Accounting and tax
Corporate income tax considerations
- Corporate income tax in Ireland is applicable at two different rates i) 12.5% for general trading income, except for those business dealing in “excepted trade” such as petroleum activities and working minerals, and ii) 25% for non-trading income that include such income as rental revenue and investment income;
- The Value Added Tax (VAT) in Ireland is levied at the rate of 23% which is applied to the imports of goods from outside the EU, and to the supply of goods and services within Ireland;
- Ireland resident companies are liable to pay capital gains tax of 33%. Non-resident companies must pay capital gains tax upon disposal of certain assets in Ireland, such as land;
- Dividends paid to i) an Irish resident company are tax exempt ii) a nonresident company and both resident and nonresident individuals are subject to a 20% withholding tax;
- Other withholding taxes in Ireland include i) 20% on interest payments to a nonresident and ii) 20% on patent royalty payments;
- Employers are required to make social security contributions based on the pay and occupation of the employees, which can be up to 10.75% of the employee’s salary;
- Exporters from Ireland can take advantage of tax incentives. For example, exporters supplying more than 75% of their products to EU or non-EU countries may be eligible to buy goods and services at 0% VAT;
- Exemptions on paying capital gains tax may include: i) transfer of assets within a group and in merger/reconstruction situations and ii) the disposal of shares in a subsidiary of an Irish resident holding company, provided the subsidiary is resident in the EU or in a country with which Ireland has a double taxation agreement;
- Additionally, the subsidiary must hold a minimum 5% of the ordinary share capital, and a minimum of 5% of the economic rights in the subsidiary for a continuous period of at least 12 months within the previous 24 months.
Corporate income tax administration
- The Company Registration Office (CRO) of Ireland requires all Irish companies whether foreign or local to file an annual return within nine months following the end of the accounting period;
- In accordance with EU VAT Law, an Irish company is obliged to register for VAT if annual sales of goods exceed €75,000, or if sales of services exceed €37,500. Healy Consultants will be happy to assist you with Irish VAT registration for a onetime fee of €850;
- Audit exemptions are available for private limited companies, whether LTD or DAC, however the audit exemption may be denied if annual return is not filed in time;
- Companies that are independent and not part of a group (i.e. not a subsidiary or a holding company) are exempt from audit in Ireland if they are classified as a “small company”. These are similar to the audit exemption criteria in Singapore, qualifying if the company meets two or more of the following three criteria:
- Annual revenue of less than €8.8 million;
- Gross balance sheet assets of less than €4.4 million; and
- Fewer than 50 staff on average throughout the year.
- Companies that are part of a group also qualify for audit exemption as long as the group is defined as a “small group”. In order to meet this threshold, the total group revenue, gross assets and average employee count must conform to the same limits as for a “small company” (see above);
- Dormant companies are also exempt from the requirement to file audited financials in Ireland under the 2014 Companies Act.
- Business losses can be carried forward indefinitely against the trading profits of the same business;
- Ireland has signed double taxation treaties with 71 countries including Australia, China, Singapore, UK and the United States;
- In accordance with the 2015 Irish budget, all companies incorporated in Ireland will now be considered tax resident in the country. The changes in rules were prompted due to pressure from the US, European Union and OECD which wished to prevent foreign countries (especially US companies like Google, Apple and Facebook) incorporating Irish companies to defer taxes by using the Double Irish Arrangement;
- Healy Consultants’ Ireland tax planning services are tailored to meet the precise needs of international entrepreneurs. Unlike many corporate services providers, we take a global approach to our tax planning services, thinking ‘outside the box’ to provide a creative solution which fits your needs;
- It is important our Clients are aware of their personal and corporate tax obligations in their country of residence and domicile, and they will fulfil those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
Legal and compliance
- All companies looking to set up in Ireland require at least one director. At least one of the company’s directors must be a resident of the EEA. Alternatively, a €25,000 bond may be placed with the government to waive the EEA requirement. Most of our Clients request Healy Consultants to be the resident director at a fee of €4,325 per annum following Ireland business registration;
- Investing in Ireland by registering a business allows 100% foreign ownership;
- In order to be granted more foreign employment passes, the labor force has to contain at least 50% EEA nationals;
- Companies registered as LTD companies under the Companies Act 2014 do not need to hold an AGM;
- Healy Consultants will assist our Clients efficiently and effectively to complete this annual statutory obligation after Ireland business registration.
- The process of de-registering a company is dictated by the government. This process will take a minimum of 6 months. Healy Consultants fee to project manage company de-registration is US$1,450. During this 6 months period, it is mandatory to maintain a resident company secretary and a legal registered office.
Frequently asked questions
Will my Ireland company have to pay taxes on profits derived from outside Ireland?Yes, Ireland imposes corporate tax on worldwide profits.
When do I need to file my corporate tax returns in Ireland?A company is required to file for tax returns within nine months of the end of its accounting period.
What is the corporate tax rate in Ireland?The corporation tax rate in Ireland is 12.5%.
If I set up a company in Ireland, will it be seen as tax evasion?No, although corporate taxes are low in Ireland, it is completely legal. Big companies like Microsoft have set up their European headquarters in Ireland.
How can I find accountants for my Irish company?Healy Consultants can prepare financial reports, file annual returns and maintain accounting records for Ireland companies.
What are Ireland work permit visa requirements?You can find all relevant information regarding Irish employment permits on the website of the Department of Jobs, Enterprise and Innovation.