Corporate Tax in Ireland
Corporate Tax in IrelandUpdated on Monday 05th December 2022
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The corporate tax in Ireland applies to the profit made by a legal entity throughout a financial year. Financial analysts consider that Ireland’s corporate tax, of 12.5%, is one of the most efficient in Europe. Also, at an European level, Ireland has the second smallest corporate tax, after Bulgaria.
However, a client should know that this type of tax applies only to the trading income – revenue realized from commercial activities with goods and services. Non-trading income (investment income, net profits of foreign companies, rental income) is taxed at the rate of 25%. When opening a business in Ireland, an investor should take into consideration Ireland applies a tax of 33% to the capital gains. Our Irish law firm will offer you specialized consultancy in respect to the types of companies available in Ireland and to the taxation system.
Please note that from the beginning of 2015 any company incorporated in Ireland is considered to be an Irish tax-resident. This doesn’t apply in the case of companies that are residents in a jurisdiction with which Ireland has signed a Double Tax Treaty.
Dividends in Ireland
Irish resident companies are exempted from paying taxes on most of the dividends, but in the case of non-resident companies, dividends are taxed according to the Ireland’s taxation laws. If you are a foreign company in which less than 5% of the holding rights are held by an Irish company, the dividends will be taxed at the rate of 12.5%. The experts at our Irish lawyers, can explain all the necessary details a client needs on the tax system available in this country.
Paying corporate tax in Ireland
The financial year in Ireland begins at 1st of January and ends on 31st of December. Paying corporate tax is done in accordance to the size of the company. A company is considered to be a small one if its corporate tax liability in the year before was less than EUR 200.000. This type of company must pay one installment of the corporate tax, which is due to 31 days before the end of the accounting year.
In case of large companies, Irish law states that corporate tax must be paid in two installments, one in the first six months of the accounting period, while the second has to be paid with 31 days before the end of the financial year.
The annual corporate tax return filing and payment is one of the services offered by our team of Irish accountants. We also offer solutions for tax registration applications, monthly payroll calculations and social security payments, as well as the preparation and filing of the annual tax return. Contact us for more information about corporate tax compliance and how we can assist your company.
Our Irish law firm will offer assistance through the entire process of setting up a business in Ireland and can help you comply with the taxes available in this country. Please contact our Irish lawyers for further information.