As a freelancer do I have to pay income tax if I have not yet started earning?

armabelle · 27-04-2016 08:42PM #1

Hi there

I am new in Ireland and freelance for a living. I set up with revenue about 1-2 months ago and since receiving my VAT certificate, I have not really gotten round to getting myself established as a freelancer here yet. I wanted to know if I would have to pay something to revenue regardless of the fact that I have not earned a cent in Ireland yet? Another question I have is do I still have to file tax returns even if I have not earned anything?

Allinall · 27-04-2016 08:45PM

armabelle wrote: »

Hi there

I am new in Ireland and freelance for a living. I set up with revenue about 1-2 months ago and since receiving my VAT certificate, I have not really gotten round to getting myself established as a freelancer here yet. I wanted to know if I would have to pay something to revenue regardless of the fact that I have not earned a cent in Ireland yet? Another question I have is do I still have to file tax returns even if I have not earned anything?

If you've registered as self-employed, you will have to file a tax return.

However, you only pay tax on profits from your activity or trade, so if you haven't made any money, then no tax liability will arise.

Irish_Elect_Eng · 27-04-2016 09:03PM

armabelle wrote: »

Hi there

I am new in Ireland and freelance for a living. I set up with revenue about 1-2 months ago and since receiving my VAT certificate, I have not really gotten round to getting myself established as a freelancer here yet. I wanted to know if I would have to pay something to revenue regardless of the fact that I have not earned a cent in Ireland yet? Another question I have is do I still have to file tax returns even if I have not earned anything?

Have you earned money in another country?

armabelle · 27-04-2016 09:06PM

Allinall wrote: »

If you've registered as self-employed, you will have to file a tax return.

However, you only pay tax on profits from your activity or trade, so if you haven't made any money, then no tax liability will arise.

ok then

In Spain where I was living before it does not work that way... you have to pay regardless of activity and then you also pay for activity. There is like a flat fee for being self-employed there which goes to social security etc

Stheno · 27-04-2016 09:06PM

we don't have that flat fee.

armabelle · 27-04-2016 09:07PM

Irish_Elect_Eng wrote: »

Have you earned money in another country?

no, I have not begun working. I am just getting going this month as I was working on my website etc

armabelle · 27-04-2016 09:08PM

Stheno wrote: »

we don't have that flat fee.

Great as I don't want to feel pressured into starting up for any reason

Mrs OBumble · 27-04-2016 10:06PM

Stheno wrote: »

we don't have that flat fee.

Yes, we do

But it's optional if your income is less than a certain amount. I think it's 5K.

But if you don't pay, you don't get a pension credit for the year.

Stheno · 27-04-2016 10:09PM

Mrs OBumble wrote: »

Yes, we do

But it's optional if your income is less than a certain amount. I think it's 5K.

But if you don't pay, you don't get a pension credit for the year.

You mean PRSI?

27-04-2016 10:26PM

You must file a tax return at the end of the tax year even if you earn nothing.

You must file vat returns even if you earn nothing. You just file nil

armabelle · 28-04-2016 01:47PM

Sleeper12 wrote: »

You must file a tax return at the end of the tax year even if you earn nothing.

You must file vat returns even if you earn nothing. You just file nil

Ok so if I got my tax certificate and VAT number two months ago I would fill the returns in 1 year after receiving them? So if it was in march that I got them, I would fill out my tax returns march 2017?

Is this an easy thing to do?

Mrs OBumble · 28-04-2016 02:36PM

Stheno wrote: »

You mean PRSI?

Yes, like the OP said, "... a flat fee for being self-employed there which goes to social security etc"

Was increased from approx E253 to E500 a few years ago. This jump was a big issue for some with low earnings, and is causing to not even try to pay it despite the consequences.

armabelle · 28-04-2016 06:32PM

Mrs OBumble wrote: »

Yes, like the OP said, "... a flat fee for being self-employed there which goes to social security etc"

Was increased from approx E253 to E500 a few years ago. This jump was a big issue for some with low earnings, and is causing to not even try to pay it despite the consequences.

Sorry but a bit confused. So I have to pay 253 euros even if I don't work?

armabelle · 28-04-2016 06:36PM

Mrs OBumble wrote: »

Yes, like the OP said, "... a flat fee for being self-employed there which goes to social security etc"

Was increased from approx E253 to E500 a few years ago. This jump was a big issue for some with low earnings, and is causing to not even try to pay it despite the consequences.

Is this what you mean? I got this paragraph from Citizens Info that states:

If you are aged between 16 and 66 you pay Class S PRSI of 4% on all your income for tax purposes, that is, gross income less allowable expenses. You must pay 4% of all your income or €500, whichever is greater.
If you earn less than €5,000 from self-employment in a year you are exempt from PRSI, but you may pay €500 as a voluntary contributor (if you meet the other conditions).
You can read about employing family members in our document on social insurance.

Mrs OBumble · 28-04-2016 06:46PM

Yes, that is exactly what I mean.

I recommend paying the voluntary contribution if possible: if you don't get pension credits in a year, then there's no way of getting them back later. You won't appreciate them so much now, but will if you're old and looking for a state-pension.

armabelle · 28-04-2016 06:54PM

Mrs OBumble wrote: »

Yes, that is exactly what I mean.

I recommend paying the voluntary contribution if possible: if you don't get pension credits in a year, then there's no way of getting them back later. You won't appreciate them so much now, but will if you're old and looking for a state-pension.

Not going to be here for more than 2 years

Konata · 28-04-2016 08:02PM

Gonna hijack this thread with a related question (apologies!) - I registered as self-employed in June 2015, am currently in the process of un-registering. Presuming I will have to file a tax return before 31 Oct (2016) for 2015 and also one next year for 2016? I won't owe any tax (well under the 5000 for 2015, haven't done any self-employed work in 2016) but want to make sure I do the tax returns right!

Mrs OBumble · 28-04-2016 08:44PM

armabelle wrote: »

Not going to be here for more than 2 years

Are you likely to retire in a place in the EU, or which has a bilateral agreement for pensions with Ireland? If so, contributions made here count.

armabelle · 28-04-2016 09:17PM

Mrs OBumble wrote: »

Are you likely to retire in a place in the EU, or which has a bilateral agreement for pensions with Ireland? If so, contributions made here count.

I don't know... nothing is likely when it is so far away. I am very unpredictable

armabelle · 06-05-2016 09:00AM

Sleeper12 wrote: »

You must file a tax return at the end of the tax year even if you earn nothing.

You must file vat returns even if you earn nothing. You just file nil

If I file a tax return at year end, then why did I recieve this only after 2 months:

ROS reminder to file.

It is now time to file your latest VAT3 return. This return and payment must be filed on or before 19/05/2016.

If you both pay and file your return using ROS services the due date for your payment and return will be extended to 23/05/2016.

06-05-2016 09:32AM

armabelle wrote: »

If I file a tax return at year end, then why did I recieve this only after 2 months:

ROS reminder to file.

It is now time to file your latest VAT3 return. This return and payment must be filed on or before 19/05/2016.

If you both pay and file your return using ROS services the due date for your payment and return will be extended to 23/05/2016.

I file VAT returns twice a year. Some have to do it monthly or by monthly. It looks like you have to file by monthly. If you didn't earn anything & have no expenses you just need to put NIL.

Its only your tax return that is once a year.

As a freelancer do I have to pay income tax if I have not yet started earning?

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