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Irish Corporate Tax and VAT Rates

Taxation of Irish Companies

The Irish tax system is highly developed but relatively straightforward and efficient compared with many of its West European counter-parts and in particular benefits from one of Europe’s most competitive corporate tax rates of only 12.5% for trading companies.

Basic Facts: In synopsis, the corporate tax rate in the Republic of Ireland is as follows:

Standard Company Rates of Tax

12.5 % for all trading companies

25% for investment and/or rental income

Capital Gains Tax

The rate of capital gains tax for individuals and trusts is 33%. (Effective for disposals made on or after 6 December 2012) with additional discounts available to entrepreneurs who re-invest their investment income back into a business.

Rate Notes Examples
23.0% This standard rate applies to all supplies not chargeable at other rates. Cars, telephone services, soft drinks, alcohol, computers and software products and consultancy services.
13½% With effect from 1 March 2012, the rate of VAT that will apply to the supply of district heating will be reduced from the standard rate to the rate of 13.5%. Heating fuel, electricity, restaurant services, newspapers, hotel and bed and breakfast lettings and property
9% For the Hospitality sector including hotels and restaurants
0% Exports, certain food and drink, certain medicines, book and children's clothing
4.8%   "Flat Rate Addition" 5.2% Examples - Livestock, live greyhounds, hire of horses and the "Flat Rate Addition".
VAT Exempt Services Examples - Financial, insurance, educational, training, medical, optical, and dental and passenger transport services.

Other Taxes

Apart from corporation tax, VAT and social welfare contributions, the only other major outgoings to be faced by an Irish undertaking would be commercial rates which are generally much less than in the UK and under the direct control of the appropriate local authorities.

For more information on Irish Company Formation services, please speak to a tax planning consultant