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Here you can access relevant source documents which support the summaries of key tax developments in Ireland, the UK and internationally

Source documents include:

  • Chartered Accountants Ireland’s representations and submissions
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Revenue e-Brief No. 43/2006

Preliminary Corporation Tax

It has come to Revenue's attention that there may be some misunderstanding in relation to the continued application of a statement in Tax Briefing Issue 48, published in June 2002, in relation to preliminary tax payment arrangements for the first accounting period of a company whose corporation tax for that period was not going to exceed €50,000. In order to remove any doubt, this e-Brief is being issued to clarify that the approach set out in Tax Briefing 48 is not relevant in relation to the first accounting period of a company where that accounting period ends on or after 1 January 2006 and where, accordingly, preliminary tax is no longer payable in two instalments.

Tax Briefing 48 set out the revised arrangements for the payment of preliminary tax that were introduced, by Section 58 of Finance Act 2002, over a four-year ‘transition period’ during which preliminary tax was payable in two instalments. In the Tax Briefing 48 article, Revenue accepted that, as a matter of practice, where a company's corporation tax liability for its first accounting period was not going to exceed €50,000, then a first instalment payment of “NIL” would be accepted as meeting the company's preliminary tax obligations for the first instalment. The second instalment of preliminary tax then had to amount to 90% of the total liability for the accounting period.

For accounting periods ending on or after 1/1/2006 preliminary tax is payable in one instalment. With the move to payment of preliminary tax at one date rather than at two dates, the practice referred to above in relation to start-up companies, that was set out in Tax Briefing 48, is, of course, no longer possible.

If any company has not paid preliminary tax for an accounting period ending on or after 1/1/06 in the mistaken belief that the practice set out in the Tax Briefing article remained possible, it should arrange to pay the tax concerned without further delay. Companies who dealt with their preliminary tax obligations on the basis mentioned and who wish to request consideration of their position, in the context of an otherwise compliant tax payment record, are advised to write to Technical Services, Office of the Collector-General, Sarsfield House, Francis Street, Limerick, identifying the late payment concerned and briefly explaining how the delay arose by reference to the misunderstanding of the continued application of the practice concerned.