|
You are here: Blog Home » Taxation
Archive for the ‘Taxation’ Category
Wednesday, June 15th, 2011
New tax changes for registered civil partners and qualified cohabitants were announced recently following publication of the Finance (No 3) Bill 2011.
A civil partnership is defined as a relationship similar to marriage for two people of the same sex who enter into a legal agreement governed by the ’Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010′.
Qualified Co-habitants are broadly defined as a same or opposite sex adult couple who are not married nor in a civil partnership, unrelated, living together in an intimate relationship and have lived together for 5 years (or 2 years if they have had a child together)
The tax changes involve income tax, capital gains tax, capital acquistion tax and stamp duty and they seek to give similar taxation rights to ‘civil partners’ and ‘qualified co-habitants’ as follows:
1. Civil partners can choose how they are assessed, either singly, jointly, separately in the same way as married couples.
This will bring a tax benefit as tax credits may be pooled between them, whereas before the changes they may have been lost.
Qualified co-habitants cannot choose to be jointly or separately assessed and will continue to be taxed as single individuals
2. In the year of registration of civil partnership the individuals are taxed as single persons but with a provision to refund tax should this result in a higher liability than if being taxed as civil partners
3. Civil partners can transfer the family home to their partner without any liability to capital gains tax or capital acquisition tax
For qualified co-habitants CGT exemption via principle private residence relief may apply to the transferor
For qualified co-habitants capital acquisition tax will apply on the excess over € 16604 at 25%
There are many other provisons in the Finance (No 3) Bill 2011 and if you would like an opinion on your own situation please contact us at the following link
http://www.omahonydonnelly.ie/contactus.htm
Tags: capital acquisition tax, Capital gains tax, civil partnership, Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010', Finance (No 3) Bill 2011, income tax, principle private residence, Qualified Co-habitants, stamp duty, tax credits, taxation of civil partners
Posted in Taxation | No Comments »
Monday, May 30th, 2011
Introduction to the Irish Holding Company Regime
Due to changes in Irish government fiscal policy over several years, Ireland has become a favoured location for holding companies for many US & UK international trading corporations. Our low corporate tax rate has gained many news headlines in Europe, particularly during Ireland’s IMF/EU financial structuring deal. However, our low corporate tax rate is only one of many reasons to locate your corporation here.
Key Benefits of Locating Holding Company in Ireland
- Low corporate tax rate of 12.5% on trading profits, without limit.
- Finance Act 2011 introduced an extension to 0% corporate tax rate for new start-up companies for the first three years of trading. The tax benefit has been capped to the amount of employers PRSI paid on the employees’ salaries, to aid job creation.
- No dividend withholding tax (DWT) on payments made to individual shareholders resident in either an EU or double tax treaty country.
- No DWT applies where they are paid to a non-resident company shareholder where that company is not controlled (50% or more shareholding) by Irish residents
- Dividends received by an Irish holding company from trading profits of a subsidiary are generally taxed at 12.5% corporation tax.
- Limited transfer pricing legislation which only applies to large companies with a turnover of more than €50M, employees of more than 250 and, assets over € 43m
- Capital Gains tax exemption for disposal of shares in a subsidiary company. There is a minimum share holding requirement of 5% and shareholding period of 1 year, plus other conditions.
- Double tax treaty network with 55 countries in effect and 7 more waiting to be implemented which simplify the distribution of profits internationally and provides some clarity to our direct tax system and how it applies in conjunction with an EU or DTT country.
- Membership of the EU and Euro currency gives Ireland an advantage when trading with fellow EU countries
- The ability to combine trading activities with its holding company function i.e. charging fees for managing a foreign subsidiary would be deemed to be an economic trading activity and the profits of such an activity would attract low corporation tax.
- No ‘Controlled Foreign Company (CFC)’ or ‘Thin Capitalization rules’ are currently in force in Ireland
- There is a favourable approach by the Irish Government to foreign owned holding companies
- Low capital start up costs for investing in an Irish limited company
- Remittance taxation system available for non-domiciled Irish resident individuals provides a tax incentive to foreign individuals re-locating to Ireland
- Abolition of employers PRSI on share based remuneration in Finance Act 2011 significantly reduces employers costs and is a significant benefit in deciding on whether to locate in Ireland.
If you are considering locating a holding company in Ireland and require further advice on these issues please see O’Mahony Donnelly Contact details
Tags: Capital Gains tax exemption, Controlled Foreign Company, corporate tax rate, corporation tax, dividend withholding tax, double tax treaty, employers PRSI, Irish Holding Company, irish limited company, Non-Domiciled, remittance taxation, start-up companies, Thin Capitalization, transfer pricing
Posted in Taxation | No Comments »
Thursday, May 12th, 2011
Following the announcement on Tuesday 10th May by Finance Minister Michael Noonan of his much awaited Jobs Initiative, only the course of time will prove whether the Irish tax changes will be enough to meet his objectives of ‘incentivising entrepreneurship and Job creation’.
Some of the key measures are that are hoped will help rebuild confidence in Irelands economy to those in Ireland and abroad.
1. Commitment to our 12.5% corporation tax rate to favour existing and prospective investors. This is something that continues to have broad cross party support in Ireland, despite requests by EU neighbouring countries to increase it.
2. Amendment to Research and development tax credit scheme that allows companies more flexibility as how they account for the credit. This will increase attractiveness of Ireland as an international trading location to internationally mobile R & D multinational firms.
3. Abolition of employers PRSI charge with efect from 01/01/2011, on share based remuneration. It is expected this will have a positive impact on decisions on whether to locate here due to reducing the employers costs.
