IRELAND Law and Practice Contributed by: Andrew Quinn, David Burke, William Fogarty and Lynn Cramer, Maples Group
outside of Ireland) and profits of certain trades, such as dealing in or developing land and mineral exploration activities. • A 15% rate was introduced in the Finance Act (No 2) 2023 pursuant to the implementation of the OECD Pillar Two rules in Ireland and applies by way of top-up taxes on Irish companies that are part of a multinational group with an annual turno - ver exceeding EUR750 million. Separately, a 33% rate applies to capital gains. The same capital gains tax rate also applies to gains earned by individuals directly or through transparent entities. Personal income is subject to tax at rates of up to 55%. Corporation tax is imposed on the profits of a com - pany (including both income and chargeable gains), wherever they arise, for the fiscal year or “accounting period” of the company. For tax calculation purposes, the accounting period cannot exceed 12 months. The starting point for determining taxable profits is the profit of the company according to its statutory accounts, subject to any adjustments required by law. The more important items that are not deduct - ible when calculating the tax-adjusted profits include the following: • any capital expenses; • any expenses not wholly or exclusively incurred for the purposes of the trade or profession; • general provisions for bad debts (specific bad debts and specific bad debt provisions are deduct - ible); • dividends or other distributions paid or payable by the company; and • certain specific expenses, including business entertainment costs, interest on late payment of taxes, general provisions for repairs and certain motor leasing expenses. 2. Corporate Tax Regime 2.1 Taxable Profits
A tax deduction is not available for accounting depre - ciation. However, capital allowances (ie, tax depre - ciation) are available in relation to qualifying capital expenditure on land and buildings, plant and machin - ery and certain intellectual property. Chargeable gains that do not form part of the trading profits are calculated in accordance with capital gains tax rules. 2.2 Technology Investments R&D Tax Credit A 35% tax credit for qualifying research and devel - opment (R&D) expenditure exists for companies engaged in qualifying in-house R&D undertaken within the European Economic Area (EEA). The credit also extends to certain outsourced R&D expenditure, including payments to unconnected third-party con - tractors and higher education institutions, subject to a cap of the greater of 15% of the company’s own qualifying R&D activities or EUR100,000. This credit may be set against a company’s corporation tax liabil - ity, and is available on a group basis in the case of group companies. The first portion of a claim on R&D expenditure has also been increased to EUR87,500, which is payable in full in cash. A new simplification measure allows 100% of an employee’s emoluments as qualifying expenditure where at least 95% of time is on qualifying R&D. Qualifying R&D activities must satisfy certain condi - tions and, in particular, must seek to achieve scientific or technological advancement and involve the resolu - tion of scientific or technological uncertainty. Where a company has insufficient corporation tax against which to claim the R&D tax credit in a given account - ing period, the tax credit may be credited against cor - poration tax for the preceding period, may be carried forward indefinitely or, if the company is a member of a group, may be allocated to other group members. For accounting periods ending on or after 1 Janu - ary 2023, the R&D tax credit may now be paid out to all claimants, regardless of the corporation tax posi - tion, in three instalments over three years. Companies with R&D tax credit claims of more than EUR50,000 will receive the three refunds over three years in a 50%/30%/20% split.
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