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Company in Ireland

General information

12,5%

Tax rate

2 working days

Time of establishment of the company

None

Minimum capital

Ireland has a dynamic and global economy, highly dependent on trade. Its GDP growth averaged 6% between 1995 and 2007, which earned it the name “Celtic Tiger.” In response to the crisis, the Irish government has implemented a series of national economic programs designed to reduce prices and wage inflation, invest in infrastructure, enhance the workforce’s skills, and promote foreign investment.

Types of companies

There are several types of businesses for foreign investors:

  • Limited liability company (PLC);
  • Partnerships – e.g. Limited Partnership;
  • Branch of a foreign company.

Ireland is considered a European tax haven. The low CIT rate, the non-taxation of partnerships where the income does not come from sources located in Ireland, or the non-taxation of dividends makes Ireland one of the most frequent choices for clients investing in Western Europe. In particular, companies are often established in Ireland in the case of IT projects (including cryptovalutes). No wonder also holding, service and production solutions with the use of Irish companies – correct configuration of the company allows for safe tax optimization.

Company registration procedure

Registration of the company:

  • To register a company in Ireland, please check whether the name you have chosen is available, if so, by registering with the Companies Registration Office.
  • The next step is to register your company with the Tax Office.
  • The last stage is the creation of a bank account and company insurance.

Shareholders:

Minimum 1 maximum 149 shareholders. Foreign shareholders are allowed.

Management Board:

The company is managed by the Board of Directors.

Board of Directors:

At least one director and secretary of the company, who may also be a director (if the company has one director it cannot be the same person).

Registered office:

The company must have a registration address in Ireland – you can use the services of a virtual office.

Time to set up a company:

The time to set up a company is approximately two working days.

Capital:

No minimum capital.

Taxes and finances

Tax residence of the company

A company is resident if it is managed and controlled from the territory of Ireland and in some cases when it is registered there. However, a company incorporated in Ireland is not considered to be resident if its tax residence is in another country. Residents pay tax on income from both domestic and non-resident activities. Non-residents pay tax only on income earned in Ireland. It is levied on the company’s receipts from its activities, passive income and capital gains.

CIT rate

The rate is 12.5% for income from trade; 25% for non-commercial income. Normal operating expenses can be deducted. Only tax depreciation (straight-line method) is allowed. The rates are: 4% – industrial buildings; equipment and machinery – 12.5%; vehicles – 12.5%. Losses can be carried forward indefinitely and can be deducted at any time in the future. Retrospective loss relief is allowed, but only for the same period as the one in which the loss occurred. Capital gains are taxed at 33% and 40%.

Double taxation

Ireland is a party to a number of treaties that provide businesses with an exemption from double taxation.

Counteracting tax avoidance

Transfer pricing: full competition applies. The Irish Transfer Pricing Guidelines largely follow those issued by the OECD. International companies with a total turnover of more than 750 million Euros have to prepare a report on their activities in each country.

Accounting

The tax year is the same as the tax year, usually 12 months. The tax return must be filed within 9 months of the end of the tax year. Companies whose tax liability from the previous tax period exceeds EUR 200,000 pay the tax in two instalments: 21 June and 21 November. Tax returns and payments are submitted electronically. Submission of consolidated statements is not allowed, however, losses may be written off between group members who are EU residents. Companies are considered to be a group if one of them holds at least 75% of the other. The limitations period for tax liabilities is 4 years (from the end of the tax year).

Withholding taxes

  • Dividends and Interest paid to non-residents are taxed at a rate of 20% unless tax agreements or EU directives reduce it.
  • Patent fees – the rate of 20%, unless tax agreements or EU directives reduce it.

VAT

The standard rate is 23% (reduced by 13.5%; 9%; 4.8%; 0%). Entrepreneurs whose annual turnover exceeds EUR 75,000 are obliged to register for VAT, 90% of which comes from the supply of products which are not subject to the zero rate but are produced from raw materials covered by it. Other entrepreneurs register when the annual turnover exceeds 37500 Euro. Declarations and payments are made every 2 months.

Other taxes

  • Real estate tax – local authorities levy a tax on commercial real estate. The rate depends on their value, which is also estimated by the local administration.
  • Stamp duty – stamp duty is levied on the transfer of real estate, shares and securities – the rate ranges from 1% to 6%.
  • Customs duty is levied on products originating outside the EU. The excise duty is levied on alcoholic beverages, tobacco products as well as on mineral oils and their derivatives.
  • The tax on carbon monoxide emissions depends on the type of fuel.
  • Tax on water consumption, electricity, waste production, consumption of electrical and electronic equipment.

Local labor law

Other information

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