Glossary

Irish tax terms in plain English

42 terms. Each one explains what the term means, where it appears on your return and which guides and tools use it.

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AVC: Additional Voluntary Contribution: extra payments into an occupational pension scheme, eligible for tax relief within limits.

CAT: Capital Acquisitions Tax: tax on gifts and inheritances above lifetime tax-free thresholds.
CG1: The Capital Gains Tax return for people who are not required to file a Form 11.
CGT: Capital Gains Tax: tax on the gain when you dispose of an asset such as shares or property (other than your main home).
Chargeable person: Someone who must self-assess and file a Form 11, for example because of trading, rental or significant non-PAYE income.
Cumulative basis: The normal payroll method: tax is calculated on your total pay and total credits from 1 January to date, so over- or under-payments earlier in the year even out.

DIRT: Deposit Interest Retention Tax: tax deducted at source by banks from deposit interest.
Domicile: Your long-term legal home, usually acquired at birth. It affects how foreign income is taxed and the Domicile Levy.

Emergency Tax: A temporary higher rate of tax applied when your employer has no Revenue Payroll Notification for you, usually in a new job.
Employment Detail Summary: Revenue's yearly record of your pay, Income Tax, USC and PRSI as reported by each employer. It replaced the P60.

Form 11: The annual Income Tax return for self-assessed taxpayers (chargeable persons), filed through ROS.

Gross income: Income before any deductions, such as pension contributions or tax.

Income Tax: Tax charged on your taxable income using rate bands (20% and 40%) and reduced by tax credits.
IT38: The Capital Acquisitions Tax return for gifts and inheritances above the reporting threshold.

LPT: Local Property Tax: an annual self-assessed tax on residential property based on its valuation band.

Marginal rate: The rate of tax that applies to the next euro you earn: 20% if you are within the standard band, 40% above it.
myAccount: Revenue's free online service for PAYE taxpayers: manage credits, review previous years, submit returns and view documents.

Net pay: Take-home pay after Income Tax, USC, PRSI and other payroll deductions.

Ordinary residence: A separate status: you become ordinarily resident after three consecutive tax years of residence, and remain so for three years after leaving.

PAYE: Pay As You Earn: the system employers and pension providers use to deduct Income Tax, USC and PRSI from pay before you receive it.
PPSN: Personal Public Service Number: your unique identifier for tax and public services. Treat it as sensitive and never enter it on PAYEWise.
Preliminary End of Year Statement: An initial view in myAccount of whether you overpaid or underpaid tax for a year, before you submit a return. It is not a final refund figure.
Preliminary tax: An advance payment of the current year's Income Tax due by 31 October from self-assessed taxpayers.
PRSA: Personal Retirement Savings Account: a personal pension product; contributions qualify for tax relief within age-related limits.
PRSI: Pay Related Social Insurance: social insurance contributions that build entitlement to State benefits and pensions.

Rate band: The portion of your income taxed at a given Income Tax rate. Income within the standard rate band is taxed at 20%; the rest at 40%.
Relief at source: Tax relief applied automatically within a payment or payroll, for example medical insurance premiums or employer pension deductions, so there is nothing extra to claim.
ROS: Revenue Online Service: the free online system for self-assessed taxpayers, businesses and agents, used to file Form 11 and pay tax.
RPN: Revenue Payroll Notification: the instruction Revenue sends to your employer showing your tax credits, rate band and USC band so payroll can calculate deductions.

Self-assessment: The system where you calculate your own tax, file a return and pay by the deadline, rather than having it deducted at source.
Standard rate: The 20% Income Tax rate that applies to income within your standard rate band.
Statement of Liability: Revenue's final statement for a tax year after you submit a PAYE Income Tax Return, showing whether you are due a refund, owe tax or are balanced.

Tax credit: A direct reduction in the Income Tax you pay. A 100 euro credit reduces your tax by 100 euro, but cannot create a refund larger than the tax you paid.
Tax Credit Certificate: Your copy of the credits, rate band and USC band Revenue has allocated to you, viewable in myAccount.
Tax refund: Repayment by Revenue of tax you overpaid, confirmed on a Statement of Liability after a return is processed.
Tax relief: An allowance, deduction or relief that reduces the income on which you pay tax, or reduces the tax itself at a set rate.
Tax residence: Rules based on days spent in Ireland that determine whether Ireland can tax your worldwide income.
Tax year: The calendar year, 1 January to 31 December, used for most Irish personal tax calculations.
Taxable income: Income left after allowable deductions and exemptions, on which Income Tax is calculated.

USC: Universal Social Charge: a separate charge on gross income above an exemption threshold, with its own rate bands.

VAT: Value-Added Tax: a tax on the supply of goods and services, collected by registered businesses.

Week 1 basis: A payroll method where each pay period is taxed on its own, ignoring earlier periods. Often used after a job change or when Revenue needs more information.