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Posts Tagged ‘corporation tax’
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 »
Tuesday, December 7th, 2010
Following on from Brian Lenihan’s Budget 2011 speech this afternoon we can confirm that a number of tax incentives aimed at International business have been retained.
The 0% corporation tax rate for the first three years of trading introduced for S.M.E.’s in 2009 has been extended to companies who are incorporated and begin trading in 2011. However in a surprising move Mr Lenihan has linked the relief to the amount of employers PRSI paid by an employer company in the accounting year. Therefore the amount of corporation tax relief will be restricted to the amount of employers PRSI, if this amount is lower than the corporation tax relief claimed. This is seen as a move to incentivise job creation;
The 12.5% corporation tax rate for all trading companies remains;
There has been no change in the remittance taxation basis for non-Irish domiciled individuals;
Artists exemption has been retained up to a maximum of € 40,000 income per annum;
There have been a number of other tax expenditures either abolished or curtailed as follows;
Patent Royalty exemption has been abolished with effect from 24/11/2010;
Approved share option schemes have been abolished with effect from 24/11/2010;
10% reduction in tax credits and tax bands;
Restriction of tax free element of ex-gratia termination payment to € 200,000;
Introduction of charges to PRSI on approved profit sharing schemes, approved SAYE schemes, unapproved share option schemes & share awards;
Employees PRSI and a new universal social charge (USC) will apply to employee pension contributions to occupational pension schemes;
Employer PRSI exemption on employee pension contributions to occupational pension schemes to be restricted to 50%;
Reform of stamp duty on residential homes by introducing a flat 1% rate on property values of up to € 1million and 2% rate above € 1 million;
There are many other changes introduced and if you would like to discuss how any of these may affect you see O’Mahony Donnelly Contact Details
Tags: approved profit sharing schemes, approved SAYE schemes, Approved share option schemes, artists exemption, Budget 2011, corporation tax, corporation tax rate, employee pension contributions, Employees PRSI, Employer PRSI exemption, employers PRSI, ex-gratia termination payment, Incentives for International Business, non-Irish domiciled, occupational pension schemes, Patent Royalty exemption, remittance taxation, S.M.E.'s, share awards, stamp duty, tax bands, tax credits, unapproved share option schemes, universal social charge
Posted in Budget 2011 | No Comments »
Saturday, November 20th, 2010
In an article published in a UK newspaper on Saturday it appears that fears of a hike in Irelands 12.5% corporation tax rate as a precondition of funding from IMF/EU have been allayed. The full article can be found at the following link….http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8148747/Raising-Irish-corporation-tax-not-a-precondition-for-aid.html
Ireland’s low corporation tax rate has been seen by many as pivotal to the country’s growth through foreign investment and the most significant reason for ‘household name’ companies such as Google and Microsoft locating operations here.
If you would like to discuss any business issues surrounding corporate taxation see O’Mahony Donnelly contact details.
Tags: corporation tax
Posted in corporation tax | No Comments »
Monday, September 13th, 2010
International Accountancy Services
I have just made travel arrangements today for the upcoming Enterprise Worldwide ‘International Services Forum’being held in London, UK on 30th September to 01 October. This is an annual meeting for all members who provide International accounting & taxation services to their clients. The theme of this years meeting is ‘Building Bridges’ and there are some high edge topics on the agenda, including a talk by our own Social Media expert, Ann Donnelly on ‘Putting Social Media to Work in Your Accounting Firm’. Further topics will include Transfer Pricing & IFRS for SMEs
The meeting is a great opportunity to discuss our range of services with member firms including company formation, branch registration, corporation tax planning and any other services that are relevant to foreign business entities looking to establish their business in Ireland.
As the sole Irish member we will be effectively representing Accountants Ireland to the fellow members, many of whom are US based CPA accounting firms but also with a substantial number of European accountants/firms who all have clients operating internationally.
We currently have many clients who see us as experts on advising foreign entities on company set-up and ongoing accounting and taxation issues in Ireland.
For advice see O’Mahony Donnelly Contact Details.
Tags: accountants, Accountants Ireland, Accounting Firm, branch registration, company formation, company set-up, corporation tax, corporation tax planning, Enterprise Worldwide, foreign business, IFRS, International accounting, International Services, ongoing accounting, SMEs, Social Media, Taxation, transfer pricing
Posted in Business News | 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 »
Tuesday, March 9th, 2010
If you are a foreign business considering doing business in Ireland then you will need to consider some key business issues as follows:
- Ireland’s Government attitude to Foreign Direct Investment
- The trading structure or business registration your company will take in Ireland whether this is through a place of business, branch registration or limited company subsidiary
- The legal environment for doing business in Ireland including company law, employment law & health and safety
- Irelands taxation framework including corporation tax, VAT, PAYE/payroll taxes, double tax treaties, witholding taxes, Capital gains tax, personal taxes & social insurance law (Location of your business in Ireland could ultimately reduce your overall international corporation tax bill)
- Availability of business premises & skilled employees
- Other issues such as banking, finance & intellectual property framework
We have extensive experience advising foreign companies on the issues they face when locating a business in Ireland.
