Tax rates in Ireland

Company Tax

12.5%

Tax Rate For Foreign Companies

A company that resides in Ireland for tax purposes is subject to corporate taxes on its global income. Non-resident companies are subject to corporate income tax only on their Irish-source income.
With some exceptions, a company that is incorporated in Ireland is automatically considered to be an Irish tax resident. A company is also considered to be an Irish tax resident if it is managed and controlled in Ireland.

Irish branches of foreign companies are subject to corporation tax at the same rates as Irish resident companies. There is no withholding tax on the repatriation of branch profits to the head office.

Capital Gains Taxation

Companies in Ireland must pay capital gains tax (CGT) on profits from selling capital assets. The taxable gain is calculated by deducting the acquisition cost, adjusted for inflation up to December 31, 2002, from the sales proceeds. The CGT rate is 33%. For offshore funds and foreign life assurance policies, no indexation relief applies; non-corporate shareholders pay 33% CGT for EU/EEA/DTT countries, and 33% or 40% for other jurisdictions. Irish corporate shareholders in Irish funds pay a reduced 25% exit tax. Special rules apply for gains from Irish development land.
Irish tax-resident companies are taxed on worldwide gains, while non-resident companies are taxed on gains from disposing of Irish land, buildings, mineral rights, and related shares, as well as assets used in Irish businesses.
Capital losses can offset gains within the same period or be carried forward to future gains, but cannot be carried back or offset against business income, nor can they be shared within a tax group.
Irish transfer pricing rules apply to capital transactions over EUR 25 million, but certain intra-group transfers may be exempt from CGT and transfer pricing rules.

Irish resident companies can avail of a participation exemption on the disposal of a shareholding interest if:

- At least 5% of the shares, including rights to profits and assets on winding up, are held for a continuous 12-month period.
- The shares are held for 12 months within the disposal date or for 12 months ending within the 24 months before disposal.
- The company whose shares are sold is resident in an EU member state or a country with a double tax treaty (DTT) with Ireland at the time of disposal.
- At disposal, either the company's business mainly involves trading, or the combined businesses of the Irish holding company and its direct or indirect 5%+ subsidiaries mainly involve trading.

If the Irish holding company doesn't meet the minimum holding requirement but is part of a group (a parent company and its 51% worldwide subsidiaries), the exemption can still apply if other group members' holdings meet the requirement. This means the exemption can apply even without a significant direct shareholding. The exemption also covers disposals of assets related to shares, like options and convertible debt, but excludes shares or related assets primarily valued from Irish real property, minerals, and mining rights. Shares deriving value from non-Irish real property and minerals qualify for exemption if other conditions are met.
Capital losses from the disposal of shareholdings that would be exempt under the participation exemption are not deductible.

Main Allowable Deductions and Tax Credits

Deductible expenses must be incurred wholly and exclusively for the purposes of business transactions and/or to generate revenue. As such, entertainment expenses are non-deductible, nor are fines and penalties. Revenue expenditure incurred up to three years before a business activity begins is generally deductible. Depreciation is non-deductible but can be offset by capital allowances. Generally, deductions can be claimed for royalties, management service charges, and most interest charges paid to foreign affiliates, provided the amounts do not exceed what would be paid to unrelated entities. Contributions to certain employee pension schemes are deductible in the year they are incurred. Deductible taxes when computing profits for corporation tax include unrecovered VAT, the employer’s share of PRSI contributions, and local taxes such as rates on commercial property and local authority charges.

Expenditure on scientific R&D and payments for the acquisition of know-how are generally deductible, as are the costs of obtaining or extending patents and obtaining and renewing trademarks. These expenses give rise to a tax credit of 30% (following Finance Act 2023, 25% before),  which can be used to offset the tax debts of a firm established in the tax year during which expenses were incurred. A Knowledge Development Box (KDB) regime allows for profits from patented inventions and copyrighted software earned by a company residing in Ireland to be taxed at an effective rate of 6.25% (increased to 10% for 1 October 2023-31 December 2026).

