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Income Levy and Preliminary Tax 2009

An extract from Revenue  guide for completing Preliminary tax …

Preliminary tax for the income tax year 2009 is due on the 31 October 2009. To avoid interest charges, the amount of preliminary tax payable is the lower of:

1. 90% of final liability for the current tax year – 2009 or
2. 100% of final liability to tax for the previous year – 2008 or
3. 105% of final liability for the pre-preceding year. – 2007 (This option is only available where preliminary tax is paid by direct debit. This rule does not apply where the tax payable for the pre-preceding year is NIL.)

The income levy due must be included in the preliminary tax payment where this payment is calculated on the basis of either [a] or [b] above.

Where [a] applies, the final liability for 2009 will include an amount for the income levy and the preliminary tax must be at least 90% of the overall liability.

Where [b] applies, in calculating the amount of preliminary tax, the liability for 2008 must be increased by an amount which is equal to the income levy that would have been payable if income levy had applied for 2008 at the same rates and bands as apply for 2009. (Section 531H(3) TCA 1997).

In calculating the amount of income levy due, credit for levy on relevant emoluments should be allowed in the following manner:

Income levy as calculated on 2008 aggregate income using composite rates
Less
Income Levy as calculated on 2008 relevant emoluments using composite rates

For the purposes of determining the amount of income levy to be paid with the preliminary tax payment the annual composite rates of levy for 2009 should be used i.e:

The first €75,036 @ 1.67%
The next €25,064 @ 3.00%
The next €74,880 @ 3.33%
The next €75,140 @ 4.67%
The remainder @ 5.00%

The above can be found on Revenue.ie website.