Contact us to discuss in further detail. O’Mahony Donnelly Contact
Tags: branch registration, business registration, Capital gains tax, company law, corporation tax, Doing Business in Ireland, double tax treaties, employment law, foreign companies, Foreign Direct Investment, health and safety, international corporation tax, limited company, locating a business in Ireland, PAYE/payroll taxes, personal taxes & social insurance law, place of business, subsidiary, Taxation, trading structure, VAT, witholding taxes
Posted in Doing Business in Ireland | No Comments »
Wednesday, December 9th, 2009
Minsiter Brian Lenihan introduced his eagerly awaited budget speech this evening at 3.45pm presented as one with Ireland ‘on the road to economic recovery’, ’signalling to the world that we are willing to put our house in order’ and ‘difficult measures taken by Ireland this year to date have ben commended by international economic interests’. In this light and with a 4billion correction in spending required for 2010 and a target of reducing our deficit below 3% of GDP by 2014 here our the ‘highlights’.
- 6-9 months timeframe expected to see positive growth in Irish economy
- need to compete internationally with export lead growth
- income tax system considered to be ‘imbalanced’ and need to simplify and broaden the tax base
- from 2011 a new system of social welfare contributions will replace health, prsi and income levies
- a new property tax is being planned following recommendations of commission on taxation report
- domestic water rates to be introduced
- those taxpayers availing of tax incentive schemes the tax free amount is being reduced from € 250,000 to € 125,000 and any excess over this will be taxed at 30% rather than 20% in addition to the normal levies that also apply. (MOM- This will therefore affect clients who avail of artist exemption scheme)
- our non- resident tax is considered to be in line with world economies
- New tax of € 200,000 per annum on Irish domiciled individuals i.e. those with income greater than € 1million pa and Irish capital assets of € 5 million plus. (This appears to affect non-resident Irish domiciled individuals….therefore for non-domiciled Irish residents there appears to be no changes to remittance basis of taxation……..)
- Public servants pay to be reduced between 5 and 15%
- cost of living has reduced by 6.5% during last 12 months
- child benefit to be reduced by € 16 per child
- Employers PRSI exemption will be available to encourage employers to hire unemployed people
- Excise duties to be reduced on drink (as a measure to stop cross border trade, which account for 44% of all cross border trade)
- VAT rate reduction from 21.5% to 21%
- Car scrappage scheme for cars 10 years old in 2010
- New credit review system for SME’s making credit applications…with independant review body to oversee and appeals on applications can be made
- Agriculture…a new 5 year agri-environment scheme to be introduced (MOM- presumably this to replace the REPS scheme which was discontinued for new enterants after May 2009)
- Corporation tax …no change to the 12.5% rate which firmly remains.
- Corporation tax …The 0% rate introduced in 2009 to be extended to new companies who begin trading in 2010 (MOM- This is a welcome incentive to business to encourage new start-ups both domestic and international, which can have a spin off effect to the economy in relation to creation of new jobs etc)
I will have more information once the detail unfolds over the coming days and will be happy to update you and answer any questions you may have….O’Mahony Donnelly Chartered Certified Accountants Contact Details
Tags: artists exemption, Budget 2010, corporation tax, income tax, irish domicile levy, Non-Domiciled, non-resident tax, tax incentives, VAT
Posted in Budget 2010 | No Comments »
Thursday, November 12th, 2009
The tax free threshold of 0% corporate tax which applies to Irish Limited Companies that are incorporated and begin trading no later than 31/12/2009 will soon arrive. This deadline is further shortened by the CRO (company registration office) christmas opening times. They can only guarantee new company applications received by 14/12/2009 will be processed before 31/12/2009. To meet the criteria as incorporated and having begun trading during 2009 a tax registration application also has to be submitted. This can only be done after the company is incorporated. It is therefore vital that these applications are made now, preferably in November, to ensure you meet the above conditions.
Tags: corporation tax, Irish Limited Companies, tax registration
Posted in Corporation Tax Exemption | No Comments »
Friday, December 12th, 2008
Following on from our latest budget announced on 14/10/2008 I attended a seminar in cork before Christmas, which re-affirmed the attractive changes announced recently for limited companies, already a great proposition for new business in Ireland.
These changes will exempt Irish limited companies from corporation tax for a period of three years form 01/01/2009. There are conditions and limits, I can provide further details if you would like to contact me, but this will benefit Irish business to the tune of thousands of euro. if you are thinking of starting a new business here I would strongly recommend you contact me. (more…)
Tags: corporation tax, Irish Limited Companies
Posted in Irish Limited Companies | 1 Comment »
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