Revenue Note for Guidance

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Revenue Note for Guidance

PART 18A

INCOME LEVY

Overview

Part 18A provides for the income levy on aggregate income from all sources with effect from 1 January 2009.

With effect from 1 January 2009 the annual rate of charge of income levy is as set out in section 531C.

The income levy applies to gross income without the application of relieving provisions and specific exemptions provided for in the Income Tax Acts. Therefore, the income levy applies on the income from, for example, income from patent royalties, income from mining operations, profits from woodlands and the exempt earnings of writers, composers and artists. The income levy is also applied before the deduction of capital allowances, relief for pension contributions, double rent allowance, film relief, donations as an expense or section 23 type reliefs. The income levy does, however, allow for the deduction of normal expenses associated with a trade.

All social welfare payments and similar type payments made by other State agencies are excluded from the income levy. Holders of full medical cards are also exempt from the income levy.

There are a number of minor income sources that are statutorily provided with an exemption in the Income Tax Acts, and these exemptions also apply in relation to the income levy.

With effect from the year of assessment 2011 and subsequent years of assessment income levy shall cease to be charged, subject to section 531AY.

531A Definitions (Part 18A)

Summary

This section details the definitions to be used in Part 18A in relation to the income levy.

Details

(1) “aggregate income for the year of assessment” means the aggregate of the individual’s relevant emoluments in the year of assessment, including relevant emoluments that are in whole or in part in respect of a year other than the year in which they are paid, and relevant income for the year of assessment.

“Collector-General” has the same meaning as it has in section 851.

“employee” and “employer” have the same meanings as they have in section 983.

“excluded emoluments” mean emoluments gifted to the Minister for Finance under section 483.

“income levy” has the meaning assigned to it by section 531B.

“income tax month” means a calendar month.

“PAYE Regulations” means the Income Tax (Employments) (Consolidated) Regulations 2001.

“relevant emoluments” and “relevant income” shall have the meanings construed in accordance with paragraphs (a) and (b) of the Table to section 531B(1).

“similar type payments” means payments which are of a similar type to payments made under the Social Welfare Acts but which are made by –

  • The Health Service Executive,
  • The Department of Community, Rural and Gaeltacht Affairs,
  • The Department of Enterprise, Trade and Employment,
  • The Department of Education and Science,
  • The Department of Agriculture, Fisheries and Food,
  • An Foras Áiseanna Saothair (FAS) in respect of –
    • Non-craft training courses provided by, or approved of by An Foras Áiseanna Saothair,
    • Participation in Community Employment Schemes,
    • Participation in the Job Initiative programme,
  • Payments of a similar type made by any other state or territory.

“social welfare payments” means payments made under the Social Welfare Acts.

“year of assessment” means a year of assessment within the meaning of the Tax Acts

(2) Words and expressions used in this Part have the same meaning as in the Tax Acts, except where an other meaning is provided, or the context otherwise requires.

Relevant Date: Finance Act 2021