Ireland is an island nation, a member of the European Union, one of the most progressive and stable economies in the world today. The current profit tax rate of 12.5% for trading companies is one of the lowest in the world, and 25% for non-trading companies. An ideal business environment for both start-ups and large holdings. Multinational corporations establish their headquarters in Ireland. Financial statements are mandatory for government agencies, company audits are optional for small and micro-companies.
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In accordance with the requirements of section 282 of the Companies Act 2014, every company must properly keep accounting records sufficient to:
Accounting data must contain in particular:
If there are commodity transactions in the company’s financial and business activity, its accounts must contain:
In accordance with the requirements of the tax legislation, a company must keep source documents during 6 years after the end of the reporting period.
In accordance with the Companies Act 2014, companies’ directors must provide shareholders with the following information at an annual general meeting:
Annual financial statements and a directors’ report must be signed on behalf of the company by two directors. If the company is a limited liability company or private limited company incorporated in accordance with the Companies Act 2014 and it has only one director, the documents shall be signed by the sole director.
All the above statements and reports must be enclosed with the annual return and provided to the Companies Registration Office. In addition, a certificate signed by director and secretary must be provided confirming that the presented financial statements are a real copy of the statements approved by the general meeting of shareholders. Micro and small companies can be exempted from the submission of the full financial statements according to section 352 of the Companies Act 2014 and exempted from audit according to section 350 of the Companies Act 2014.
Financial statements are not required to be enclosed with the first annual return presented within 6 months after incorporation of the company. Financial statements must be enclosed with all subsequent annual returns.
Since the Russian law does not have an analog to annual return, we consider it necessary to clarify this term. Annual return is a short report on the current structure of the company that is prepared by the company’s secretary annually. Normally, it includes:
Each Irish company must file an annual return with the Companies Registration Office: annual return and financial statements.
A reporting period lasts 12 months (the first reporting period lasts 18 months). A company can by filing a completed form B83 with the Registrar apply for a change (shortening or extension) of the date of the end of the current or previous financial year, which will become the date of the end of financial year in the future.
Financial statements shall be filed along with an annual return. If financial statements must be enclosed with an annual return, the due date of submission is the earliest of the dates: either the company’s ARD (annual return date) plus 56 days, or the end of the company’s financial year plus nine months and 56 days.
Each company has a set ARD, which can be checked at the register of companies.
A company’s ARD is the latest date by which the annual return must be made. An ARD cannot be later than 9 months after the end of the financial year.
An annual return must be delivered to the CRO not later than 56 days after its effective date. This means that if an annual return is made up to a date earlier than the company's ARD, it should be delivered to the CRO within 56 days after that earlier date.
If the 56-day filing period expires on a Saturday, Sunday or public holiday, the 56-day period is extended to the next working day.
If financial statements are required to be enclosed with the return, the filing deadline is either the company's ARD plus 56 days or the company's financial year-end plus nine months and 56 days, whatever is the earliest.
The tax period coincides with the company’s financial year, but must not exceed 12 months.
A corporation profit tax return shall be filed within 9 months after the end of the tax period.
In many EU countries, including Ireland, VAT registration is done separately from a company’s general tax registration and only when such registration is necessary based on the company’s real activity.
Normally, a VAT return is filed and the tax is paid 6 times a year (every 2 months). Hence, the VAT periods are as follows: January-February, March-April, May-June, July-August, September-October, November-December.
If the VAT payable for the last year was less than 3,000 EUR, the VAT period is extended to 6 months: January-June, July-December.
If the VAT payable for the last year was between 3,000 and 14,400 EUR, the VAT period will be 4 months: January-April, May-August, September-December.
In addition, if a company makes transactions of purchase and sale of goods and services with companies incorporated in other EU countries, it must register in the INTRASTAT and VIES systems and file information with the tax authority in the prescribed form.
If a statement is filed late, a fine and sanctions will be imposed by the Registrar. In the case of late filing (i.e. later than 56 days after the effective date of the annual return), a 100 EUR fine is imposed starting on the day of expiration of the filing period, and 3 euros for each day of failure to comply. The maximum amount of the fine is 1,200 EUR.
In addition, the Registrar can impose a fine on the spot, if the company has records of systematic late filing of documents and/or summary prosecution of the company and/or any officer that has violated obligations. Fines of up to 5,000 EUR can be imposed for violation of the annual statements filing requirements.
Any company that fails to file an annual return for any year can be removed from the register and dissolved.
Large companies make two advance payments and a final payment, small companies (whose profit tax in the preceding period is less than 200,000 EUR) make one advance payment and a final payment. A company must make this payment not later than on the 23rd day of the ninth month if the company files documents in an electronic form, and not later than on the 21st day of the ninth month if the company files documents on paper.
A company must:
The late payment interest rate is 0.0219% per day for late payments or payments that have not been made in full. The interest is calculated by the multiplication of:
If tax accounts are not filed and the tax is not paid within the prescribed period, the company will also have to pay an additional fee of:
The value-added tax must be paid by the 19th day of the month following the end of each reporting period.
If the VAT is not paid on time, interest will accrue daily from the due date of the payment to the date of payment of the remaining amount. The interest rate is 0,0274% per day or part of day.
Companies incorporated in Ireland must annually file audited financial statements with the Companies Registration Office. The following, however, in accordance with the Companies Act 2014 have the right to be exempted from audit:
Director is responsible for classifying a company as small or dormant. If director believes that the company meets the requirements of sections 360 and 365 of the Companies Act 2014 and, therefore, can be exempted from audit, they include in the accounts a proper statement containing reference to the sections of the Companies Act 2014. In addition, director must declare that shareholders have not exercised their right in accordance with section 334 and have not requested an audit.
A company is deemed a micro company in the first financial year if in that year it meets at least two of the three below conditions:
A company is deemed a micro company in consequent financial periods if:
Conditions for deeming companies micro companies (2 or more conditions must be met simultaneously):
The following cannot be classified as micro companies:
Micro companies can be exempt from requirements regarding annual financial statements, can be exempt from audit and can be allowed to file a condensed report.
Micro companies that aspire to be exempt from audit and to be able to file condensed statements must file:
A company is deemed a small company in the first financial year if in that year it meets at least two of the three below conditions.
A company is deemed a small company in consequent financial periods if:
Conditions for deeming companies small companies (2 or more conditions must be met simultaneously):
Open joint stock companies and companies of some regulated industries cannot be classified as small companies.
Small companies that aspire to be exempt from audit and to be able to file a condensed statement must file:
Besides preparation of their own financial statements, holding companies must prepare consolidated financial statements of the group and present them at a general meeting of shareholders at the same time with their own annual financial statements. The requirement to prepare financial statements of the group is contained in section 293 of the Companies Act 2014: “Where at the end of its financial year a company is a holding company, the directors of the company, as well as preparing entity financial statements for the financial year, shall prepare group financial statements for the holding company and all its subsidiary undertakings for that financial year.”
Exemption from consolidation in accordance with section 293 of the Companies Act 2014 as amended by section 19 of the Companies Act 2017, for financial years starting on 1 January 2017 or after that date, applies to holding companies that meet the requirements for small companies in accordance with section 280B or for micro companies in accordance with section 280E.
Rules for classifying a group of companies as small are similar to the rules for separate companies; the following qualifying conditions must be met (2 or more simultaneously):
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