Recent Change in Tax Legislation

Due to a recent change and update in tax legislation, Management Consultants should no longer be affected by an additional surcharge on any undistributed income from their Limited companies.

Current tax rules provide for an additional charge of corporation tax (surcharge) on close companies which are service companies in respect of certain undistributed income. The rate of the surcharge is 15% on 50% of the company’s undistributed professional and service income.

A surcharge can also apply in respect of a service company’s undistributed investment and estate income. This can be at rate of 20%.

Revenue defines a service company as including close companies where the principal of the company’s income is derived from:

• Carrying on directly of a profession.
• The provision of professional services.
• Or a company which has or exercises office or employment.

Revenue do provide some specific guidance of what they consider a profession or the provision of professional services.

1. Accountant
2. Actor
3. Actuary
4. Archaeologist
5. Auctioneer
6. Barrister
7. Computer Programmer
8. Dentist
9. Doctor
10. Engineer
11. Journalist
12. Optician
13. Private School
14. Quantity Surveyor
15. Solicitor
16. Veterinary Surgeon

Professional services for which PSWT is operated include the following. For more information visit Revenue.ie.

Revenue state that the following are generally not considered to constitute the carrying on of a profession.

1. Advertising Agents
2. Auctioneers of Livestock
3. Insurance Brokers
4. Operation of a retail Pharmacy
5. Management Consultant (updated in June 2021)
6. PR Companies
7. Stockbrokers

Contact Gallagher Keane

Gallagher Keane offer a comprehensive range of tax services to corporate and private clients with a particular emphasis on helping them to structure their businesses and financial affairs tax efficiently. We provide tailored solutions to the individual needs of our clients.