Certain start-up companies that begin trading between 2009 and 2026 qualify for a corporation tax holiday. This relief applies for three years if the annual corporation tax does not exceed EUR 40,000. Marginal relief is available for corporation tax between EUR 40,000 and EUR 60,000. The relief is linked to the amount of employer’s PRSI paid, encouraging companies that create jobs. Additionally, any unused relief from the first three years due to insufficient profits can be carried forward to subsequent years.

Companies are entitled to a deduction, as a trading expense, for qualifying donations to approved charities, educational institutions, schools, churches, research foundations, sports bodies, and other approved organisations that satisfy certain conditions (the donations must be above EUR 250).
Local taxes, VAT not recovered and the employer’s share of social security contributions are tax-deductible.

Net operating losses can be carried forward indefinitely or be offset against other income of any nature, either in the current or preceding accounting period. Terminal losses that arise within 12 months of the date a company ceases its activities may be carried back three years.

Other Corporate Taxes

Companies may be subject to other taxes, including industry-specific taxes such as a construction operations tax and a shipping tonnage tax (that can replace the corporate income tax). An additional "profit resource rent" tax applies to certain petroleum activities (from 25% to 40%). A carbon tax is levied on mineral oils (e.g. auto fuels, kerosene) that are supplied in Ireland. The rates of the carbon tax on oil and gas broadly equate to EUR 41 per tonne of CO2 emitted (shall be increased to EUR 100 by 2030).

Stamp duty on property transfers ranges from 1% to 7.5%, with 7.5% applying to nonresidential property. A 10% stamp duty rate applies to acquiring individual residential units (excluding apartments) if a person buys at least 10 units within a 12-month period. This 10% rate does not apply if the unit is leased to certain social housing providers on the acquisition day. There is also an exemption for short-term residential leases of houses and apartments if the lease term is less than 35 years or indefinite, and the annual rent is under EUR 50,000.

Municipal authorities impose "rates" on the occupation of commercial real property, which are deductible for corporation tax. Residential real estate incurs an annual local property tax at a base rate of 0.18% on values up to EUR 1 million and 0.25% on values above EUR 1 million, with valuation bands applicable. This tax is not deductible for corporation or individual income tax. Reduced rates may apply in certain situations. A vacant home tax applies annually to residential properties used as dwellings for less than 30 days in a 12-month period, with possible exemptions. For periods from November 1, 2023, to October 31, 2024, the rate is five times the local property tax rate. The residential zoned land tax, calculated at 3% of the market value of applicable land, excludes properties already liable for local property tax. Registration opens in early December 2024, with the first payment due on February 1, 2025.

The employer contributes 11.05% (to be increased to 11.15% as from 1 October 2024) of employees' salary for social security (Pay-Related Social Insurance - PRSI).

A 3% levy on gross premiums received by insurers applies to non-life insurance policies for risks located in Ireland. Additionally, a 2% contribution to the Insurance Compensation Fund applies to these premiums. For certain classes of life insurance policies related to risks in Ireland, a 1% levy on gross premiums is imposed. A 1% contribution on all motor insurance premiums funds the Motor Insurers’ Insolvency Compensation Fund (MIICF).
Voluntary health insurance policies are subject to risk equalisation levies, which aim to balance insurers’ costs due to age variations among the insured. As of April 1, 2023, these levies range from EUR 36 to EUR 438 per policy, depending on the age profile and type of coverage.

An exit tax charge applies on unrealized gains of companies that migrate or transfer assets offshore, without actual disposal, such that they leave the scope of Irish tax. The tax rate is 12.5% but is subject to an anti-avoidance provision that applies a higher rate of 33% in certain circumstances.

A levy of 0.112% applies to AIB, Bank of Ireland, EBS, and PTSB, based on the value of eligible deposits held by each bank on December 31, 2022, as defined by EU law.

A capital acquisitions tax may apply on gifts and inheritances at a rate of 33%.

