Ireland

Country Name: Ireland
Currency: Euro (EUR, €)
Primary Tax Authority: Office of the Revenue Commissioners (Revenue)

Key Legislation:

Irish Constitution (Bunreacht na hÉireann) 1937: Establishes the legislative powers for taxation in Ireland.
Taxes Consolidation Act 1997 (TCA): Comprehensive legislation covering income tax, corporation tax, capital gains tax, and other taxes.
Value-Added Tax Act 1972: Governs the operation of VAT in Ireland.
Finance Act: Updated annually to incorporate tax policy changes.

Ireland operates under a unitary tax system where taxation is centralized at the national level.
Taxes Collected by Central Authorities:

Standard CIT Rate: 12.5% for trading income from activities conducted in Ireland.
Non-Trading Income Rate: 25% for passive income, such as investment or rental income.
Research & Development Tax Credit: Provides a 25% tax credit on qualifying R&D expenditure.
Capital Allowances: Available for the cost of certain assets, including plant, machinery, and intellectual property.
Holding Company Regime: Exempts capital gains on the sale of qualifying shares in subsidiaries.
CFC Rules: Controlled Foreign Company (CFC) rules aim to prevent profit shifting by taxing undistributed income of foreign subsidiaries.
Capital Gains Tax (CGT): Applies at a 33% rate on the disposal of assets, though exemptions exist for certain shares.

Standard VAT Rate: 23%
Reduced Rates: 13.5% for certain goods and services, including construction, tourism, and energy, and 9% for hospitality and newspapers.
Zero-Rated Goods: Includes most food, children’s clothing, and medicines.
VAT Registration Threshold: EUR 37,500 for services and EUR 75,000 for goods.
Filing Frequency: VAT returns are typically filed bi-monthly, though businesses can opt for monthly or annual filings.

Progressive Tax Rates:
- 20% for income up to EUR 40,000 (single individual)
- 40% for income exceeding that amount
USC (Universal Social Charge): Applies on income above EUR 13,000 at rates from 0.5% to 8%.
PRSI (Pay Related Social Insurance): Contributions range from 4% for employees to a maximum of 10.75% for employers, depending on income and employee type.
Tax Residency: Residents are taxed on worldwide income, while non-residents are only taxed on Irish-source income.
Foreign Tax Credit: Available for taxes paid abroad to avoid double taxation.
Capital Gains Tax (CGT): Individuals pay 33% on gains from asset sales, with a EUR 1,270 annual exemption.

Universal Social Charge (USC):

Rates: Progressive from 0.5% to 8% based on income levels.
Exemptions: Income below EUR 13,000 is exempt from USC.
Self-Employed Contribution: Self-employed individuals pay higher rates on higher income bands.

Pay Related Social Insurance (PRSI):

Employee Contribution: 4%
Employer Contribution: Ranges up to 10.75%, depending on employee type.
Pension Contributions: Contributions to occupational or personal pension schemes can receive tax relief, with limits based on age and income.

Dividends: 25% (may be reduced under tax treaties).
Interest: 20% (may be reduced under tax treaties).
Royalties: 20% (may be reduced under tax treaties).
Exemptions: Dividend withholding tax (DWT) exemptions may apply for qualifying foreign recipients, and interest may be exempt under the EU Interest and Royalties Directive.

OECD Guidelines: Ireland follows OECD transfer pricing principles, requiring related-party transactions to be at arm’s length.
Documentation Requirements: Applies to large multinationals, and contemporaneous documentation is required to avoid penalties.
Penalties: Failure to comply can result in significant penalties and adjustments to taxable income.

Knowledge Development Box (KDB): A 6.25% tax rate applies to profits from qualifying intellectual property developed in Ireland.
Section 110 Companies: Allow for tax-efficient structuring of securitization vehicles.
REITs (Real Estate Investment Trusts): Exempt from corporation tax on qualifying property rental income, though shareholders pay tax on dividends.
Film Relief: Tax credits of up to 32% for qualifying film and television production expenditure.

Stamp Duty: Applies on transfers of property and certain financial instruments. The rate on residential property transfers is 1-2%, while the rate on non-residential property is 7.5%.
Capital Acquisitions Tax (CAT): A 33% tax applies to gifts and inheritances over specific thresholds, depending on the relationship between the donor and recipient.
Local Property Tax (LPT): A self-assessed annual tax based on the market value of residential properties, ranging from 0.18% to 0.25%.
Excise Duties: Levied on alcohol, tobacco, and fuel.

Key Partner Countries: Ireland has signed over 70 DTAs, including agreements with the US, UK, Germany, France, and China.
Reduced Withholding Tax Rates: DTAs reduce withholding tax rates on dividends, interest, and royalties.
Treaty Relief Application: Non-residents must apply for treaty relief to benefit from reduced withholding tax rates.

Corporate Tax Filing Deadline: Nine months after the end of the company’s financial year.
PIT Filing Deadline: Individuals must file their tax returns by October 31st for paper filings or by mid-November for online filings.
VAT Filing Requirements: VAT returns are generally filed every two months.
Penalties for Non-Compliance: Penalties include interest on late payments, surcharges for underpayment, and additional penalties for deliberate non-compliance.

Corporation Tax Reform: Ireland has committed to adopting the OECD’s global minimum tax of 15% for large multinationals under the Pillar Two framework, to be implemented by 2023-2024.
R&D Tax Credit Enhancements: The government is reviewing the R&D tax credit regime to make it more accessible to small businesses and start-ups, and to align with international best practices.
Brexit Implications: Ireland has become a key entry point for companies accessing the European market post-Brexit, leading to increased corporate tax registrations and VAT compliance requirements.

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