All companies resident in the State and all non resident companies which carry on a trade in the State through a branch or agency, subject to specific exceptions, are liable to corporation tax. The following rates apply:
Standard rate on Trading Income 12.5%
Passive income - Investment/Rental Income 25%
Special rate for dealing in residential land 20%
12.5 % Rate To qualify for the 12.5% rate on trading income a company must be able to demonstrate that it has substance in Ireland and is carrying on an economic activity here. It is important that the company is not just a brass plate operation but can show a physical presence in Ireland and have employees engaged here.
Where an Irish company carries on a trade partly in Ireland and partly abroad the trading profits will normally be taxed at the 12.5% rate. Where an Irish company carries on a trade wholly outside of Ireland then the profits will be taxed at the 25% rate.
25% Rate The 25% rate applies to investment income, rental income and income from the following excepted trades:
Dealing in land which has not been fully developed (other than residential land), but not any part of such trades which consists of construction operations.
Working minerals, and
Petroleum activities whether exploration, extraction activities or acquisition, or exploitation of petroleum rights.
20% Rate A special corporation tax rate of 20% applies to profits made from dealing in residential development land.
Byrne & McCall, Core B, Block 71, The Plaza, Park West, Dublin 12, IrelandTel: +353-1-6120580Fax:+353-1- 6205625Email:info@byrnemccall.ie
