A. The tax laws provide for a surcharge on certain undistributed income of service companies i.e. profits left behind after you take your salary.
The surcharge will apply to one man band contractors trading through a limited company where the company generates income by providing professional services/carrying on a profession/holding an office or employment.
These tax rules do not directly define what a “profession” is but Revenue have said that they regard the following list of professions to fall within the scope of the surcharge:
- Auctioneer/Estate Agent
- Computer programmer
- Management Consultant
- Private School
- Quantity Surveyor
- Veterinary surgeon
An experienced accountant can guide you through these rules and clarify if these rules apply to you and, if so, ensure that the additional taxes are calculated correctly.
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