Private company limited
Country code – IE
Legal Basis – Common Law
Legal framework – Companies Act 2014
Company form – Private limited company (Ltd)
Liability - The liability of the shareholders is limited to the amount of their shares.
Share capital –Company equity is divided into shares of a fixed amount. There is no minimum capital requirements but it must issue at least one share upon incorporation. This share can have a nominal amount as low as €0.01.
Shareholders – An Irish company may be incorporated by one or more natural persons or legal entities, residents or non-residents. Details of the shareholders are disclosed publicly.
Directors – A company must have at least one director, who must be an individual. At least one of the directors must be Resident within the European Economic Area (EEA) If a company has no EEA-resident director, a EUR 25,000 Bond must be placed with the Company Bureau. Details of the directors are disclosed publicly.
Secretary – Irish companies must appoint a secretary, who can be one of the director. If the company has only one director, it shall appoint a separate individual as secretary.
Registered Address – A company must have a registered office in Ireland.
General Meeting – In each year, every company shall hold a general meeting as its annual general meeting, or pass a written shareholder resolution in lieu.
Electronic Signature – Permitted.
Re-domiciliation – Inward/outward re-domiciliation is generally allowed.
Compliance – Every company is required at least once in every calendar year to submit an annual return with audited financial statements.
Companies must also submit a tax return due to the 21st day of the 9th month following the end of the accounting period and are also obliged to pay preliminary tax in either one or two instalments.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- EUR 0.01 Minimum issued capital
- - Minimum paid up capital
- EUR Capital currency
- Anywhere Location of annual general meeting
- 2017 AEOI
Tax residency – A Private limited company is tax resident in Ireland if it is managed and controlled in Ireland or if it is incorporated in Ireland. However, companies incorporated in Ireland which are tax residents in a treaty country by virtue of management and control, may be deemed Irish non-residents for tax purposes.
Basis – Corporate income tax is levied on worldwide income.
Tax rate – The corporate tax rate is 12.5% for trading income and 25% for non-trading income.
Capital gains – Capital gains are usually taxed at 33%. However, gains obtained from the disposals of interest in offshore funds and foreign life assurance policies which are not located in the EEA or treaty countries, may be taxed at a 40% rate.
There is a participation exemption from capital gains obtained by Irish companies if a minimum of 5% of the shares is held for 12 months, the company whose shares are sold is resident in the EU or in a treaty country, among other conditions.
There is also a capital gains tax entrepreneur relief which consists of a reduction in the tax rate to 10% on the disposal of chargeable business assets.
Dividends – Dividends from resident entities are exempt from corporate tax.
Dividends received from a EU or a treaty country may be taxed at a 12.5% rate. If the company holds 5% or less of the share capital and voting rights, dividends may be exempt from taxation.
Dividends received from a listed company or a company that is part of a 75% listed group the principal class of the shares of which are regularly traded on the Irish Stock Exchange, or any other EU or treaty country Stock exchange, may be taxed at a 12.5%. If the company holds 5% or less of the share capital and voting rights, dividends may be exempt from taxation.
Dividends received from entities incorporated in a country other than a treaty country or a EU member state are subject to the 25% tax applied to non-trading income.
Interests – Interests are usually taxed at a 25% tax rate.
Royalties – Royalties are generally subject to a 25% tax rate. However, if it is considered that the Irish company is carrying on an IP trade, royalties and other similar income may be subject to a 12.5% tax rate.
Withholding Taxes – Dividends paid to resident entities are not subject to withholding tax. Dividends paid to resident or non-resident individuals are subject to a 20% withholding tax.
Dividends, interests and patent royalties paid abroad are subject to a 20% withholding tax, unless a tax treaty or the EU parent subsidiary applies.
Royalties which are not derived from patents are exempted from withholding tax.
Foreign-source income – Foreign-source income, including foreign branch income, and capital gains are usually subject to corporate tax. However, income retained in subsidiaries is usually not taxed until remitted to Ireland. A foreign tax credit may be available.
Losses – Losses arising from taxable income may be carried forward indefinitely and be carried back to the immediately preceding period of equal length.
Inventory - Inventory may be valued at the lower of acquisition/production costs or market value, whichever is lower. First in first out (FIFO) is accepted. Last in first out (LIFO) and base-stock methods are usually not accepted.
Anti-avoidance rules – Transfer pricing rules apply to certain transactions, which usually must be carried out in accordance with the arm’s length principle.
