UK
Ireland
Corporation tax return and liability payments – what's needed
With the Irish corporation tax deadline fast-approaching on 23 September, we are calling all in-house finance and tax teams to provide their company’s information as soon as possible.
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Why is the timely filing of corporation tax returns so significant?
- To reduce risk of any late filing interest and surcharges, and
- Companies should also be mindful of their tax compliance obligations and to ensure filings are in order to reduce their exposure in the context of potential future Revenue audits.
We have provided a summary of the Ireland corporation tax compliance requirements below.
Filing Form CT1
Where a company commences a trade and generates income, the company is obligated to register for corporation tax in Ireland. This is filing a corporation tax return known as a Form CT1 and pay any tax liability due on or before the 23rd day of the ninth month after the end of the accounting period.
Companies that fail to pay and file electronically must submit their return and pay any associated tax. These companies must pay this tax on or before the 21st of the month. Interest is due at a daily rate of 0.0219% on late payments or payments that are not made in full.
The financial statements may also need to be submitted to Revenue using iXBRL software within 3 months of the due date of the Form CT1.
It is important for companies to be mindful of their tax compliance obligations, including the Ireland corporate tax rate, to ensure filings are in order and to reduce their exposure in the context of potential future revenue audits.
New companies do not have to pay preliminary tax for their first accounting period if their corporation tax liability is less than €200,000. Instead, they must pay their final corporation tax liability for the first accounting period when submitting their Form CT1.
In subsequent periods, a company whose corporation tax liability is not above €200,000 in the previous accounting period should be considered a small company. Where the previous period is less than 12 months, the tax due must be annualised to compare this to the threshold.
Small companies can base their preliminary tax for an accounting period on:
- 100% of their CT liability for the previous accounting period, or
- 90% of their CT liability for the current period (and there is provision for a top up payment to be made).
Large companies may pay a second instalment of preliminary tax due on or before 23rd day of the sixth month following the accounting year end as follows:
- 50% of the CT liability for the previous accounting period, or
- 45% of the CT liability for the current accounting period.