| When setting up operations in Ireland, it is important to consider whether those operations should be carried out by a subsidiary at the start, or whether a branch may be more appropriate. An Irish tax resident company is subject to tax on its worldwide profits and gains. Generally, profits of an Irish subsidiary will not be subject to tax in the jurisdiction of the parent company until such time as the profits are repatriated (i.e. dividends paid from subsidiary to parent). However, certain jurisdictions may employ CFC (Controlled Foreign Company) or other similar rules, which will tax profits of a foreign subsidiary as they arise. |
| Therefore, the 12.5% trading corporation tax rate is unlikely to be a benefit to a branch where the company is located in a jurisdiction with a higher tax rate, as the profits are taxed in the period in which they arise. However, a subsidiary may be able to benefit from this low rate, and avoid repatriating profits to a higher tax jurisdiction for an indefinite period. |
