Do You Know How Easy It Is To Set Up A Company In Ireland?
Did you know that You Can Pay 0% Corporation Tax For The Next 3 Years?
Read On To See How This Affects You...
3 Years Tax Exemption For New Start Up Companies In Ireland
Open a Company In Ireland.
America and Ireland have enjoyed long economic and cultural similarities but if there’s ever been a time to open a company in Ireland it’s now. Due to the global financial crisis new legislation has been introduced to help stimulate business and now is the time to take advantage of it. The Taxes Consolidation Act has been introduced (Section 486C) to promote and encourage new business activity in the traded sector of the Irish economy. The relief provides for an exemption from corporation tax which is currently at 12.5% for the first three years of operation. So You Pay 0%....Yes 0%! This is a fantastic opportunity for start up business's right through to large corporate companies.
You can take advantage of the 3 Year Exemption if...
- You are a new company (incorporated in Ireland or another EEA State) since 14th October 2008
- You are a company which has started a qualifying trade in 2009 or 2010
- You are a company whose corporation tax liabilities do not exceed certain levels
How start up company relief is calculated...
If you open a company in Ireland full relief is available for any of its first three years of operation where its total corporation tax liability for a 12 month accounting period does not exceed €40,000. So any qualifying new company with a corporation tax liability up to this amount will have its corporation tax liability reduced to nil.
In effect this means that a company can have a taxable profit of €320,000 per annum (320K x 12.5% = 40K) reduced to zero.
Even if the corporation tax charge is between €40,000 and €60,000 then relief will apply.
Revenue Considerations when opening a company in Ireland...
This relief qualifies under EU de minimis aid regulations and Revenue may disclose information on the tax relief claimed under Section 486 to government department and agencies paying other de minimis aid and, if requested, to the EU commission.
Claims for start up company relief are made as parts of the normal self assessment basis of tax are made under panel 9 of the annual corporation tax return form.
However you must commence a qualifying trade. A qualifying trade does not include:
A trade previously carried on by another person. The trade must be a new business and not the transfer of an existing business or part of a business from a sole trader or previous company
- A trade previously carried on by another person. The trade must be a new business and not the transfer of an existing business or part of a business from a sole trader or previous company
- An excepted trade (subject to 25% tax). Profits from non trading activities such as rental and investment income are taxed at 25% and do not qualify for the relief
- A trade carried on entirely outside Ireland and whose profits are subsequently taxed at 25%. An Irish incorporated company must be managed and controlled in Ireland and have “substance” in Ireland in order to qualify for the 12.5% corporation tax rate and in turn the exemption as outlined in this article
- A trade dealing in or developing land or exploration and extraction of natural resources
- A trade of a “service company” that would be subject to a professional companies profits surcharge as per S441 TCA. Effectively, the “service companies” that do not qualify for this tax relief include close companies (5 or fewer shareholders/ directors) whose businesses consist of the carrying on of a profession or the provision of professional services, or of exercising an office or employment. These “service companies” also include businesses that provide services to professionals
- A trade in the fishery or aquaculture sectors
- A trade active in the primary production of agricultural products
- A trade active in the coal sector
This is a fantastic opportunity for anyone who’s been thinking of or planning to start a company in Ireland. Not only that but by starting up a company in Ireland you can have a foothold into Europe in a country that you are familiar with and that speaks your language.
For further information on exactly how this can impact you, just decide how you want to contact us and we'll answer any questions you have.
