Overview Internationally, countries either charge tax on the worldwide profits of resident companies or on domestic income but not foreign income. Many countries have moved towards charging tax only on domestic income. The United Kingdom exempts from corporation foreign dividends and foreign branch profits. The USA taxes worldwide profits with certain exemptions. Ireland taxes worldwide profits of an Irish resident company but gives credit for […]
Double Tax Agreements The model DTA agreement by OECD was updated in 2017 at the same time as the Multilateral Instrument. OECD publishes detailed commentary on its meaning and interpretation. This is recognised as an aid to interpretation. States may enter Double Taxation Agreements. They may file reservations and observations. They may limit the effect and application of the Double Taxation Agreement. Double Taxation Agreements […]
Minimum Tax Rate Finance Act 2023 implement the Pillar Two minimum effective tax rate for large groups and companies by transposing the EU Minimum Tax Directive (Council Directive (EU) 2022/2523 of 15 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union) into Irish law. Pillar Two is one element of an October 2021 […]
Updated Provisions Finance Act 2019 substitutes a new Part 35A of the Taxes Consolidation Act 1997 for the existing Part 35A (Transfer Pricing). The existing Part 35A sets out transfer pricing rules that apply the arm’s length principle to trading transactions between associated persons. The new Part 35A updates existing transfer pricing rules and extends their scope and application. The new Part 35A makes the […]
Exchange of Information The Finance Act 2014 provides enabling legislation in respect of the common reporting standard as evolved by OECD and G20 for automatic exchange of financial information by financial institutions. Regulations may, in addition to providing for making returns of information in relation to reportable accounts, may outline the manner in which the returns are to be made, specify detailed information to be […]
Entities Covered Corporation tax applies to companies and most other legal bodies, whether formed in Ireland or abroad. A foreign incorporated company may be subject to Irish Corporation Tax, if it is resident in Ireland. Formerly, a company incorporated in Ireland, could be outside of the scope of Irish corporation tax if it was managed and controlled from outside Ireland and satisfied certain other conditions. […]
Dividend withholding tax Where an Irish resident company makes a distribution to certain persons including in particular Irish resident individuals the company is obliged to withhold 25% tax and pay it to the Revenue Commissioners. It applies where the recipient would be subject to Irish income tax on dividend income. It applies to any distribution. This may include the distribution or transfer of assets. Accordingly […]
Original Charge There has been a CGT charge when a company goes non-resident in relation to assets which are thereby outside the scope of Irish CGT for many years. There have been important exceptions. Cessation of residence in the State will take place when it becomes resident in another country rather than ceases to exist. Where a company ceases to be resident in the State, […]