Home About Us Services Tax Booklet 2011 International Services Useful Links Contact Us                      Be part of Ireland's Smart Economy Advantages of locating in Ireland        Latest Economic Commentary Budget 2012 An Assessment        Starting your own Business? Tax Exemption for Start-Up Companies        Useful Resources: Key Tax Planning Dates for 2012 Tax Planning Tips for 2012               Irish Holding Companies               Introduction Dividend Income Capital Gains Tax Exemption Dividend Withholding Tax Miscellaneous Features Tax Rates for Irish Companies Incorporating an Irish Company Contact Us for more information Miscellaneous Features        Controlled Foreign Company (“CFC”) Regulations Ireland does not have any CFC regulations and therefore it is possible for an Irish company to hold shares in companies that are resident in other jurisdictions and not require the profits of the entity in the other jurisdiction to be repatriated to Ireland. Many other international holding company locations include CFC rules which can limit the range of countries into which they can invest.        Thin Capitalisation Rules The ability of a holding company to finance its operations by means of borrowings is restricted in many territories due to the imposition of thin capitalisation rules requiring that companies be financed in part by equity. This can limit a company’s ability to expand its operations. Ireland does not have thin capitalisation rules provided that the rate of interest charged does not exceed a reasonable rate. This allows international holding companies to be fully financed through debt. Accordingly a company with a nominal share capital is in a position to fund its operations by unlimited borrowings and the interest on those borrowings is fully deductible. Transfer Pricing Among the key attractions for Ireland as a location for investment by multi national corporations is the fact that there is no transfer pricing regime here. The aim of transfer pricing rules is to prevent income from being artificially shifted from a country with a high corporation tax rate to a lower tax jurisdiction. The income is moved to the low tax jurisdiction by having a related company in the low tax jurisdiction supply goods or services to a related company in the high tax jurisdiction at artificially inflated prices. The effect of transfer pricing rules is to deem the transaction to have occurred at fair market value consideration so as to remove the tax benefit achieved through the use of artificially high transfer prices. Interest Deduction It is possible to get a deduction for interest incurred on borrowings which are used to invest in trading operations, or holding companies of trading operations, both in Ireland and overseas. The interest relief is granted on a paid basis against a company's total profits. Interest will be treated as a distribution and not deductible for tax purposes under Irish tax legislation where;        It is paid outside the EU to non-resident parent companies, or        To non-resident companies where there is 75% common control        However, the interest will be deductible in most situations where it is paid to a company resident in a tax treaty country.        Transfer of Residence It is possible in certain limited circumstances for a company to remain incorporated in Ireland, but to have its residence transferred offshore. However, this can only apply where: The company, or a related company, carries on a trade in Ireland and either the company is ultimately controlled by persons resident in an EU state or in a treaty country or the company or a related company is a quoted company, or The company is not regarded as resident in this state under the terms of a taxation treaty between Ireland and another country.               A company is subject to capital gains tax on the transfer of its residence from Ireland i.e. there is a deemed disposal and acquisition of its assets. The CGT participation exemption may be available to eliminate this liability. An exemption is also available where the company is migrating its residence to a tax-treaty country and various other conditions are satisfied. Capital Duty Capital duty on the issue of share capital was abolished with affect from 7th December 2005. Stamp Duty Stamp duty on the transfer of intellectual property (previously taxed at a rate of 9%) was abolished in Finance ACT 2004. Intellectual property includes any patent, trademark,copyright, domain name, design right etc.                                               Byrne & McCall, Core B, Block 71, The Plaza, Park West, Dublin 12, Ireland   Tel: +353-1-6120580   Fax:+353-1- 6205625   Email: info@byrnemccall.ie Privacy Policy          powered by go2web