Vat

gyaala

Is company`s income or profit taxed by VAT ?

income - all money that company earns
profit - company`s income minus different costs (like rent of house and expenses of car etc.)

gyaala

frodi

VAT is charged on sales etc by company at appropriate rates and paid to revenue usually at 2 monthly intervals. The company can reclaim VAT paid by it on legitimate expenses, eg stock etc. Company profits are calculated net of VAT and then taxed by Corporation Tax.

gyaala

Sorry my fault, I wanted to ask about CORPORATION TAX

MG

Corporation tax is on profits i.e. income less expenses. However, taxable profits are not necessarily the same as accounting profits as not all items are tax allowable and some items such as capital allowances have different treatments. Taking into account other reliefs, prior losses etc the actual tax may possibly bear little relation to the profits.

lomb

if a company made 100, and paid 12.50 tax leaving 87.50 and then paid the 87.50 to a shareholder does the shareholder pay his full income tax on the 87.50 or is he given a credit for what the company has already paid?

Nuttzz

lomb wrote:

if a company made 100, and paid 12.50 tax leaving 87.50 and then paid the 87.50 to a shareholder does the shareholder pay his full income tax on the 87.50 or is he given a credit for what the company has already paid?

he pays dividend tax at 20% ARAIR

lomb

Nuttzz wrote:

he pays dividend tax at 20% ARAIR

well if thats true that would explain why self employed company directors have become so wealthy in recent years. so basically u are saying in total the guy get 68 out of every 100 after ALL taxes? does one pay prsi on the 20%? probably not? so ur saying for certain people the tax is less than 30% and for other self employed its 47 and for paye its 55-56% as basically a paye employee pays 42%the employer pays something like 11% unlimited so he takes that out of the paye earners salary in reality, and additionally the paye employee HAS to contribute, no choice, thats fookin ridiculous!

as a self employed professional i have to pay tax under the income tax code as i cant set up a company. and taxes are 42% here +5% prsi unlimited making it 47, its 42 in the uk.

nah just checked although there is a witholding tax of 20% on the 87.50 distribution, the sharholder has to declare it as income in this country so beaning it would indeed be liable at the high rate meaning more tax needs to b paid, so it not advantagous to set up a company at all!or if u do pay urself a large salary(company directors are self employed so u dont pay as much prsi as paye employees) meaning an overall tax rate of just under 50%

http://www.cato.org/dailys/01-07-03-2.html

Nuttzz

if all the profit was paid as a dividend (it never is though) it would be taxed at 20%.

personally i pay myself a modest wage and earn extra through expenses and divies.

to the OP, as i said in another one of your threads you need to get some proper professional advice, because if you are confusing VAT with CT you could land yourself in some trouble down the road

lomb

Nuttzz wrote:

if all the profit was paid as a dividend (it never is though) it would be taxed at 20%.

I doubt it tbh can u show me a link that indicates this? i know the company withholds 20% as a withholding tax and prepayment against income tax liability of the shareholder, but u are supposed to declare it on ur tax return and pay another 22% and 5% prsi.

taxes are fookin ridiculous in this country between 47%- 55% for income taxes, anything thats left gets hit at 21% vat and with stamp duties at 9%, vrt at 50%+, and finally when u kick the bucket its another 20% if u manage to save anything after all that, its all these people claiming unemployment and theres nothing wrong with them, ,paper pushing civil servants, the crooked politicians paying too much for social services and roads/construction, all the leeches of society :mad:

Nuttzz

lomb wrote:

I but u are supposed to declare it on ur tax return and pay another 22% and 5% prsi.

supposed to alright...

lomb

Nuttzz wrote:

supposed to alright...

Well the penaltys are hugh, some guy was in the news and 'forgot' to pay 150000, 8 years ago, with interest and penalties he wrote the revenue a cheque for 1million and 20000 euros, so its more than supposed to.....

