Preliminary Tax is an estimate of your total tax bill for the year which you pay on the 31st of October every tax year. Its important to remember that preliminary tax also includes PRSI, Health Levy and Income Levy
The amount of Preliminary Tax paid for any year is not less than the lower of:
90% of the final liability for the current tax year
The final liability to tax for the immediately previous year (100% Rule) or
105% of the final liability for the pre-preceding year where the Collector- General is authorised to collect tax by direct debit.
Tax flow can be improved by choosing which preliminary tax to pay. For example if your sales have increased dramatically in the current tax year it is cashflow advantageous to pay 100% of the last years tax bill