Taxation in Ireland: rules and features

Rates of various business taxes in Ireland. Corporation Tax: Ireland taxes resident companies on their global earnings. Non-resident firms are subject to tax on profits derived from sources in that country. 12.5% is the regular corporate tax rate.

Value Added Tax: Although VAT is charged at the normal rate of 23%, there are products and services that are subject to lower VAT rates of 13.5%, 9% and 0%.

Customs duty rates: vary from 0% to 14%.

Tax benefits for start-up companies. There is currently an incentive for those planning to set up a start-up in Ireland in the form of a 3-year tax exemption on profits and capital gains. Qualifying companies are fully exempt from corporation tax on trading profits and taxable profits on the sale of assets. At the current rate of 12.5%, this corresponds to 320,000 euros in annual profit.

Innovative tax incentives. The Innovation Tax Credit or R&D (Research and Development) Tax Credit is designed to encourage foreign investment in Ireland in various fields of science and technology. These typically include software development, engineering, medical devices, pharmaceuticals, and agriculture.

The R&D tax credit works by providing companies subject to Irish corporation tax with up to 25% of their qualifying R&D expenditure in cash or as a tax credit. It can also be used to reduce a company’s corporation tax liability.

Access to knowledge. Knowledge Transfer Ireland (KTI) is a national office that helps businesses access a wide range of Irish talent by facilitating connections with the local research base. The research base consists of universities, institutes of technology and research centers.