Nuttzz

thats true, but everyones tax situation is different, things can be offset against each other etc, I dont really want to discuss my personal affairs on the net other than to say a good accountant is well worth the fee.

lomb

Nuttzz wrote:

thats true, but everyones tax situation is different, things can be offset against each other etc, I dont really want to discuss my personal affairs on the net other than to say a good accountant is well worth the fee.

fair enough but i disagree with that in commonly held assumption, an accountant can do nothing with tax rates and rules. at the end of the day an accountant can make sure u claim ur ridiculous 12.5%capital allowances on equipment purchases, mayb help u avoid inheritance taxes by using the varoius forms of mortgage to put a family members name on it and transfer it over a period of many years prior to death, help u to claim all urr expenses. mayb to invest in hotels/ nursing homes/ industrial buildings where u can claim 4% a year capital allowances. buy section 23 property which are a form of capital allowances.
not allot else they can do except charge u 8 grand a year and screw u over, that u cant do urself. and an accountant is your worst enemy if u have a tax investigation, as he will bill u 150 euro an hour and even if u dont owe a penny to the taxman, u will get screwed.

my advice is if and when u have a tax audit sack the accountant and do it urself assuming u actually pay the proper amount which i believe u definately should.

Nuttzz

8 grand a year for your accountant??? you are getting seriously screwed. I have been through a tax audit before, no biggie all was (and is) in order. My audit insurance covered me for the fees incurred too.

lomb

Nuttzz wrote:

8 grand a year for your accountant??? you are getting seriously screwed. I have been through a tax audit before, no biggie all was (and is) in order. My audit insurance covered me for the fees incurred too.

Depends on turnover, ive heard of pharmacists paying 17 including the complex vat accounting involved for them,.

antoinolachtnai

You have to be critical about what they charge you for bookkeeping.

I can't see how a pharmacist's VAT could be that complex. There are software packages specifically set up to deal with an Irish pharmacy's needs. I'd be very surprised if these didn't do all the VAT calculations.

A friend of mine had a guy doing the PAYE/PRSI for his company on a nixer. He had my friend convinced that it took 16 hours a month to do the calculations for 15 employees. It was taking this guy weeks to churn out P45's, which caused a lot of understandable grief with departing employees. Then my friend realised that if he bought some payroll software, the shop manager just had to put in the hours, and he could run off payslips and P45's any time he needed to.

To be fair to accountants though, many of their clients are completely disorganized.

lomb

antoinolachtnai wrote:

You have to be critical about what they charge you for bookkeeping.

I can't see how a pharmacist's VAT could be that complex. There are software packages specifically set up to deal with an Irish pharmacy's needs. I'd be very surprised if these didn't do all the VAT calculations.

A friend of mine had a guy doing the PAYE/PRSI for his company on a nixer. He had my friend convinced that it took 16 hours a month to do the calculations for 15 employees. It was taking this guy weeks to churn out P45's, which caused a lot of understandable grief with departing employees. Then my friend realised that if he bought some payroll software, the shop manager just had to put in the hours, and he could run off payslips and P45's any time he needed to.

To be fair to accountants though, many of their clients are completely disorganized.

i should add that i dont pay an accountant, 8 grand is what i was quoted, i did it all myself and vowed 'never again' working out incometax is easy if u have the figures to hand, and know what u can deduct and what u cant and have a running total on your capital allowances for equipment. the hardest part by far is the payroll, im never doing that again myself manually and the payroll software i think it needs setting up? anyway the thing to do is hire a payroll company for that and concentrate on yourown tax as most of the time accountants actuallfail to account for your expenses and infact u pay too much tax. having a 'good accountant' is an old irish wifestale, look after your own money because no one will look after it if u dont...

Nuttzz

I use this payroll, http://www.thesaurus.ie/ it is fully reveune compliant, every easy to set up and will integrate with www.ros.ie you can even download the employees tax certs and it will allow for bik etc etc, i could go on but you get a months free trial but for €120 a year you cant go far wrong.