Taxation in Ireland

The income tax in Ireland

Ireland has a tax credit system when calculating the income tax. Once the Irish income that will be taxed is determined, the tax is calculated and, if any, tax credits are deducted. Irish employees must apply for a Certificate of Tax Credits and Standard Rate Cut Off Point that will allow the PAYE  (Pay As You Earn) system to calculate the personal tax credit and band. Our Irish company formation experts can tell you more details about the PAYE system. The income tax also applies to all properties, gain and profits. The taxable income is divided into Irish schedules, as it follows:

• - Schedule C is for revenues from public dividends,
• - Schedule D applies profits from trading activities, interests, discounts, annual profits and rentals,
• - Schedule E applies to incomes from public offices, pensions and employment,
• - Schedule F applies to dividends earned from companies registered in Ireland.

The standard rate for the income tax is 20% and applies to the first 33,800 euros for individuals without any children, for the first 37,800 euros for singles, widowed individuals or single parents and the for the first 42,800 euros for married couples. The Irish tax system also comprises a higher income tax rate established at 40%.

The taxation of companies in Ireland - presented by our Irish company formation consultants

Companies in Ireland are subject to the corporate tax of 12.5% applied to trading activities and 25% applied to non-trading activities. Non-trading activities are represented by dividends earned from foreign companies, rentals, interests and royalties. However, Ireland has concluded many double taxation agreements in order to avoid certain incomes such as dividends to be taxed twice. Foreign companies are also applied the 12.5% corporate tax rate which is what makes Ireland a very attractive destination for foreign investors.

Our Ireland company formation agents present the other taxes applied to companies in this country:

• - the capital gains tax of 33% and 40%
• - a carbon tax of 15 euros per ton,
• - stamp duty of 1 to 9%.

Irish companies benefit from attractive tax exemptions, such as a three-year corporate and capital tax exemptions for newly incorporated companies. The government also established a favorable tax regime for companies operating in the Research & Development sector.

We are at your service if you want to open a company in this country. Setting up a company in Ireland is a safe and legal option to reach the European and American markets with your products and services. Even non-residents can incorporate a firm in Ireland, giving them the opportunity to seize possibilities they would otherwise pass up in their home country. The process of forming a company in Ireland is not difficult with the help of our agents.

The value added tax in Ireland

The standard rate for the value added tax in Ireland is 23%, but reduced rates apply as it follows:

• - a 13.5% rate applies to medical services,
• - a 9% rate applies to restaurants, hotels, entertainment events,
• - a 4.8% rate applies to foodstuff,
• - a 0% applies to books and medical products

For detailed information about the Irish taxation system and registration for taxation purposes please contact our specialists in Ireland company formation matters.