Tax Figures
Corporate Income Tax
Equal to 12.5% on taxable profits, if the company is investing in R&D activities the rate can be reduced to 6.5%.
Income Tax Rate
- 0-€33,800: 20%
- 0-€37,800: 20%
- 0-€42,800: 20%
- Earned income remainder: 40%
The €42,800 amount may, for married couples, be increased by the lesser of: €24,800 or the income of the second spouse. This brings the total maximum standard rate band for a married couple to €67,600, twice the single person’s band. The increase is not transferable between spouses.
Nearly all income is liable to tax. Tax on income that someone earns from employment is deducted from his/her wages by his/her employer on behalf of the Irish Government. This is known as Pay As You Earn (PAYE). The amount of tax that must be paid depends on the amount of the income that you earn and on your personal circumstances.
The Universal Social Charge (USC) is a tax on income. It is charged on gross income before any pension contributions or PRSI. People cannot use tax credits or tax relief (except for certain capital allowances) to reduce the amount they must pay.
Sales Tax
VAT: 23%
Withholding Tax
- Tax on interests: 20%;
- Royalties: 20%
Other Tax
- Capital gains: 33%;
- Environmental Tax: Euro 75 per tonne of waste;
- Stamp Duty (Insurance Contracts): 3% on the insurance premium;
- Tax on Check Transactions: 50c per check;
Time to prepare and Pay Taxes
82 hours
Employers Social Security and statutory contributions
Class A (Majority of employed persons)
- €38 – €352 inclusive per week = 8.5%;
- €352.01 – €356 per week = 8.5%;
- €356.01 per week or more à 10.75%;
Class S (Self-employed people, including certain company directors) = N/A
Employees Social Security and statutory contributions
Class A (Majority of employed persons)
- €38 – €352 inclusive per week = Nil
- €352.01 – €356 per week = 4%;
- €356.01 per week or more = 4%;
Class S (Self-employed people, including certain company directors) = 4% (Employee)
Payroll
Although it is now possible for companies investing in research and development to avail of a new 6.25 per cent corporation tax rate under a new “knowledge development box”, Ireland made paying taxes more costly and complicated for companies by increasing landfill levies and by requiring additional financial statements to be submitted with the income tax return.
Remote Payroll
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Ireland. Under Irish law, companies registered in other countries are allowed to obtain a license to do business and have employees in Ireland.
Local Payroll Administration
In some cases, a company will register their business in Ireland under one of the forms available: sole trader, partnership and limited liability company but prefer to have another company administering its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Ireland may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Irish payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Irish employment laws.
Currency
The national currency is Euro and its current exchange rate with the USD is 1.09.
