Corporation Tax (CT) payment and filing
Preliminary Corporation Tax (CT)
Large companies may pay their preliminary tax in two instalments. A large company is a company whose CT liability was above €200,000 in the previous accounting period. Where the previous period is less than 12 months, the tax due must be ‘annualised’. This is to determine if the company qualifies as a large company.
Notional allocation of preliminary tax payments is allowed between group members. The preliminary tax payments the group makes will be assessed to minimise the interest amount large companies have to pay. If a company chooses this option, it must first apply to Revenue’s Debt Management Task Force. The company must then pay 100% of the CT due by the return filing date.
A small company is a company whose CT liability is not above €200,000 in the previous accounting period. This is excluding surcharges and Section 239 income tax. Where the previous period is less than 12 months, the tax due must be 'annualised'. This is to determine if the company qualifies as a small company.
Small companies can base their preliminary tax for an accounting period on:
- 100% of their CT liability for the previous accounting period
- 90% of their CT liability for the current period (and there is provision for a top up payment to be made).
The amount of preliminary tax paid cannot be less than the lower of either of these.
If you chose the 100% rule and the previous period is less than 12 months, the CT liability must be ‘annualised’.
New or start-up companies
New or start-up companies do not have to pay preliminary tax for their first accounting period if they have CT that is less than €200,000. This is excluding surcharge but including Income Tax payable under Section 239 TCA 1997. Instead, they must pay their final CT charge for the first accounting period when submitting their CT return.
Next: When is preliminary Corporation Tax (CT) due?