| | | | | | | | | | | | | | | Where a dividend is received by an Irish resident company from another Irish resident company, it is classified as ‘Franked Investment Income’ and is exempt from corporation tax.
The Finance Act 2008 introduced a 12.5% tax rate on foreign dividends out of trading profits of companies that are resident for tax purposes in EU Member States (‘EU’) or in countries with which Ireland has a tax treaty (‘DTA’).
| | | | Click here to see a full list of tax treaty countries | | | Dividends from a company resident in a non treaty state are subject to Irish tax at 25% as are dividends out of profits that are not regarded as trading profits. However, in many cases a credit will be available for withholding tax and underlying tax imposed on the foreign subsidiary, which can have the effect of reducing the Irish tax rate to nil.
A system of onshore pooling applies to allow for a situation where the foreign tax on dividends exceeds the Irish tax.
Foreign tax credit pooling provisions will apply separately to dividends that are taxable at the 25% rate and to dividends that are taxable at the 12.5% rate. Any surplus of foreign tax arising on dividends taxable at the 12.5% rate will not be available for offset against tax on dividends taxable at the 25% rate. However, there will be no restriction in the case of dividends taxable at the 25% rate. |
|
| | | | |
|
|
|
| | | | | | | |
|
|
