Tax Advantages of Locating a Company in Ireland


Ireland has various advantages for international companies locating here.

Tax Rate

The corporation tax rate on trading income is 12.5%. The corporation tax rate on passive or investment income is 25%.

Research and development

Incremental research and development expenditure qualifies for a tax credit of 25% in addition to the normal deduction for research and development expenditure in the profit and loss account of the company.

Dividend withholding tax

An exemption from dividend withholding tax (at 20%) can be claimed by an Irish company in respect of dividend payments to certain types of shareholder including:

  • Irish tax resident companies.
  • Companies resident in the EU or tax treaty countries not under the control of Irish residents.
  • Individuals resident in the EU or tax treaty countries.
  • Non resident companies ultimately controlled by residents of EU member states or tax treaty countries.

Tax credits

An excess tax credit arising in respect of a foreign dividend can be set against corporation tax arising on other foreign dividends. Surplus tax credits may also be carried forward to be set against corporation tax on foreign dividends paid to the Irish company in future years.


Capital gains tax exemption

Ireland is an excellent holding company location. Irish tax legislation provides for an exemption from capital gains tax for Irish tax resident companies which make disposals from substantial shareholdings (at least 5%) in trading subsidiaries tax resident in an EU or tax treaty country (including Ireland) and a trading company or a member of a “trading group”.


Related Article:           12 Tax Planning Ideas for Companies

Please call Noel Murphy today on 021-4310266 if you need further information on tax advantages of locating a company in Ireland or a free consultation.