Ireland is a country that many people like to do business in. The corporate tax rates are rather low in Ireland, and it’s a great place to do business when you want things to be easy. Read on to take a look at Irish business tax. This will ensure that you understand everything that you need to know.
Understanding Corporate and Business Tax
It’s going to be important to understand how corporate and business tax works in Ireland. You’ll find that company residents in Ireland will pay the low Irish tax rate on both worldwide profits and Irish profits. Ireland charges 12.5% on worldwide trading income, and this is considered to be very good. This is only the case when the company is considered a tax resident of Ireland, though.
Companies are able to get many tax breaks that make things even better. The normal rate winds up being closer to 6.5% once incentives and tax breaks are taken into account. However, there are excepted trades such as petroleum activities and non-trading income that are taxed at a higher rate. Such activities will be taxed at 25%.
Ireland Has Many Tax Incentives
There are many tax incentives in Ireland that will help to make it a desirable place to do business. As mentioned above, the tax incentives help to push the corporate tax rate even lower. For example, research and development costs can help companies with a 25% tax credit. This can greatly offset the cost of corporate taxes.
This special research and development tax credit is available to corporate residents of Ireland. If you’re looking for a good corporate home for your business, then Ireland should be considered. The tax incentives and low rates make it one of the best destinations for many corporations. Even pension contributions to employees are going to be deductible.
It can be a good way to reduce the corporate tax burden while giving employees a benefit. This has the potential to help attract sought-after employees. Ireland has no statutory obligation that makes employers have to pay pension contributions for employees. It’s just normal for companies to contribute between 5% and 10% of the employee’s yearly salary to the pension fund.