Preliminary Corporation Tax for New Companies in Ireland

What preliminary Corporation Tax does

Preliminary tax brings part of the company's expected Corporation Tax into the payment system before the final return is filed. The calculation and due date depend on whether the company is new, small or large and on the accounting-period end.

It is separate from VAT, payroll taxes and the CRO annual return. A company can therefore be fully up to date with CRO filings and still have an unpaid Revenue obligation. Build one compliance calendar that shows each authority and tax separately.

The first accounting-period rule

Revenue's current guidance provides that new or start-up companies do not have to pay preliminary tax for the first accounting period if the CT liability is less than €200,000 under the stated calculation. The final charge is paid when the CT return for that period is submitted.

Do not read this as permission to spend the tax reserve. Estimate the liability as trading develops and transfer cash into a separate reserve. A profitable company can face its first CT payment at the same time as other growth costs and the next period's preliminary-tax cycle.

• Confirm when the company first came within the charge to Corporation Tax.
• Identify every tax accounting period covered by the accounts.
• Estimate trading, non-trading and chargeable-gain liabilities.
• Include relevant surcharges and Section 239 amounts in the review.
• Schedule the CT1, balance payment and next preliminary-tax date.

Small-company calculation after the first period

Revenue describes a small company as one whose CT liability for the previous accounting period does not exceed €200,000, subject to the guidance and annualisation rule. A small company can generally base preliminary tax on 100% of the previous period's liability or 90% of the current period's liability, with the statutory conditions and top-up rules applied.

The previous-period method may be easier to calculate but can mislead where the earlier period was short. The current-period method needs a dependable forecast. Ask the accountant which basis is available and retain the workings supporting the payment.

Return and balance payment timing

Corporation Tax returns and balance payments follow the accounting-period end. Revenue's electronic filing calendar generally works within the ninth month, with the exact date depending on the period end and ROS rules. Confirm the live deadline rather than relying on a generic annual reminder.

Long first statutory accounts can contain more than one Corporation Tax accounting period because one CT1 cannot exceed 12 months. Each return and payment must be mapped correctly even if the financial statements are prepared as one longer document.

A practical cash-flow routine

Update the tax estimate monthly or quarterly from reconciled bookkeeping. Separate VAT collected from revenue, record payroll correctly, preserve expense evidence and flag unusual income or transactions to the accountant before the year closes.

Start-up Corporation Tax relief, losses or credits may reduce the final amount only where the conditions are satisfied and the claim is made correctly. Do not reduce the reserve on the strength of a headline until eligibility has been reviewed.