CORPORATE TAXES
GENERAL NOTE
The information in this entry is current as of January 1998. For subsequent developments consult the contact listed above.
TAXES ON CORPORATE INCOME
Corporation tax/Corporation tax is chargeable as follows.
%
April 1,1997 to December 31,1997……………………… 36
Profits arising after December 31,1997……………… 32
The first IR￡50,000 of profits is charged to corporation tax at 25% (28% for the period from April 1,1997 to December 31,1997).
A rate of 10% applies on certain manufacturing activities (see "Tax incentives" below). The lrish corporation tax rate will be reduced at an average rate of 4% each year until it reaches the rate of 12.5% on January 1,2003, from which date that will remain the standard rate applicable to active income. A rate of 25% will apply to passive income.
Closely held companies are liable to a 20% surcharge on after-tax investment and rental income that is not distributed within 18 months of the end of the accounting period. The surcharge that applies to the undistributed income from trading or professional activities of close companies is reduced to 15% with effect from April 1,1996.
A corporation tax at the rate of 25% is levied in respect of profits from certain petroleum licenses.
Advance corporation tax/An lrish resident company that pays a dividend or interest on certain types of loans must pay advance corporation tax (ACT) equal to the amount of the tax credit attaching to the payment. The normal tax credit for payments made on or after December 3,1997 is 11/89 (21/79
for the period from April 6,1997 to December 3,1997) of the payment. The normal fraction is reduced in the case of companies qualifying for export sales relief or the 10% rate of tax for manufacturing companies and certain deemed manufacturing activities and IFSC services. The company's
corporation tax liability will be reduced by the amount of ACT paid.
ACT is not payable on dividends to 75% foreign parents located in countries with which lreland has a tax treaty or on interest payable to a 75% foreign-associated company.
ACT and tax credits are beign abolished on all dividends paid after April 5,1999.
CORPORATE RESIDENCE
Corporate residence is determined by reference to the location of the central management and control of the company.
OTHER TAXES
Value-added tax/The rates and the main categories to which they apply are as follows.
%
Exported goods, fertilizers, books, food and medicine, children's
clothing and children's footwear…………………………………… 0.0
Livestock and greyhounds…………………………………… 3.6
Supply of electricity; fuels (other than motor fuels); sale of developmentproperty, newspapers, certain building materials, hotel accommodation,and certain tourist-related services; meals supplied in hotels, restaurants
and similar establishments; admission to cinema and certain theatricaland musical performances; services supplied by veterinary surgeons;certain agricultural services; admissions to art exhibitons; waste disposal;
repair and maintenance of movable goods, photographic and similar
services; driving instruction…………………………………… 12.5
Goods and services not subject to one of the other rates……………21.0
Exemptions include the following.
1.Specified financial services and insurance.
2.Letting of property, with certain exceptions.
3.Transport of passengers.
4.Funeral undertaking.
5.Medical, hospital and most educational services.
6.Admission to certain theatrical performances.
Local taxes/Rates are imposed on the owners or occupiers of certain land and buildings. They are based on the square meter area of buildings. Rates are an allowable d
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