Direct taxes are taxes on income such as corporation tax.
Indirect taxes are taxes on expenditure such as VAT.
Direct Taxes in Ireland
Income tax{PAYE}: Income tax is deducted as a percentage of income. There are two main taxes: the standard rate and the higher rate. The more a person earns, the more income tax they pay.
Pay Related Social Insurance{PRSI}: PRSI is divided into 11 different classes. The class a person pays from their income determines the social welfare payments they are able to get. Employers also have to pay PRSI for each employee.
Corporation tax: Corporation tax is tax on company profits. The current rate of corporation tax in Ireland is 12.5%, which is low compared to other EU countries. For example, France's current corporation tax rate is roughly 33%.
Indirect Taxes in Ireland
Value Added Tax{VAT}: VAT is charged on the price of goods and services. It is charged at different rates on different goods and services. The standard rate of VAT is 23%. A reduced rate of 13.5% is charged on things such as fuel.
Motor tax: motor tax is paid annually by owners of motor vehicles. The cost of this depends on different factors, such as engine size.
Local Property Tax{LPT}: Local property tax is charged annually on the market value of all residential properties in Ireland. It was introduced in 2013.
