IRELAND Law and Practice Contributed by: Philip Tully, Emma Doherty, Alice Duffy, Simon Shinkwin and Marie McGinley, Matheson LLP
The amount of PRSI paid by an employee depends on the employee’s income and the PRSI class of the employee. The most common PRSI class for private sec - tor employees in Ireland is Class A (employees in industrial, commercial and service-type employment with gross earnings of EUR38 or more in a week). A Class A employee’s PRSI contribution will gener - ally be 4.2% of all “reckonable earnings” (including employee share-based remuneration and any benefit in kind). The employer must separately make a PRSI contribution of 9% on weekly earnings up to EUR552 and 11.25% on weekly earnings over EUR552. From 1 October 2026, the rate of PRSI for a Class A employee will increase to 4.35% and for an employer to 9.15% on weekly earnings up to EUR552 and 11.40% on weekly earnings over EUR552. USC Employees in Ireland are also subject to a further tax payable on total income, known as USC. For 2025, the first EUR12,012 of an individual’s aggregate annual income will be taxed at a rate of 0.5%, the follow - ing EUR16,688 at 2%, the following EUR41,344 at 3% and the remaining balance at 8%. An additional surcharge of 3% applies to individuals who are self- employed or whose non-employment-related income exceeds EUR100,000 in a year. 5.2 Taxes Applicable to Businesses The primary Irish taxes applicable to businesses are corporation tax on income and chargeable gains, VAT, withholding tax and stamp duty. Corporation Tax A company resident in Ireland for Irish tax purposes will be subject to corporation tax on its worldwide profits and gains regardless of where those profits arise. A company that is not tax resident in Ireland is liable to corporation tax in Ireland if it carries on a trade in Ireland through a branch or agency. A non-Irish tax resident company may be subject to corporation tax on gains realised on the disposal of Irish-situated assets used for such a trade carried on in Ireland or realised on the disposal of certain speci - fied Irish assets, including Irish land or buildings or
shares in a company that derive the greater part of their value from Irish land or buildings. Where a non- Irish tax resident entity sells Irish patent rights in return for a capital sum, a charge to Irish tax at a rate of 25% can also arise. A company will generally be con - sidered tax resident in Ireland if it is incorporated in Ireland or centrally managed and controlled in Ireland, regardless of where it is incorporated. The rate of corporation tax payable on a company’s profits will depend on whether the profits arise from trading (broadly, operational activities) or non-trading (eg, passive investment) activities. A low rate of 12.5% applies to trading profits, with a 25% rate applying to non-trading income. Losses incurred by a com - pany in respect of trading operations can generally be carried forward indefinitely for use against future profits of that trade. Losses can also be surrendered to other companies within a group for Irish corporation tax purposes. OECD Pillar Two Minimum Tax Ireland has implemented the OECD’s Two-Pillar solu - tion to address the tax challenges arising from the digitalisation of the economy in line with the EU Imple - menting Directive. The Directive obliged EU member states, including Ireland, to introduce a minimum tax rate of 15% for multinationals with annual revenue over EUR750 million. Ireland introduced its legislation in Finance (No 2) Act 2023 and it came into force on 31 December 2023. The existing 12.5% corporation tax rate continues to apply to multinationals and domestic businesses operating in Ireland that do not exceed the EUR750 million group revenue threshold. Chargeable Gains Chargeable gains realised by an Irish tax resident company on the disposal of a capital asset are gen - erally subject to corporation tax at an effective rate of 33%, where relief or exemptions are not available. A non-Irish resident company will be subject to corpora - tion tax in a similar manner on gains realised on the disposal of specified Irish assets (broadly, Irish branch assets and Irish land and buildings, Irish minerals and exploration rights, or shares deriving their value from such assets or Irish branch assets).
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