There is no thin capitalization legislation, but interest paid by a non-trading company to a non-resident parent company which owns 75% of the company and is located in a jurisdiction other than a treaty country, is usually reclassified as a dividend.
Currently, there are not CFC rules, although Ireland will be required to introduce them as part of the EU anti-tax avoidance directive.
Labor taxes – Employer contributions to the Pay-related Social Insurance are up to 10.75% of an employee’s gross earnings. The contribution rate for employees is 4%.
Tax credits and incentives – There is a 25% tax credit on qualifying R&D expenses, being a total effective tax deduction of 37.5%. In addition, under the Knowledge Development Box, a reduced corporate tax rate of 6.27% applies to certain profits arising from assets derived from R&D initiatives.
Certain start-ups may benefit from a tax relief for three years if the total amount of corporate tax payable does not exceed EUR 40,000 in each year.
The Intellectual property regime provides a tax deduction for capital expenditure incurred by a company on the acquisition of qualifying IP assets such as patents and registered designs, trademarks, know-how, domain names, copyrights, service marks, among many others. Capital allowances incurred on qualifying IP assets are available for offset against income generated from qualifying IP assets, up to a maximum deduction of 80% of the IP derived profits. The remaining 20% is taxable at the 12.5% corporation tax on the basis that the company is carrying on a trade.
Personal income tax – An individual is deemed to be tax resident in Ireland if he or she is present in Ireland for 183 days in a calendar year or 280 days in any two consecutive years.
After an individual has been tax resident for three consecutive years, he or she becomes an ordinary resident. Ordinary residence ceases once the individual has been a non-tax resident for three consecutive years.
Tax residents are subject to tax on their worldwide income, while non-residents are taxed on their profits arising in Ireland.
Personal income is taxed at progressive tax rates up to 40% on annual income exceeding €33,800. Individuals are also subject to the Universal Social Charge at progressive rates up to 11%.
Dividends are taxed at standard rates, although individuals who are resident but not domiciled in Ireland are not subject to tax on their foreign investment income, provided that it is not remitted to the country.
Interest income is usually taxed at 39%, although certain exemptions may apply.
Capital gains are taxed separately at a flat tax rate of 33%. A rate of 40% applies in the case of certain interests in funds and life assurance policies.
Rental income is considered ordinary income and therefore taxed at the applicative tax rate.
Other taxes – Property tax is levied by municipalities at a 0.18% rate for properties with a market value up to €1m and 0.25% on properties over €1m. Transfer of properties are subject to a stamp duty between 1% and 2%.
Assets passing on death and on lifetime gifts are subject to a capital acquisition tax at a 33% rate.
There are no taxes on net wealth in Ireland.
V.A.T. standard rate is 23%. Reduced rates of 13.5%, 9% and 4.5% may apply for certain goods and services.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 12.5% Offshore Income Tax Rate
- 12.5% Corporate Tax Rate
- 25% Capital Gains Tax Rate
- 25% Dividends Received
- 20% Dividends Withholding Tax Rate
- 20% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- FIFO Inventory methods permitted
- 82 Tax time (hours)
- 9 Tax payments per year
- 4% Social Security Employee
- 10.75% Social Security Employer
- 51% Personal Income Tax Rate
- 23% VAT Rate
- 0 Tax Treaties
Ireland (Eire in Irish) is a country member of the European Union, located in the homonymous island. It has a unique land border, with Northern Ireland, one of the constituent nations of the United Kingdom. The island is surrounded by the Atlantic Ocean and has the Celtic Sea to the south, the St. George Channel to the southeast and the Irish Sea to the east.
The modern Irish state gained its effective independence from the United Kingdom in 1922, following a war of independence that ended with the signing of the Anglo-Irish Treaty, while Northern Ireland chose to remain in the United Kingdom.
It has about 4 and a half million inhabitants. Its official languages are Irish and English. Its capital and most populated city is Dublin, located to the east of the island. Its official currency is the Euro (EUR).
Ireland has one of the highest per capita incomes worldwide and seventh in the European Union, behind Luxembourg, Sweden, Denmark, Austria, Netherlands and Finland. Ireland’s economy is small and modern, depending on high technology industries and focused on international trade.
Ireland is one of the largest exporters of goods and services related to software worldwide. In fact, a lot of foreign software is filtered through the country to take advantage of an advantageous tax regime on intellectual property royalties.
International companies with their European headquarters in England are Google, Facebook, Twitter, LinkedIn, Amazon, eBay, PayPal and Microsoft. Other important industries include the alcohol beverage, financial services, engineering, medical technologies and pharmaceuticals.
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