Taxes in Ireland: A complete guide for residents, expats, and businesses

Ireland's taxes are progressive, rules-based, and collected in real time for employees or self-assessment for others. Whether you’re a resident earning locally, an expat balancing obligations in two countries, or a business considering Ireland’s corporate incentives, it’s important to understand how the tax system works.

This guide covers the essentials – from residency rules and income tax bands to USC, PRSI, VAT, and corporate tax – so you can stay compliant while making the most of available reliefs.

This article is brought to you by Taxes for Expats – a top-rated team helping Americans abroad meet US filing requirements. Are you a US expat in Ireland? Let us help you ensure you are compliant with your IRS obligations.

Irish taxation – essentials at a glance

Ireland’s tax system is rules-based and overseen by the Revenue Commissioners. Thanks to its progressive structure and digital filing, the system is considered straightforward and predictable for residents, expats, and businesses alike.

Below is a quick overview of how taxation in Ireland works:

Tax residence rules in Ireland – an in-depth explanation

Irish law decides your exposure using day-counts, ordinary residence, and domicile. The points below walk through the tests and the PPSN step so you can apply them to your situation.

1. 183-day and 280-day rules (day-count test): In the Republic of Ireland, you are tax resident if you spend 183+ days in the State in the year, or 280+ days across the current and preceding year with at least 30 days in each; if you are in Ireland 30 days or fewer in year two, you are treated as non-resident for that year. Your residence status determines which tax bracket and credits can apply to your income.

2. Ordinary residence compared to tax residence: You become ordinarily resident after three consecutive years of being resident, and you lose ordinary residence only after three consecutive non-resident years; this status can extend your charge to Irish tax on worldwide income (subject to defined exceptions).

3. Domicile status and its role for expats: Domicile reflects your long-term “permanent home” intention; it is distinct from residence. If you are resident but non-dom, foreign income and gains are generally taxed in Ireland only when remitted here (Irish-source income remains taxable regardless). A foreigner with non-Irish domicile may benefit from the remittance basis, subject to anti-avoidance rules.

4. Path to residency and obtaining a PPSN: Once you meet the day-count rules, register for a PPS Number to work, pay tax, or access services: apply online via MyWelfare with proof of identity, address, and your reason for needing a PPSN; applicants outside Ireland can also apply online or by post. If you lack a formal proof of address, the Department allows a householder-signed utility bill as evidence in some cases, and online identity verification uses MyGovID.

Taxable income in Ireland

Ireland taxes most forms of personal income under clear, source-based rules that depend on your residence status. In the Republic of Ireland, the list below highlights the receipts typically within scope and links back to how they’re charged.

• Employment pay and taxable benefits (including RSUs) are taxed through PAYE at the 20%/40% income tax rate, with USC and PRSI where due.

• Trade, profession, or vocation income from self-employment is taxable under Schedule D and reported via self-assessment.

• Rental income from Irish property (and foreign rentals for residents) is taxable and must be declared.

• Deposit interest is generally taxed via DIRT at 33% for Irish-resident individuals.

• Dividend income is added to your total income and charged to income tax, with USC and PRSI as applicable.

• Pensions and annuities are taxable under PAYE; State (DSP) pensions are liable to income tax but not USC or PRSI.

• Foreign income is taxable for residents; if resident but non-dom, foreign income is taxed only when remitted to Ireland.

  Pro tip

  Keep in mind that tax credits and reliefs – such as the personal credit, PAYE credit, or rent credit – can reduce the actual liability on many types of income, so your final bill in Ireland may be significantly lower than the headline tax rate on income suggests.

Income tax in Ireland – rates and bands

Ireland applies a standard tax rate on income of 20 percent on your first slice, then a higher income tax rate of 40 percent to income above your cutoff; the cutoff depends on your status and can be shared in limited cases. The table shows the 2025 bands for single people, married couples, and civil partners, followed by key credits and reliefs that reduce the final income tax you pay.

Now that we know what income is taxed, here’s how much tax you actually pay: The two-earner increase is capped at the lower of €35,000 or the lower earner’s income and cannot be transferred. Under PAYE, employers deduct tax from each payday in real time using your rate band and Tax Credit Certificate; if you share any part of the €35,000 increase, payroll applies it through each person’s certificate. This keeps deductions accurate during the tax year and sets you up for the credits below.

• Personal Tax Credit: €2,000.

• Employee (PAYE) Credit: €2,000.

• Earned Income Credit (self-employed): €2,000 maximum.

• Home Carer Credit: €1,950 (conditions apply).

• Single Person Child Carer Credit: €1,900; also carries a €4,000 additional standard-rate band.

