Corporate Tax
Irelandoffers a stable and attractive corporate tax environment for businesses in Ireland. Key tax rates applicable to businesses in Ireland are provided in this section.
Corporation tax rates
Corporation tax rates |
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Trading income (including qualifying foreign dividends paid out of trading profits) |
12.5% |
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All other income (including non qualifying foreign dividends) |
25% |
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Deposit interest retention tax (DIRT) |
27% |
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Dividends from Irish resident companies |
Exempt |
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Foreign tax suffered on foreign dividends received (underlying and withholding tax) can be credited against Irish tax payable on such dividends and any excess foreign tax credits may be pooled for offset against Irish tax payable on other foreign dividends. Separate pools are maintained for trading and non trading foreign tax credits as trading credits cannot be used to offset tax payable on a non qualifying foreign dividend.
Trading losses
Trading losses can be used as follows:
- Offset trading income and foreign dividends taxable at the 12.5% rate in the same period
- Offset trading income of the immediately preceding period
- Offset trading income of subsequent periods
To the extent not usable against trading income, a trading loss can be converted into a tax credit which may be used to reduce the corporation tax payable on other passive income and chargeable gains.
R&D tax credits
- 25% tax credit available for incremental R&D expenditure over 2003 base year expenditure
- Available for spend on qualifying R&D buildings
- Repayment of excess credits available over three year period
- Ability to account for R&D tax credit above or below the line
Capital gains tax
Capital gains tax |
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Chargeable gains |
25% |
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Gains from disposals of qualifying subsidiaries |
Exempt |
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Losses are set off against chargeable gains arising in the same year. Unused losses may be carried forward indefinitely.
Start-up companies
New or start-up companies, which were incorporated on or after 14 October 2008 and which commence trading between 2009-2011 are, subject to certain conditions, exempt from corporation tax on the income and chargeable gains arising from the trade and trading assets. This relief applies for three years from the commencement of the trade.
Closely held company surcharge rates
Closely held company surcharge rates |
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Surcharge payable on the total undistributed investment and rental income |
20% |
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Additional surcharge payable by service company on one-half of undistributed income |
15% |
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Dividend withholding tax
A withholding tax at the standard income tax rate (20%) applies to dividends and other profit distributions of an Irish tax resident company other than when made to its 51% Irish tax resident parent company. Wide ranging exemptions from withholding tax are available for shareholders in particular circumstances.
Capital allowances
Asset |
Allowance |
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Plant & machinery |
Annual allowance of 12.5% |
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Computer software packages |
Annual allowance of 12.5% |
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Motor vehicles – maximum cost allowed is €24,000 |
Annual allowance of 12.5% |
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Industrial buildings |
Annual allowance of 4% |
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Intangible assets |
Annual allowance equal to depreciation/amortisation charged to accounts or alternatively option to elect for annual allowance of 7% for 14 years and 2% in year 15 |
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Patent rights |
Annual allowance over shorter of 17 years or life of patent |
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Industrial know-how |
Once off allowance of 100% |
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Energy efficient plant & machinery |
Once off allowance of 100% |
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Scientific research |
Once off allowance of 100% |
