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treatment of PHI as employer

  • 17-08-2010 02:32PM
    #1
    viztopia
    Closed Accounts Posts: 770 ✭✭✭


    I am looking to see how i should treat payments for Permanent Health Insurance on behlaf of staff in my company for tax purposes. I am looking on the Revenue website and there is not much on it. Is it subject to BIK?


Comments

  • #2
    dbran
    Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    Hmmmm....Tricky one..

    Well from the company side of things;

    1) The company is not entitled to the 20% which is deducted at source (only individuals are) so that 20% is owed back to the revenue and is paid in the form of additional corporation tax/income tax on the CT1.

    2) However they are entitled to an increased deduction of the 20% amount paid to PHI as an expense against profits. This is an adjustment against taxable profit in the tax computation.

    From the employees side....

    1) They will have a BIK for the gross amount plus tax credit paid over to PHI on their behalf.
    2) They are also entitled to the 20% tax credit on the PHI that they did not get.

    Hope this makes sense.


    Kind Regards

    Dbran


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