Assets are resources controlled by a company that provide or are expected to provide economic benefits in the future. In accounting, assets are divided into current (short-term) and non-current (long-term) based on their nature and useful life. Below, we explore their classification, write-off rules, depreciation methods, and tax benefits available in Ireland.

1. Asset Classification

In Ireland, tax obligations apply to various categories, including self-employed individuals, owners of significant company shareholdings, and landlords. It is important to understand all nuances that can affect tax liability, reporting requirements, and potential tax reliefs.

Self-Employed Individuals:

Under Irish VAT legislation, the “Margin Scheme” aims to simplify and reduce the administrative burden and potential double taxation for dealers in second-hand goods, works of art, antiques, and collectibles. Instead of accounting for VAT on the full sales price of goods, the scheme allows VAT to be paid only on the difference (or margin) between the sales and purchase prices. This approach prevents dealers from facing VAT charges on the full value of items they resell, especially when VAT may have already been paid by a previous owner or in a prior transaction.

Categories Covered by the Margin Scheme:

Introduction

The Companies Act 2014 introduced a formal procedure for the voluntary strike-off of companies and clarified the steps for their restoration. There is now a simplified process for restoring companies regardless of the strike-off method.

The Value-Added Tax (VAT) invoice must show:

• the date of issue
• a unique sequential number
• the supplier’s full name, address and registration number
• the customer's full name and address

Key Characteristics:

1. Unlimited Liability of Shareholders: In Unlimited Companies (UC), shareholders have unlimited liability for the company’s debts. This means that if the company faces financial difficulties or is liquidated, shareholders are obligated to cover all debts and liabilities, even using their personal assets. This is in contrast to limited liability structures (such as LTD or PLC), where shareholder risk is limited to the amount they have invested in shares.

Key Characteristics:

1. Shares Traded on the Stock Market: Public Limited Companies (PLCs) are companies whose shares can be freely bought and sold on stock markets. This allows the company to raise capital through public share offerings (IPOs) and attract both large and small investors. The company’s shares become available to the general public, and any investor can become a shareholder.