Paying corporation tax and filing obligations
All companies registered in Ireland which carry on a trade in Ireland are liable to corporation tax and must also submit an annual return
of corporation tax (CT1) to the Revenue Commissioners. Corporation tax is assessed on the profits of a company’s accounting period at the rate of tax in force during the accounting period.
The self assessment pay-and –file system applies to companies with regard to paying Corporation Tax and filing its return are as follows:
• Compute and pay preliminary tax liability (90% of final tax liability) by the specified date File its return of income (including audited accounts where applicable) within nine months of the end of the accounting period. If this date is after the 21st of the ninth month the filing date is brought forward to 21st of the ninth month or 23rd in the case of returns filed electronically.
• Pay any balance of tax due when lodging the return i.e. within nine months of the end of the accounting period, subject to the 21/23 day rule.
• A small company is a company whose Corporation Tax liability in the preceding accounting period does not exceed €200,000. Such a company has the option of basing its preliminary tax on the corresponding corporation tax liability for the preceding accounting period.
• New or Start-up companies with a Corporation Tax liability of €200,000 or less for their first accounting period will not be required to pay Preliminary Tax in respect of that first accounting period and will instead be required to pay their final Corporation Tax liability for that accounting period at the same time as they are required to submit their Corporation Tax return, i.e. within nine months after the end of the accounting period, subject to the 21/23 day rule.
I hope we have shown that with minimal effort every non-financial manager can increase their knowledge of financial issues so that they can improve the efficiency with which they make decisions in their business. With the financial knowledge behind them we will see these managers making more informed decisions with increased confidence.
Source: Institute of Certified Public Accountants in Ireland (CPA), www.cpaireland.ie