Ireland tax system: audit, reporting and optimization of taxation of Irish companies and individuals: VAT, income tax and capital gains

Basic taxes (briefly)

Personal tax 20%/40%
Corporate tax (in detail) 12.5% for Trading Income, 25% - Non-trading income
Capital gains tax. Details Capital gains In Ireland are taxed at 33%. Gains on the sale of substantial shareholdings in companies resident in EU member states or a tax treaty country are exempt if certain conditions are satisfied.
VAT. Details The standard VAT rate is 23%. The reduced rates are 13.5% and 9%
Other taxes real property tax, capital acquisition tax, social security contribution
Government fee
Stamp duty 1-7,5%

International tax agreement

Albania, Armenia, Australia, Austria, Bahrain, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, Former Yugoslav Republic of Macedonia, France, Georgia, Germany, Greece, Hong Kong (China), Hungary, Iceland, India, Israel, Italy, Japan, Kazakhstan, Korea (Republic of), Kuwait, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Moldova (Republic of), Montenegro, Morocco, Netherlands, New Zealand, Norway, Pakistan, Panama, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, Turkey, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Viet nam, Zambia
   
Anguilla, Antigua and Barbuda, Argentina, Bahamas, The, Belize, Bermuda, Cayman Islands, Cook Islands, Dominica, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, Liechtenstein, Marshall Islands, Montserrat, Saint Kitts and Nevis, Saint Lucia, Samoa, San Marino, Turks and Caicos Islands, Vanuatu, Virgin Islands, British


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Individual Taxation

Tax residents with a domicile in Ireland pay income tax on their worldwide income.

Non-domiciled tax residents in Ireland pay income tax on income from sources in Ireland and foreign income remitted to Ireland.

Non-residents pay tax on income from sources in Ireland.

The rate of tax is 20% on income up to 36,800 EUR and 40% on the excess.

Capital gains are taxed at a rate of 33% (in some cases other rates apply).

Income tax

Tax residents pay tax on worldwide income; non-residents pay tax on income from sources in Ireland.

The rate of income tax is 12.5% on trading (active) income and 25% on passive income.

Capital gains are taxed at the rate of 33%.

Profits from the sale of shares may be tax-free subject to certain conditions, in particular, if at least 5% of the shares are held within 12 months in respect of active trading companies from EU countries or countries with treaties on avoidance of double taxation.

VAT

The standard VAT rate is 23%.

For some goods and services, reduced VAT rates are 13.5% and 9%.

Social contributions

For the bulk of employees, social contributions (PRSI) is 11.05% for employers and 4% for employees.

There are non-taxable minimums.

Universal Social Contribution (USC) is paid by the employee at progressive rates ranging from 0.5% to 11%.

There are nontaxable minimums.

Withholding Tax

When dividends are paid, withholding tax is withheld at a rate of 25%.

There are exceptions. In particular, tax may not be withheld when dividends are paid to companies in countries with a double taxation treaty with Ireland or in an EU member state.

With regard to interest, the tax rate is 20%. However, in many cases no tax is withheld, for example when companies pay interest to companies in countries with a double tax treaty with Ireland or an EU member state.

When royalties are paid on patents and certain other royalties, tax is withheld at the rate of 20%.

Withholding tax at the rate of 15% is withheld with respect to gains from the sale of certain assets.

A withholding tax may also be imposed in certain other cases.

The tax can be reduced under agreements on avoidance of double taxation or EU directives.

Stamp Duty

Stamp Duty is levied on transaction documents.

The base - the transaction amount or market value if it is higher.

Rates range from 1% to 2% for residential property transactions, 7.5% for non-residential property and some other transactions, and 1% for shares (7.5% for shares in some non-residential companies in Ireland).

Capital Acquisitions Tax (CAT)

CAT is a tax on inheritance and gift tax.

The rate of tax is 33%.

There are non-taxable minimums and their value depends on the degree of kinship of the parties.

Property Taxes

Local Property Taxes (LPT) are paid on residential property.

Tax rates range from 0.18% to 0.25% depending on the assessed value of the property.

Local taxes (rates) are also levied on notional rental income from commercial property.

Rates vary from region to region.

CFC rules

A foreign company is deemed controlled if it owns more than 50% of the participatory interest in the capital, or more than 50% of the voting rights, or such interest in the capital that allows to control the formation of the board of directors, or the right to receive more than half of the distributed profits or assets on liquidation.

The profits of a CFC are subject to tax in Ireland if the profits arising from the CFC can be reasonably attributed to the performance of the functions of key people in Ireland or the bearing of the principal business risks in Ireland.

There are various exemptions, including an exemption on the basis of a high effective tax rate, profits below a certain limit, low margins, no purpose of avoiding tax, etc.

Double taxation treaties

Ireland has entered into a number of double taxation avoidance and tax information exchange arrangements:

73 DTCs: Albania, Armenia, Australia, Austria, Bahrain, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, Former Yugoslav Republic of Macedonia, France, Georgia, Germany, Greece, Hong Kong (China), Hungary, Iceland, India, Israel, Italy, Japan, Kazakhstan, Korea (Republic of), Kuwait, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Moldova (Republic of), Montenegro, Morocco, Netherlands, New Zealand, Norway, Pakistan, Panama, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, Turkey, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Viet Nam, Zambia.

27 TIEAs: Anguilla, Antigua and Barbuda, Argentina, Bahamas, The, Belize, Bermuda, Cayman Islands, Cook Islands, Dominica, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, Liechtenstein, Marshall Islands, Montserrat, Saint Kitts and Nevis, Saint Lucia, Samoa, San Marino, Turks and Caicos Islands, Vanuatu, Virgin Islands, British.

Exchange controls

There are no exchange controls in Ireland.

    Taxes of Ireland

    Min. rate for corporate tax 12,5%/25%
    Capital gains tax 33%
    VAT 23%
    Withholding tax 25%/20%/20%
    Exchange control No
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