Posts Tagged ‘transfer pricing’

Ireland as a Holding Company Location

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 »

O’Mahony Donnelly Accountants Ireland to Attend International Services Forum in London

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
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‘Irish Corporation Tax – Still an incentive for International Companies’

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 »

Finance Bill 2010 Proposes Additional Tax Changes

Tuesday, February 9th, 2010

Further to the 2010 budget announced on December 09 2009 the following key changes have been announced in the Finance Bill published on 04 February 2010:

New transfer pricing provisions for large associated companies with a requiremnet that they keep sufficient documentation to prove transactions were at ‘arms length’. SME’s have been excluded from the new provisions.
Improvements to the ‘intangible assets scheme’ by reducing to 10 years the period by which a ’specified asset’ must be used in the trade to avoid a clawback of allowances.
Foreign dividends paid out of profits of a company not reeisent in a treaty company to be taxed at 12.5% where this company is owned by a publicly quoted company.
Relief from balancing charges for cross border merger within EU.
Exemption form Irish witholding tax on royalty payments to individuals or permanent establishments based in EU or treaty countries
Removal of need for production of a certificate of tax residence or audit certificate to Irish resident companies who are paying dividends to non-Irish resident companies thus avoiding deduction of DWT. A new system to replace this will be introduced so that exemption form DWT can be claimed.
Corporate tax relief at 0% for start up companies confirmed for three years from 2010.
Proposal to abolish remittance basis of taxation for Irish domiciles who are non-ordinarily resident in Ireland. This means that Irish domiciles can no longer avail of the remittance basis for the current 3 year period whilst non-ordinarily resident.
Also stricter application of the remittance basis to individuals who are claiming non-Irish domiciled status. It appears that this means that revenue will be required to be satisfied as to a taxpayers domicile. It is unclear at this stage exactly what information they will require to support a taxpayers claim that they are non-domiciled.
The new domcile levy seeks to charge a minimum tax of e200,000 to individuals whose Irish income tax liability is less than e200,000, worldwide income is greater than e 1M andwhose Irish situated property more than e5m at 31/12 in the year concerned. Shareholdings are excluded from the definition of Irish property.
Mortgage interest relief to be abolished from 2018.
PAYE change for ‘proprietary directors’, who will no longer be able to claim credit for PAYE until such time as the company pays the PAYE deducted to the Revenue Commissioners.
Pay and file to be introduced for CAT. The year will be split in two Jan to August and Sept. to December. If valuation date is Jan. to Aug. then pay and file date is 31/10 in the year concerned. Where valuation is Sept. to Dec. then filing date is 31/10 in following year.