passports.io website
residencies.io website
Bank Accounts website
Flag Theory website

Ireland

Private company limited

Taxes

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
  • 94 Tax Treaties

Country details

Ireland
EUR
Dublin
Europe
e n - I E , g a - I E
4622917

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.

Tax treaties

Country Type Date Signed
Hong Kong, China DTC  2010-06-22
Pakistan DTC  1973-04-13
Cook Islands TIEA 2009-12-08
Finland DTC  1992-03-27
France DTC  1968-03-21
Egypt DTC  2012-04-09
Former Yugoslav Republic of Macedonia DTC  2008-04-14
Armenia DTC  2011-07-14
Bahrain DTC  2009-10-29
Russian Federation DTC  1994-04-29
Lithuania DTC  1997-11-18
Dominica TIEA 2013-07-08
New Zealand DTC  1986-09-19
Cyprus DTC  1968-09-24
Isle of Man TIEA 2008-04-24
Poland DTC  1995-11-13
Thailand DTC  2013-11-05
Norway DTC  2000-11-22
Chile DTC  2005-06-02
Viet nam DTC  2008-03-10
Cayman Islands TIEA 2009-06-23
Latvia DTC  1997-11-13
Liechtenstein TIEA 2009-10-13
Mexico DTC  1998-10-22
Slovenia DTC  2002-03-12
Albania DTC  2009-10-16
Ukraine DTC  2013-04-19
Morocco DTC  2010-06-22
Ethiopia DTC  2014-11-03
Montserrat TIEA 2012-12-14
Romania DTC  1999-10-21
Qatar DTC  2012-06-12
Austria DTC  1966-05-24
Netherlands DTC  1969-02-11
Spain DTC  1994-02-10
San Marino TIEA 2012-07-04
Turkey DTC  2008-10-24
Slovakia DTC  1999-06-08
Czech Republic DTC  1995-11-14
Uganda DTC  2013-04-19
India DTC  2000-11-06
Anguilla TIEA 2009-07-22
Panama DTC  2011-11-28
Vanuatu TIEA 2011-05-31
Saint Vincent and the Grenadines TIEA 2009-12-15
Jersey TIEA 2009-03-26
Kuwait DTC  2010-11-23
Zambia DTC  1971-03-29
Uzbekistan DTC  2012-07-11
Malaysia DTC  1998-11-28
Malta DTC  2008-11-14
Australia DTC  1983-05-31
Croatia DTC  2002-06-21
United States DTC  1997-07-28
Sweden DTC  1986-10-08
South Africa DTC  1997-10-07
Moldova, Republic of DTC  2009-05-28
Belgium DTC  1970-06-24
Kazakhstan DTC  1997-11-13
Guernsey TIEA 2009-03-26
Antigua and Barbuda TIEA 2009-12-15
Serbia DTC  2009-09-23
Samoa TIEA 2009-12-08
Singapore DTC  2010-10-28
Marshall Islands TIEA 2010-09-02
Bermuda TIEA 2009-07-28
Canada DTC  2003-10-08
Saudi Arabia DTC  2011-10-19
Belize TIEA 2010-11-18
Greece DTC  2003-11-24
United Kingdom DTC  1976-06-02
Korea, Republic of DTC  1990-07-18
Grenada TIEA 2011-05-31
Hungary DTC  1995-04-25
Saint Lucia TIEA 2009-12-22
Israel DTC  1995-11-20
Turks and Caicos Islands TIEA 2009-07-22
Japan DTC  1974-01-18
Italy DTC  1971-06-11
Portugal DTC  1993-06-01
China DTC  2000-04-19
Gibraltar TIEA 2009-06-24
Estonia DTC  1997-12-16
Belarus DTC  2009-11-03
Germany DTC  2011-05-30
Denmark DTC  1993-03-26
United Arab Emirates DTC  2010-07-01
Bosnia and Herzegovina DTC  2009-11-03
Switzerland DTC  1966-02-08
Georgia DTC  2008-11-20
Bulgaria DTC  2000-10-05
Montenegro DTC  2010-10-07
Luxembourg DTC  1972-01-14
Iceland DTC  2003-12-17

Procedures

We can help you incorporate a Company limited by shares in Ireland.
Please, contact us to request a free, no obligation consultation.

Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.