Relevant Contract Tax (RCT) is a withholding tax applicable to specific payments from principal contractors to subcontractors in construction, forestry, and meat-processing industries. Tax rates are set at 0%, 20%, and 35%. An individual or company can be classified as a principal contractor if they subcontract all or part of a relevant contract for RCT purposes, even if they are initially a subcontractor under the contract.

Other Domestic Resources

Irish Tax and Customs

Tax Rate

Allowable Deductions and Tax Credits

The same principles of deductibility for revenue expenditure apply to individuals and corporations. Deductions are generally provided for retirement annuities, mortgage interest, and insurance (up to 10% of total income). Personal allowances are also provided for the Irish taxpayer, as well as their spouses and dependents. Certain medical expenses in relation to nursing home fees can be claimed as a deduction from taxable income at the marginal rate of tax (i.e. currently 40%). Other medical expenses may qualify for tax relief at 20%.

A personal allowance is available if an individual employs a person to take care of an incapacitated relative. The individual employing the carer is entitled to a tax allowance of the actual cost of employing the carer up to a maximum of EUR 75,000, which can be claimed at the marginal tax rate.
Contributions to Revenue-approved occupational pension schemes are allowable deductions for employees concerning PAYE. However, there is no relief from PRSI or USC for employee pension contributions. Additionally, no deduction is available when calculating employer PRSI contributions based on employee pension contributions. Ordinary employer contributions to a Revenue-approved scheme are tax-deductible. The annual earnings limit, which, along with age-related percentage limits, determines the maximum tax-relievable contributions for pension purposes, is EUR 115,000. A personal allowance for premiums paid to an Irish Revenue-approved permanent health insurance (PHI) scheme is available. The allowance may be claimed at the marginal tax rate, with the relief capped at 10% of the total income for that year.

Tax relief is available for donations by individuals to certain approved bodies (e.g. charities and educational establishments). Interest on loans for investments in rental properties is also deductible.
A deduction of 30% of vouched expenses for electricity, heating, and internet services for days spent working from home may be claimed by remote workers. A rent tax credit valued at EUR 750 per year is available for rent paid on a principal private residence. The total value of tax-free benefits or vouchers (maximum of two) an employer can give an employee per year is EUR 1,000. A temporary mortgage interest relief of 20% (capped at EUR 1,250) is available for qualifying homeowners on the increase in mortgage interest paid on a qualifying loan in 2023 over interest paid in 2022. This relief will operate as a credit offset against the 2023 income tax liability paid in 2024. A temporary tax relief for qualifying individual landlords of rented residential property for years 2024 to 2027 is available by way of an income tax credit (capped at EUR 600 for 2024).

Several tax credits are also provided. The main ones for 2024 include the following: single person with no dependent child (EUR 1,875), married or in a civil partnership (EUR 3,750), widowed person or surviving civil partner without qualifying child (EUR 2,415), widowed parent bereaved in 2024 (EUR 3,750), single parent with dependent child including single person child carer credit (EUR 3,625), widowed person or surviving civil partner with dependent child - first year after bereavement including single person child carer credit (EUR 5,350), incapacitated child (EUR 3,500), married couple or civil partnership - home carer (EUR 1,800), blind person’s tax credit: single, married, or in a civil partnership one spouse blind (EUR 1,650), married or in a civil partnership both blind (EUR 3,300), dependent relative (EUR 245), age tax credit: single, widowed, or surviving civil partner (EUR 245), married or in a civil partnership (EUR 490), employee PAYE tax credit (EUR 1,875), earned self-employed income credit (EUR 1,875), maximum relief for certain fees for third level colleges (EUR 7,000), medical insurance (standard rate i.e. 20%), dental insurance (standard rate i.e. 20%), certain fees for third level colleges (standard rate i.e. 20%), qualifying health expenses no excess (standard rate i.e. 20%).

For a full list of the rate bands and tax reliefs for the tax year 2024, consult the dedicated page on the website of the Irish Tax and Customs.

Special Expatriate Tax Regime

Non-residents are taxed at the same rates as residents, but only on their Irish-source income.