There are various methods to pay your income tax, which will be detailed on your income tax notice - on-line, by direct debit, or by cheque.
You can either pay in one lump sum, by monthly direct debit, or in three instalments.
Those whose tax bill is no higher than a few hundred euros are required to make one single payment by the due date.
In other cases, each year you will be sent two provisional payment notices, prior to your tax liability for the year being determined.
These provisional payments need to be made by 15 February and 15 May each year. The amount on the notices is based on your tax liability for the previous year.
The final balancing payment will be due, after your tax liability has been determined, either in September or November.
Accordingly, if the previous year you paid €1500 in income tax, the following year you will receive two provisional payment notices of €500.
In the event that your tax liability turns out to be lower than the sum you have already paid, you will be given a refund of any over-payment.
If you consider that, due to a reduction in your income, your tax bill in the following year will be no greater than €345 you can opt not to make the provisional payments on account. Thus, if in 2016, you estimate that your income tax bill would be no greater than €345 then you need make no provisional payment. No action is required on your part.
However, if your eventual tax bill in the year is greater by 10% of the above figure then your tax bill will be increased by 10%, so some caution is needed. Alternatively, you can pay a lower amount than that which has been demanded in the provision payment notice.
You will also be exempt from provisional payments if you pay on a monthly basis by direct debit. The direct debit is paid over 10 months of the year from January to October, on the 15th of each month. Any shortfall is paid during November and December, after your tax notice has been received. If you have overpaid, then you will receive a tax refund during November or December.
You can elect to pay by direct debit at any point during the year, but the start date from which payments by direct debit will be accepted will depend on when you made your application. For applications made after 1st July, the direct debit will not commence until January the following year.
If you do not pay your tax bill by the due dates then your liability is increased by 10%, as well as an interest charge of 0.40% per month (4.80% per year) on the outstanding sum.
If you find yourself in financial difficulty in paying your tax bill it is possible to negotiate a delay in payment with the tax office.
Likewise, if you have incurred a penalty charge due to non-payment you can also seek relief from the penalty.
You will need to make application to the local tax office with proof of your current circumstances.
If your current income has declined by at least 30% over the proceeding three months you are entitled, as of right, to more time to make the payment. You can use a standard form for this purpose or visit your local tax office.
Less than 30% then the decision is discretionary, and application needs to be made to the local tax office.
Where your circumstances have changed dramatically for the worse since the previous year, then you can also ask for an exoneration from the payment of provisional sums.
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