Taxation Isadora Flashcards
What is tax
T I a c p t t g c o I
Tax is a compulsory payment to the government charged on income, It is used to fund public services e.g healthcare.
The Office of the Revenue Commissioners is responsible for collecting Tax in Ireland
What is PAYE
i a t o i t t p p o t w. T I d a s b t e a p t t r
Pay As You Earn - this is a type of income tax that people pay on their wages. This is deducted at source by the employer and paid to the revenue.
What is USC
I a t c o i o a c a
Universal Social Charge - this is a tax charged on income over a certain amount.
What is VAT
i t c o g a s
Value Added Tax - this is tax charged on goods and services.
What is LPT
I a t p b o o r p
Local Property Tax - this is a tax paid by owners of residential property
What is VRT
I a t p b t w p a r a n c
Vehicle Registration Tax - this is a tax paid by those who purchase and register a new car
What is moter tax
I a c t p f a o o a v. T m i u t i r
this is a compulsory tax paid for all owners of a vehicle. This money is used to improve roads.
What is DIRT
I a t p o i e o s
Deposit Interest Retention Tax - this is a tax paid on interest earned on savings
What is CAT
I a t p o g a i
Capital Acquisition Tax - this is a tax paid on gifts and inheritance (wealth left to another person when you die)
WHAT IS CGT
I a t p o t p m f t s o a (Example property and investments)
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
A t p o g i i i f a f c
a tax paid on goods imported into Ireland from a foreign country.
What are excise duties
a t p o c g ( EXAMPLE o a t)
a tax paid on certain goods e.g. oil, alcohol, tobacco.
What are stamp duties
T p o w d (EXAMPLE Property)
this is a tax paid on written documents e.g. property
What is direct tax
i c a i i e
Direct Tax is charged as income is earned
What is indirect tax
i c a i i s o g a s
Indirect Tax is charged as income is spent on goods and services e.g. VAT is included in the price of goods in a shop.
What is tax avoidance
W 1i u t t r t r t a o t t p
Tax Avoidance: is when an individual uses the taxation rules to reduce the amount of tax they pay e.g claiming the tax credits they are entitled to. Tax avoidance is a legal practice.
What is tax credit
i a a b w a p y t b c b r b.
Tax Credit: this is an amount by which a person’s annual (yearly) tax bill can be reduced by
What is tax evasion
i w a p d d n d s o a o t i i o t a p t c t (this is illegal and u can be sent to prison for this
Tax Evasion: is when a person deliberately does not declare some or all of their income in order to avoid paying the correct tax (or any tax at all). It is illegal and you can be sent to prison if you are found to be evading tax.
What is a wage
I p r f w d. I i c o t b o t b o a w c b o t o p m
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 time rate
wage calculated based on the number of hours worked.
What is piece rate
wage calculated based on amount of work done e.g. paid per brick
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 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).
What is gross pay
Gross Pay: is the pay before all deductions.
What is net pay
Net Pay: is gross pay minus all deductions. It is also called take-home pay.
What is statutory deductions
Statutory Deductions: These are compulsory deductions which every worker is required to pay by law e.g. PAYE, PRSI, USC
What is Non-Statutory Deductions (Voluntary):
These are not compulsory deductions.
A worker can choose to pay them e.g. pension, health insurance, trade union.
What is disposable income
is the income that remains when all income taxes and compulsory payments have been made.
What is tax rate
Tax Rate is the percentage of tax that is levied on a person’s income.
Standard rate is 20% and higher rate is 40%
What is tax credit
i t a b w a p a t b m b r
Tax Credit is the amount by which a person’s annual tax bill may be reduced. E.g. Single, Widow, Married
What is standard rate cut off point (SCROP)
Standard Rate Cut Off Point (SRCOP) is the amount of income that will be taxed at the standard rate of tax (20%). Any amount greater than the cut-off point (€36,800) will be taxed at the higher rate (40%)
What is tax liability
Tax Liability: is the amount of income that must be paid over to the Revenue Commission.
