The operation of the Regional Film Development Uplift at the 5% rate is extended to the end of 2021. The tapering of the Uplift rate will commence in 2022, reducing at first to 3%.
The KDB is extended to 1 January 2023 for qualifying companies.
For specified intangible assets, a balancing charge, or clawback of capital allowances made, does not currently arise where a balancing event occurs more than five years after the beginning of the accounting period of the company in which the asset was first provided.
With effect from 14 October 2020, balancing charges may now arise in respect of specified intangible assets acquired on or after 14 October 2020 regardless of when a balancing event occurs.
Emissions-based limits on capital allowances and expenses for certain road vehicles The Minister is reducing the amount of expenditure that can qualify for tax relief for certain categories of commercial vehicles. This provision will apply from 1 January 2021.
Corporation Tax is charged on all profits (income and gains), wherever arising, of companies resident in the State, with some exceptions, and non-resident companies who trade in the State through a branch or agency.
Companies pay Corporation Tax. This tax is charged on the company's profits which include both income and chargeable gains. A company's income for tax purposes is calculated in accordance with Income Tax rules. Chargeable gains are calculated in accordance with Capital Gains Tax rules.
There are two rates of Corporation Tax:
Your own individual circumstances will dictate whether you should operate as a limited company or as a sole trader. In addition to the taxation issues you need to consider there are various other practical and legal matters which should be taken into account when setting up a company and on which you should seek professional advice.
All profits (income and gains), wherever arising, of the companies.
Corporation Tax is assessed on the profits of a company's accounting period at the relevant Corporation Tax rate in force during the accounting period.
Where the rate of Corporation Tax changes during an accounting period, the profits of that period are apportioned on a time basis and taxed at the appropriate rate for the purpose.
An accounting period for tax purposes is a period of not more than twelve months and is normally the period for which the company makes up its annual accounts.
Capital gains, other than gains from development land, are included in a company's profits for Corporation Tax purposes and are charged to tax under a formula that means in effect that tax is paid at the prevailing capital gains tax rate.
A company resident in the state is liable to Corporation Tax on its worldwide profits, not just its Irish source profits. Whether or not these profits are brought into Ireland is irrelevant for this purpose.
The term 'residence' was not, until recently, defined in law. The general rule was that companies, whose 'central management and control' was exercised in the State, were treated as resident here. This rule or test emerged as a result of judicial decisions set down in case law. Factors to be taken into account in establishing where the company's central management and control lie include, for example, where the important questions of company policy are determined, where the majority of directors reside, where the negotiation of major contracts is undertaken and where the company's head office is located.
The Self-Assessment system 'Pay & File' applies to companies. The obligations of a company with regard to paying Corporation Tax and filing its return are as follows:
Compute and pay its preliminary tax liability by the specified date.
Complete and file, on line, a Form CT1 and where applicable a Form 46G
Pay any balance of tax due when lodging the return i.e. within nine months of the end of the accounting period. (The specified return date and payment due date is the 21st day of the applicable month. This date is extended to the 23rd of the applicable month for companies who file their return and pay any associated tax due via Revenue’s Online Service.
A company is obliged to pay to the Collector General, via ROS, the amount of preliminary tax appropriate to the accounting period.
The total amount of preliminary tax paid must be equal to or greater than 90% of the company's final liability for the accounting period.
Special provision is made for small companies whose liability does not exceed €200,000.
Expenditure which is wholly and exclusively laid out for the purposes of a company's trade or profession in a three year period before commencement is allowed as a deduction in calculating the profits of the company following commencement.
|Standard Rate on Trading Income||12.5% from 1 January 2003|
Finance Bill 2014 will amend Ireland's company tax residence rules to provide that all companies that are incorporated in Ireland will be tax resident here, unless regarded as resident in a territory other than the State for the purposes of a tax treaty. The change will come into effect for new companies from 1 January 2015 while a transition period will apply until the end of 2020 for existing companies. This change will bring Ireland's rules into line with the rest of the OECD.
A company may claim capital allowances for capital expenditure incurred on specified intangible assets against the income from ‘relevant activities’ of a company. Examples of specified intangible assets include patents, copyrights, trademarks and know-how.
Alternatively, a company may elect to claim capital allowances over a fixed write-down period of 15 years at:
Finance Act 2017 introduced a cap on the amount of relief that may be claimed in an accounting period. This cap applies to claims in respect of capital expenditure on specified intangible assets on or after 11 October 2017. The level of deduction cannot exceed 80% of the trading income of the relevant trade for the accounting period.
This is a measure to incentivise companies to invest in energy-efficient equipment. It allows them to deduct 100% of capital expenditure incurred on eligible equipment (that meets specified energy-efficiency criteria) from trading profits in the year of purchase rather than over the usual 8 year period for plant and machinery. This scheme for energy efficient equipment is extended for a further three years, until 31 December 2023.
With effect from 6 December 2007 a small company is a company with a corporation tax liability of less than €200,000 in the preceding year. Preliminary tax of at least 90% of the liability for the period or 100% of previous year's liability is due 31 days before the end of their accounting period, and before the 23rd of that month. New or start up companies with a Corporation Tax liability of less than €200,000 in their first accounting period will not be required to pay Preliminary Corporation tax. The liability is paid when the return is filed.
The scheme which provides relief from corporation tax on the trading income and certain gains of new start-up companies in the This scheme provides relief from corporation tax on trading income (and certain capital gains) for new start-up companies in the first 3 years of trading.
This scheme is being enhanced to allow any unused relief arising in the first 3 years of trading due to insufficiency of profits to be carried forward for use in subsequent years. This is subject to the maximum amount of relief in any one year not exceeding the eligible amount of Employers' PRSI in that year.
The R&D Tax Credit regime provides for a 30% tax credit for incremental expenditure on certain research and development (R&D) activities. For accounting periods beginning on or after 1 January 2015, the requirement to subtract base-year (2003) R&D expenditure has been removed and all qualifying R&D expenditure will be eligible for the 30% tax credit.
The limit on the amount of qualifying research and development expenditure that can be outsourced to another company is also being increased from 5% to 15%.
Whilst every effort has been made to ensure the accuracy and reliability of the information published within this website, you choose to use this information and rely on any results at your own risk. We will not under any circumstances accept responsibility or liability for any losses that may arise from a decision that you may make from the use of, or reliance on this information.