Advices

ADVICE #63

Paculiarities of the tax system Ireland

Despite the fact that almost all European countries are committed to the unity of laws and integration in the areas of economic and social policies, tax systems of European countries do not differ with unity.

Russian analysts of the consulting company “Texart Group” researched the tax system 38 European countries with developed market economies, and weak, still "wobbly" after the collapse of the socialist states.

Some of the investigated countries are already EU members, others are candidates for membership in the single currency area, but in the meantime, in most States, a United Europe, you may encounter drastic differences in tax systems and the principles of taxation.

If you are going to live abroad and operate your business, you should carefully review the tax code of the country: what size of income tax in this country; the amount of tax "at the source"; VAT; what are the taxes levied on the income of individuals and their property, and more.

We offer to your attention an analytical report with detailed information about the economy, the characteristics of the market, as well as tax rates and the criteria for levying taxes in each country of Europe.

The Irish economy is heavily dependent on trade; developed sectors are agriculture and food industry. In addition, much attention is paid to the development of high-tech sector and infrastructure.

Ireland is a member of the European Union.

The income tax

Residents and permanent establishments of foreign companies are subject to income tax in respect of all their income, regardless of country of origin.

A tax resident of Ireland is a company registered in Ireland (even if such company has its place of effective management abroad).

The profit of the company is divided into several categories and taxed at different rates depending on the belonging to a certain category. At the rate of 12.5% taxable profit of the company associated with the trade activity on the territory of Ireland; at the rate of 25% – income from mining, income from dividends, interest, income from trading activities from sources abroad, as well as income that is not related to trading activities.

Income from capital gains subject to income tax in a General manner, although in some cases the tax on capital gains will be charged separately: this applies to situations involving the alienation of certain types of land and income of non-resident companies from the sale in Ireland of non-trading assets. The tax rate on capital gains is 33%.

In Ireland there is legislation on transfer pricing, in particular, "the arm's length rule" in respect of associated companies.

In Ireland there are no rules regarding the taxation of profit of controlled foreign companies.

Withholding tax

Withholding tax on payments to residents, charged at the standard rate of 20% in respect of dividends, interest and royalties. Not taxable dividends from a resident company to a resident.

Payments of dividends, interest and royalties to non-residents are taxed at 20% (if SODNOM provides for other rate). Tax exempt dividends to the address of a natural person resident in the EU, as well as interest payments to a company resident in the EU.

VAT

The standard rate of tax is 23%, applies to all goods, and services unless otherwise expressly provided by law (Value Added Tax Consolidation Act 2010). Perhaps the use of the reduced rate: 0% in respect of essential commodities, food, supplies of goods within the EU, 4.8% – when you purchase livestock, to 13.5% in respect of transactions of sale of immovable property.

Taxation of incomes of physical persons

The tax to incomes of physical persons shall be paid by residents, as well as persons with permanent residence on the territory of Ireland.

A resident is a person residing in the country for more than 183 days per year or 280 days over two years in a row. In addition, the tax obligation on a par with residents is reserved for persons who had been ordinarily resident in Ireland for three previous years.

Earnings up to 32 800 € is taxed at 20% in respect of income exceeding the threshold is applied rate of 41%. In respect of persons who have minor or disabled children, this threshold is 36 800 €.

Irish legislation does not contain a definition of interest payments. Under the interest refers to the periodic payments for the use of funds. Interest payments on Bank deposits and long-term loans paid by a resident company are taxed at source at the rate of 41% and eliminate the tax responsibility of the recipient.

Payments for royalties and dividends are subject to withholding tax at the rate of 20%.

The real estate tax of individuals

Property tax is local: it is calculated as a percentage of the nominal value of immovable property owned by individuals.

Since 2013 is a new Local Property Tax, the rate of which is equal to 0.18% for properties valued up to € 1 million, and 0.25% in respect of real property which value exceeds this value.

The text prepared by the Russian consulting company TaxArt Group LLC specifically for Banki.ru

Ирландия

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