Credits reduce the tax due, not your income; review them in myAccount to ensure the right amounts are used on payroll and at year-end.

High tax income rate in Ireland? See when FTC beats FEIE for Ireland-taxed earnings.

Read more

USC & PRSI – shaping your net salary now

On top of income tax, Ireland applies two compulsory levies that affect take-home pay: USC and PRSI. The Universal Social Charge is a levy on most income, applied at a progressive tax rate in 2025 of 0.5% to €12,012, 2% to €27,382, 3% to €70,044 and 8% above that, with 11% on non-PAYE income over €100,000, and no USC if total income is €13,000 or less.

Pay Related Social Insurance funds social benefits, and, in the 2025 tax year, Class A employee PRSI is 4.1% rising to 4.2% from 1 October 2025, with employees on €352 or less per week paying no PRSI. On your payslip, income tax (by tax bracket), USC, and PRSI are all deducted from gross pay, so crossing a band can trim your take-home more than expected.

In practice, budgeting for USC bands and the PRSI step-up from 1 October 2025 gives a clearer view of net salary across the year.

Other Irish taxes for expats – what you should know

These taxes sit alongside income tax and often determine your real cost of living or doing business. Ireland’s tax year runs from 1 January to 31 December, so align purchases, disposals, and filings accordingly.

Value added tax (VAT)

VAT is Ireland’s consumption tax and the largest source of indirect revenue. It applies whenever goods or services are sold, and the rate depends on the product or service. For expats starting a business, it is important to know that new VAT registration thresholds came into force in January 2025, which determine when you must register and charge VAT.

Consumers often notice VAT in day-to-day prices, while companies must track the correct rate and keep compliant invoicing.

NOTE! Farmers’ flat-rate compensation percentage is 5.1% in 2025; VAT-exempt sectors include finance, health, and education.

Capital Gains Tax

CGT is 33% on most chargeable gains; individuals get a €1,270 annual exemption. Pay by 15 December for disposals from 1 January–30 November and by 31 January for December disposals. Key reliefs include Entrepreneur Relief at 10% (lifetime cap €1m), the new Angel Investor Relief at 16%/18% available from 2024 (subject to conditions), Retirement Relief (updated limits from 1 January 2025), and PPR relief for your home.

Capital Acquisitions Tax (CAT)

Gifts and inheritances above the relevant group threshold are taxed at 33%. From 2 Oct 2024 (applicable for 2025), thresholds are Group A €400,000, Group B €40,000, Group C €20,000; aggregation applies across benefits since 5 Dec 1991. The €3,000 small-gift exemption remains separate from thresholds.

Local Property Tax (LPT)

The Local Property Tax is a recurring Irish tax on residential property, and it affects both residents and non-residents who own homes in Ireland. It is based on the market value of the property within set valuation bands. For 2022–2025, all homes are taxed on their 1 November 2021 valuation, but a new valuation date is set for 1 November 2025. LPT is often the first ongoing tax a foreigner encounters when buying a home in Ireland, and it can be higher in some council areas because local authorities may vary the basic rate.

• Vacant Homes Tax (VHT): An extra levy, set at seven times the base LPT, applies if a habitable property is occupied for fewer than 30 days in the chargeable period (Nov 1–Oct 31).

• Residential Zoned Land Tax (RZLT): This is a 3% annual charge (charge applies from 2025) on serviced land zoned for housing. It applies to sites identified on local authority maps and is self-assessed.

Stamp Duty

Stamp duty is a transaction tax that arises on certain transfers of property, shares, or leases. For homebuyers, it is an immediate cost on top of the purchase price and can be significant on higher-value properties. Budget 2025 introduced stepped residential rates, meaning buyers now face higher charges when crossing thresholds. Developers and investors face additional surcharges on bulk purchases, a policy aimed at easing supply pressures.

• Residential property: 1% on the first €1m, 2% on the portion from €1m–€1.5m, and 6% above €1.5m.

• Bulk purchases: 15% where 10 or more houses or duplexes are bought within 12 months (apartments excluded).

• Non-residential property: Flat 7.5%.

Both residents and non-residents pay the same rates – a foreigner buying a Dublin townhouse is taxed exactly like a local buyer.

Corporate Tax

Ireland’s corporate tax system is a central reason many multinationals base operations here. There is no tax bracket structure – the rate depends on income type. Trading income is taxed at 12.5%, while passive or non-trading income is taxed at 25%. From January 2025, a new participation exemption means certain qualifying foreign dividends can be received tax-free. At the same time, OECD Pillar Two rules ensure large multinationals face an effective 15% minimum tax through top-up mechanisms.

