What is Preliminary Tax?
Preliminary Tax is your estimate of your Income Tax payable for the year and must be paid by 31 October of the previous year. In calculating your Preliminary Tax you should remember that it includes PRSI and USC as well as Income Tax.
The amount of Preliminary Tax you must pay to avoid interest charges is the lower of: 90% of your final liability for the current tax year or 100% of your final liability to tax for the immediately previous year or 105% of your final liability for the year preceding the immediately previous year.
This option is only available where you authorise the Collector-General to collect tax by direct debit. The 105% rule does not apply where the tax payable for the pre-preceding year is NIL.
Your accountant or Tax advisor is the best person to advise on your preliminary tax liability