paid over to the Revenue Commissioners
What is a wage slip?
Wage slip is a statement from your employer showing your gross pay (before deductions), all deductions made and your net pay (after deductions)
