Corporate incentives

Ireland has long been a location of choice for multinationals wishing to establish a holding company as either their EU headquarters, or for the purposes of holding shares in subsidiaries and managing other investments.

Some of the key features of the Irish tax regime that make Ireland an attractive location are as follows:

  • Irish capital gains tax exemption for disposals of qualifying subsidiaries by an Irish holding company. The Irish holding company must hold at least 5% of the subsidiary, which must be resident in an EU or treaty jurisdiction (such as the US, UK and China) and pass a trading test
  • A 12.5% rate for dividends sourced from trading activities. A generous system of foreign tax credits (including onshore pooling) can further reduce or eliminate any Irish tax
  • Domestic exemptions from Irish withholding taxes on payments of dividends, interest and royalties to persons resident in tax treaty partner countries (and additionally, in the case of dividend payments, to companies controlled by persons resident in tax treaty partner countries)
  • Tax relief for interest on qualifying debt to fund qualifying share acquisitions or to fund connected companies
  • No specific thin capitalisation rules. An Irish holding company may consequently be financed largely by way of debt
  • An extensive double taxation treaty network with treaties signed with 72 countries to date, including all EU member states as well as Australia, Canada, China, India, Japan, Russia and the United States
  • A tax deduction in respect of capital expenditure incurred on most forms of intellectual property
  • An R&D tax credit for 25% of qualifying expenditure
  • No capital duty on the issue of shares. A stamp duty exemption on the transfer of intellectual property
  • A 6.25% tax rate to profits earned from patented inventions and copyrighted software, to the extent it relates to R&D undertaken by the company

For the full range of corporate incentives and grants, including specific detail on the R&D credits and the exploitation of intellectual property download your free guide to investing in Ireland