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. […]
12.5% Rate Corporation tax represents a key element of Irish industrial policy. When Ireland joined the European Union it was allowed under transitional arrangements to retain export sales relief until 1980. Thereafter, under state aid rules, it was permitted to apply a 10% corporation tax rate to manufacturing. This was later extended to the IT and financial services sector. In 1998 it was agreed with […]
Interest In order for interest on a loan to qualify for relief, it must be used wholly and exclusively for the purpose of the trade or the purpose of property rental or acquiring trading or property rentals assets. A company qualifying for interest deduction must have a material interest in the company that uses the borrowed money and the companies must have a common director. […]
Basis of Charge As with income tax, corporation tax, taxes, profits and earnings in accordance with rules which apply to each of a number of types of income. Corporation tax is charged on total income and capital gains. Broadly speaking, the rules applicable to trading income, professional services income, investment income, rental income and capital gains are identical to those applying to income tax and capital […]
Foreign income As is the case with income tax, corporate income from sources outside Ireland is taxed under a separate category to the various categories of domestic Irish income (trading, rental, investment, distributions; Schedule D Case III. Foreign source income may arise from a foreign trade or from foreign rental or investment income. Income and profits from foreign sources are calculated in accordance with Irish […]
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 […]
Company Income As with income tax, corporation tax, taxes, profits and earnings in accordance with rules which apply to each of a number of types of income. Broadly speaking, the rules applicable to trading income, professional services income, investment income, rental income and capital gains are identical to those applying to income tax and capital gains tax respectively for individuals but with modifications. Corporation tax is […]
Smaller Companies Preliminary Tax Start up companies enjoy certain benefits and concessions. If a company does not expect tax liability to exceed €200,000 in year one, it will have no preliminary tax obligation. The tax liability will be due with the corporation tax return, eight months and 21 days after the end of the accounting period. Small companies, are those whose tax liability in the […]
Tax Returns The system of preliminary tax, tax returns and assessments for companies is broadly similar to that for individuals. An initial return is also required upon commencement to trade. Companies must self assess their tax liabilities. If they have any income profit or gains potentially within the scope of tax in that period, they must make a return. Companies must pay preliminary tax and […]
S. 110 Companies Section 110 companies were orginally used by financial institutions for the purpose of securitisation. See the separate sections on securitisation. The company must have at least €10M qualifying assets. It must be Irish resident and carry out no other activities, than holding and managing these assets. It must notify Revenue and furnish certain details of its group and connected parties. It must […]
Groups 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 the group, […]