Taxation in Ireland
Taxation in IrelandUpdated on Monday 05th December 2022
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According to Ireland’s tax laws, all types of companies and all Irish residents are subject of taxation.
Our team of Irish lawyers can help clients by offering them all the necessary information about the taxes applied to legal entities.
Taxes applied to companies in Ireland
In Ireland, the tax on trading income is 12.5%, while non-trading income is taxed at 25%. These taxes are charged on worldwide profits for all Irish resident companies. Also, non-resident investors opening a branch in Ireland are taxed at these rates for a part of the profits resulted from the business activity of the Irish branch. In terms of social security taxes, employers have to deduct at source a tax of 10.75% for each employee, as stated in the Irish “Pay Related Social Insurance”.
Since the 1st of January 2012, the Value Added Tax (VAT) in Ireland is established at 23% and it is applicable to all commercial activities, except for certain categories of goods and services, to which the Irish government applies a VAT of 9%. Please contact our lawyers in Ireland to find out more about the VAT legislation.
Corporate capital gains are charged with 33%, but in some cases the tax can grow up to 40%.
Our law firm in Ireland can offer you more details about the Irish corporate tax.
Taxes applied to residents in Ireland
Irish residents are taxed on the income resulted from commercial activities earned on the territory of Ireland or on a worldwide income, as long as the person has a permanent Irish residency. Taxes are applied through the “Pay As You Earn” system, meaning that each monthly income received by an employee is subjected to taxation. In the case of a foreign resident who is working in Ireland, taxes will be charged only for the income resulted from commercial activities in the country.
According to the Irish law, a person is considered a tax resident in the following situations:
• if the person has spent at least 183 days per year in Ireland;
• if the person has spent 280 days in Ireland, over a period of two years.
Income taxes in Ireland are progressive, varying from 20% to 40%. Earnings below 38.000 EUR are charged with a tax of 20%, while earnings over 38.000 EUR are taxed with 40%.
The capital gains for individuals are taxed with 33%, but in some cases, the Irish government offers tax exemptions. These are available for gains obtained from betting, lottery or for the sale of a main residential asset. We can also give you information on the taxes that apply to inheritance, and on making a will in Ireland, if you wish to know more.
You can make sure that the company is fully compliant with the current tax requirements by choosing our accountancy services. Our dedicated accountants in Ireland can offer packages suited to the needs of all types of companies and, upon request, for sole traders. We can help you file the annual return, make the needed corporate tax payments and make the needed tax registration applications.
Please address to our law firm for more details about the Irish taxation system. Our Irish lawyers will provide you with all the necessary information on this matter.