Irish Revenue Expands On Income Tax In 2009

by Jason Gorringe, Tax-News.com, London

19 January 2009

The Irish Revenue has released details of the income tax levy, income tax rates and bands, effective from January 1, 2009.

The new Income Levy, announced in last year's budget, is payable on gross income from all sources before any tax reliefs, capital allowances, losses, pension contributions or PRSI.

The rates of the Income Levy are as follows:

• 1%: Income up to EUR100,100 per annum;
• 2%: Income between EUR100,101 and EUR250,120 per annum;
• 3%: Income in excess of EUR250,120 per annum.

Exempt Categories - the levy does not apply:

• Where an individual’s income for a year does not exceed EUR18,304 per annum;
• For over 65’s where their annual income does not exceed EUR20,000 per annum for a single individual or EUR40,000 per annum for a married couple;
• For Full Medical card holders;
• To Social Welfare payments.

According the announcement by the Irish Revenue, income tax bands and rates stand as follows:

Income earned by individuals who are single/widowed without dependent children, is subject to a rate of 20% up to EUR36,400, up from EUR35,400 in 2008. Income above this threshold is subject to a rate of 41%.

Income earned by individuals who are single/widowed qualifying for One Parent Family Tax Credit, is subject to a rate of 20% up to EUR40,400, up from EUR39,400 in 2008. As above, the balance is subject to a rate of 41%.

The threshold for married couples has also increased by EUR1,000; couples with just one spouse earning will be charged 20% on earnings up to EUR45,400. Couples where both spouses are earning will be subject to a rate of 20% up to EUR45,400. A 41% income tax rate will be levied on the balance.

Personal Tax Credits remain unchanged.

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