4. Reduction in reduced VAT rate from 13.5% to 9% effective from 01/07/2011 until 31/12/2013, which is expected to benefit the jobs rich, labour intensive tourism sector. Other non-tourism related businesses who currently pay VAT at reduced rate of 13.5% will not change.
5. Abolition of Air Travel tax
6. Common Visa treatment with the UK for overseas visitors. Where such visitors already hold a UK visa this will enable them also to travel to Ireland.
7. Lower rate of Employers PRSI of 8.5% to be halved with effect from 01/07/2011 until 31/12/2013
8. Pension levy on the value of pension funds of 0.6% until 31/12/2014
These are the headline measures announced and if you would like to discuss how this may affect your existing or potential business then contact me at http://www.omahonydonnelly.ie/contactus.htm
Tags: Air Travel tax, corporation tax, employers PRSI, Irish Taxation, Jobs Initiative, Pension levy, Research and development tax credit, share based remuneration, VAT
Posted in Taxation | No Comments »
Sunday, November 28th, 2010
Ireland’s Finance Minister, Brian Lenihan announced on Wednesday, 24th November, summary details of the governments budget plan 2011-2014. This plan is a requirement for meeting the objective of reducing Irelands budget deficit by 15billion over the four years. Full details of the 140 page report can be found at
http://www.budget.gov.ie/The%20National%20Recovery%20Plan%202011-2014.pdf
The most significant details of the plan are as follows;
1. Corporation tax rate of 12.5% will remain.
2. Abolition of ten tax expenditures
3. Curtailment/restriction of a further six expenditures including;
Artists exemption (on income over € 40,000 per annum)
Ex-gratia termination/pension lump sum payments in excess of € 200,000 to be taxed
3. Increase in VAT rate by 2% to 23% over two year period 2013-2014
4. Pension scheme contributions to attract 20% rate tax relief only. This is to be phased over 2012 to 2014
5. Income and PRSI levies to apply to pension contributions
6. There is no specific proposal to change the current remittance tax basis for non-domiciled individuals. I would expect that the detail in the upcoming budget on 7th December will confirm this, given the importance Ireland places on Foreign Direct Investment, our 12.5% corporation tax rate and the link this has with foreign nationals relocating here.
7. Reform of CAT and CGT in 2012
If you would like to discuss how any of these changes may affect your business please see O’Mahony Donnelly Contact details.
Tags: corporation tax
artists exemption
VAT
pension contributions
Income and PRSI levies
remittance tax basis
non domiciled
budget plan 2011-2014
Posted in Taxation | No Comments »
Tuesday, September 7th, 2010
Following my recent article on Corporation Tax in Ireland including the three year corporate tax exemption & recent changes in transfer pricing rules there has been news this week of the continung trend for multinational/International companies locating their activities in Ireland.
This is buoyed by goverment pressure from USA & UK offshore jursidictions such as Cayman Islands & Bermuda. Our low corporation tax rates and the continuing government commitment to these also offers a great incentive and presents a desirable option to Foreign owned corporates.
We continue to notice a steady stream of foreign companies locating in Ireland who generally operate though a private limited company or branch.
A copy of our article on corporation tax in Ireland can be viewed at http://www.omahonydonnelly.ie/corporate-taxation-ireland.html
If you would like assistance and advice on Irish corporation tax issues and setting up a private limited company or branch then we are well placed, being experienced accountants, located in Cork, Ireland with considerable experience of advising US, UK and foreign companies locating in Ireland.
Michael O’Mahony FCCA
O’Mahony Donnelly Contact Details
Tags: Branch, corporate tax exemption, corporation tax, foreign companies, International Companies, Irish Corporation Tax, private limited company, three year corporate tax exemption, transfer pricing
Posted in Corporation Tax | No Comments »
Monday, May 24th, 2010
I was discussing with a new client today the new process for non-resident corporate shareholders to receive dividends from their Irish subsidiary. The latest Finance Bill has simplified the process of paying dividends free of Irish witholding tax, currently at 20% of the gross dividend.
Providing the non-resident company is located either in the EU (except for Ireland) or a double tax treaty country – DTT (of which there are currently 48 in force) and a declaration has been made in the prescribed format then it is possible to pay dividends in this way.
How the dividends are then taxed in the recipients country of residence depends on the tax laws of that country.
If you would like assistance with this process either in Ireland and/or in the recipient country See O’Mahony Donnelly contact details.
We can also introduce you to one of our associated firms in Enterprise Worldwide who can assist with advice in the parent company’s country.
Tags: Dividend Witholding Tax, Dividend Witholding Tax Exemption, dividends, double tax treaty, double tax treaty country, Enterprise Worldwide, Finance Bill, Irish subsidiary, Irish witholding tax, non-resident company, Non-Resident Corporate Shareholders, parent company's
Posted in Taxation | No Comments »
Thursday, September 3rd, 2009
The commission on taxation, set up on 14/02/2008 by Brian Cowen ’to review the structure, efficiency and appropriateness of the Irish taxation system’ is set to publish its report next monday 07/09/2009. The objective of the commission was ‘to establish the framework within which tax policy would be set for the next decade at least’. This could well result in far reaching changes for our tax system. More information can be found at http://www.taxcommission.ie/. Following publication of next weeks report I would be happy to assist with any queries you may have on how this affects your own business or personal tax status. O’Mahony Donnelly Chartered Certified Accountants Contact Details
Tags: commission on taxation
Posted in Taxation | No Comments »
|
Subscribe in a Reader
