IRELAND Law and Practice Contributed by: Andrew Quinn, David Burke, William Fogarty and Lynn Cramer, Maples Group
Maples Group 75 St. Stephen’s Green Dublin 2 D02 PR50 Ireland
Tel: +353 1 619 2000 Fax: +353 1 619 2001 Email: andrew.quinn@maples.com Web: www.maples.com
1. Corporate Structures, Residence and Tax Treatment 1.1 Corporate Forms and Their Tax Treatment The Companies Act 2014 provides for the following forms of incorporated entity: • private company limited by shares (LTD); • designated activity company (DAC); • public limited company (PLC); • company limited by guarantee (CLG); • unlimited company; and • investment company. Most often, businesses gravitate towards the LTD model due to its familiarity and simplicity. However, DACs and Irish Collective Asset Management Vehicles (ICAVs) are utilised by companies involved in the issu - ance of listed debt securities and investment funds respectively. Entities with separate corporate legal form are taxed separately. 1.2 Use and Taxation of Transparent Business Structures In Ireland, partnerships and limited partnerships are treated as transparent for tax purposes. Partnerships are generally used for investment pur - poses and also by certain professional services firms (eg, accountants and solicitors). In addition, pension funds may make use of a particular form of tax trans -
parent investment fund called a common contractual fund (CCF). 1.3 Tests for Determining Tax Residence A company that has its central management and con - trol in Ireland is considered resident in Ireland, regard - less of where it is incorporated. A company that is incorporated in Ireland is considered resident in Ire - land, except where the company is regarded as not being resident in Ireland under a double taxation treaty between Ireland and another country. The term “central management and control” is, in broad terms, directed at the highest level of control of the company. The Irish Revenue Commissioners (“Irish Revenue”) and the Irish courts emphasise the location of the meetings of the board of directors. 1.4 Applicable Corporate and Individual Tax Rates Ireland currently has three rates of corporation tax. • A 12.5% rate applies to the trading income of a company that carries on a trade in Ireland (includ - ing certain qualifying foreign dividends paid out of trading profits). There is no precise definition of what constitutes trade for this purpose but, broadly, a company should be considered to be trading for tax purposes if it is carrying on an active business in Ireland on a regular or habitual basis and with a view to realising a profit. • A 25% rate applies in respect of passive or invest - ment income, profits arising from a possession out - side of Ireland (ie, foreign trade carried on wholly
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