The Knowledge Box Regime The Finance Act 2015 introduced a knowledge development box regime. A 6.25% tax rate applies to profits from qualifying assets earned by an Irish company carrying on a specified trade. The profits available are the proportion of the profits of the specified trade that the expenditure on qualifying assets bears to total costs incurred to develop the qualifying assets. It is […]
Industrial Buildings Capital allowances are available in relation to the construction of an industrial building. An industrial building is a factory mill or similar premises. Parts of the building not so used are excluded including for example, offices showrooms and retail premises within an industrial building (if they exceed 10% of total cost). In the case of refurbishment, the allowance is limited to the capital […]
Overview Capital allowances are available for companies in much the same way as for individuals. As with individuals, depreciation is not directly allowed as a deduction. Depreciation is added back in calculating trading profits. Capital allowances are allowed over specified periods in respect of certain types of assets. They are not available in respect of all assets including most notably premises other than industrial buildings. […]
Basic Principles Accounts are almost always made up on a accruals basis. This is usually required by accounting standards. Income is calculated on the basis of income earned and expenses, incurred notwithstanding that the timing of the cash receipt and payment may differ. Expenditure must be referable to the accounting period concerned. Expenditure may be deducted if it is income in nature and it is […]
Transfer of Losses Although each company in a group is a separate entity, tax law allows them to be treated as a unit for some taxation purposes. Losses and assets may be passed between group members on a tax neutral basis, subject to compliance with conditions. There are provisions which undo the benefit of exempt tax transfers, when a company which has obtained benefit, leaves […]
General The rules for companies’ losses are broadly similar to those in respect of sole trader/partnerships. Losses may be set against total profits of the period or may be carried forward against profits of the same trade. They may be carried back against the profits of a preceding accounting period of the same length .. If there are still surplus losses, they may be carried […]
Nature of Charges Charges are categories of expenditure that are treated differently (and often more favourably) than other expenditures that qualify for allowances and deductions in the computation of tax liability. They are treated in the nature of the first call and are taken off the top of income. Charges relate principally to interest on certain types of bank loans. From a computational perspective, charges […]
Types of Loss There are two distinct rates of company taxation on income, namely 12.5% for almost all trading activity and 25% in relation to certain excepted trades and non-trading / passive income, such as rental and dividend income. Unsurprisingly, the rules in relation to losses require that losses incurred in “12.5%” tax rate trades(all trades except land and investment type trades) are allowed against […]