all corporate trading income will be taxed at a flat rate of 12½ per cent from 2003 and corporate non-trading income will be taxed at 25 per cent from 2000
Thank you I was getting really confused, but knowing Revenue i wouldn't have put it past them tax as much as possible
unbelievable?! whats the point of doing business if you get creamed up you your eyeballs with stealth taxes
The close company surcharge is not a stealth tax. It is a long established component of Corporation Tax ( going back I think to 1976) and only applies to those companies whose activities come within it's remit.
so the corporation tax structure is setup so
* small companies and startups pay more tax
* than the likes of google and dunnes ireland ltd
sigh, crazy times we live in
Be aware of the rules relating t 2.3 o “close” companies
A close company is a company that is controlled by five or fewer shareholders or is controlled by
its directors.
The vast majority of companies in the SME sector are close companies and it is important to
know that there are a number of specific tax consequences that arise on transactions involving
such companies.
These include:
»» A 20% surcharge is levied on the after tax non-trading income of a company which is not
paid out as a dividend within 18 months of its year end.
»» A 15% surcharge arises on 50% of professional services income of a company if the income
is not distributed within 18 months.
»» Interest paid on directors’ loans may be treated, not as a tax deductible expense in certain
circumstances, but as a distribution (or dividend) paid to that director. This leads to a tax
cost of 12.5% of the interest paid.
»» Other expenses incurred by a company for its directors may also be treated as distributions
instead of tax deductible expenses. The result is that expenses cannot be offset against the
trading income of the company, leading to a tax cost of 12.5% of the expenses paid.
»» Companies must pay a “deposit” to Revenue on loans made by the company to its
shareholders of 25% of the net loan amount. The close company only obtains a refund
of this deposit when the loan is repaid by the shareholder. The company loses the deposit
if the loan to the shareholder is written off. It is also important to note that there are
Company Law regulations governing loans to directors. In particular, loans which exceed
10% of a company’s net assets breach company law. Breaches of company law can result
in prosecution.
Close companies can incur high effective tax rates due to the complex rules above.
Professional service companies pay an additional 15% on half of their undistributed income.
right so time to close up the business then and move country
they can shove their "surcharges" where the sun no shine
sigh
For this reason I do not believe that the revenue have ever been able to enforce payment of the surcharge as it is difficult to establish this test in practice.
Regards
dbran
For this reason I do not believe that the revenue have ever been able to enforce payment of the surcharge as it is difficult to establish this test in practice.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?