Ireland’s double tax treaties – an overview

Ireland has 70+ double tax treaties covering all major partners. It’s network of double taxation treaties allocates taxing rights between countries, caps withholding, and lets you credit foreign tax, so income isn’t hit twice. These agreements cover major partners such as the US, UK, Australia, and key EU economies, ensuring smoother treatment of taxes in Ireland when income crosses borders.

• United States – comprehensive treaty with reduced withholding and interest generally exempt at source when conditions are met.

• United Kingdom – long-standing DTT covering employment, pensions, business profits, and more.

• Australia – bilateral treaty in force covering common cross-border income categories.

• EU member states – treaties span the major economies (e.g., Germany, France, Spain, Italy), ensuring coherent treatment across the bloc.

How US expats can claim DTT relief in Ireland

For Americans in Ireland, the US–Ireland treaty is most relevant. Use this fast sequence to lock in the treaty tax rate and avoid double taxation.

Step 1: Prove residency – request IRS Form 6166 by filing Form 8802 and keep it valid for the income period.

Step 2: Apply relief at source where possible – give Irish payers the required Revenue declarations for interest/royalties (supported by Form 6166), or use the Dividend Withholding Tax exemption/refund process for shares.

Step 3: File your Irish return – claim the treaty article rate or a credit per Ireland’s DTT rules and keep all certificates on file.

Step 4: File your US return – claim foreign tax credits or a treaty position and attach Form 8833 when required.

Taking a US-Ireland treaty position? Know when Form 8833 is required

Learn more

Key tax credits and reliefs for Irish filers

For anyone navigating taxes in Ireland, tax credits and deductions are the quickest way to cut down liabilities. Expats can rely on the same standard credits as residents while also tapping into special reliefs designed for cross-border workers.

• Standard credits – Every resident gets access to the core set: a €2,000 personal credit, another €2,000 PAYE credit (or the Earned Income Credit for the self-employed), plus supports such as the Home Carer Credit (€1,950), the Single Person Child Carer Credit (€1,900), the Incapacitated Child Credit (€3,800) and the Dependent Relative Credit (€305). These credits directly reduce income tax owed.

• Expat-specific reliefs – International workers may also benefit from targeted deductions. The Foreign Earnings Deduction can shelter up to €35,000 of qualifying overseas pay, while the Seafarer’s Allowance (€6,350) applies to those with long stretches at sea. For residents employed abroad, Transborder Workers’ Relief can exclude qualifying foreign income, and inbound executives may use SARP to disregard 30% of income above €100,000. Finally, renters can claim the Rent Tax Credit of €1,000 (single) or €2,000 (joint), and those working from home may deduct 30% of utility and broadband costs through the Remote Working Relief.

Together, these measures mean expats can significantly soften the impact of income tax while meeting Ireland’s 2025 filing requirements.

Core tax forms for Ireland–based expats

Living in Ireland with US filing duties means navigating two systems with a short, predictable set of returns. File the right forms on time – they control how your tax rate, credits, and treaty relief are applied.

Ireland – the must-file forms

Most expats are either PAYE-only or self-assessed; which you are determines the return you file. Deadlines for 2024 returns are 31 Oct 2025 on paper and 19 Nov 2025 via ROS when you both pay and file; preliminary tax is generally 100% of last year’s or 90% of this year’s liability.

• Form 11 – Income Tax Return & Self-Assessment for chargeable persons (self-employed, or PAYE with significant non-PAYE income). File online via ROS.

• Form 12 – PAYE Income Tax Return for employees/pensioners to claim credits or report modest non-PAYE income; online in myAccount or by paper.

• Form 12S – simplified paper return for straightforward PAYE cases unable to use online services.

US – the core expat filings

US citizens and green-card holders must report worldwide income even while resident in Ireland. Many filers also have FBAR reporting when foreign accounts exceed $10,000 in aggregate.

• Form 1040 – Individual Income Tax Return, filed annually; expats generally receive an automatic 2-month filing extension.

• Form 2555 – Foreign Earned Income Exclusion to exclude up to $130,000 of earned income in 2025 (plus potential housing amounts).

• Form 1116 – Foreign Tax Credit to credit Irish taxes; file a separate Form 1116 for each income category

Your expat taxes made easier

Taxes in Ireland cover income tax, USC, and PRSI – and for Americans abroad, these tie directly into your US filing. Even simple earnings can affect both systems, making compliance complex. The good news is that with treaty relief, credits, and expert guidance, you can often eliminate double taxation and reduce your effective burden significantly.

At Taxes for Expats, we ensure you stay fully IRS compliant while living in Ireland, handling credits, exclusions, and treaty claims so nothing is missed.

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