Corporation Tax
Corporation tax is charged on the profits of companies which includes both normal income and chargeable gains. Certain expenses such as interest repayments can be offset against profits. The current rate of corporation tax in Ireland ranges from 10% to 25%, depending on the nature of the business.
The main rate, which is 12.5%, applies to trading income of companies. It is low compared to international standards and its longevity (introduced in 2003) has ensured widespread confidence among international enterprises in the value of investing in the Irish economy
The higher rate, 25%, applies to non-trading income such as interest gains, foreign sourced income and profits and rental income, and to profits from so-called "exempted trades", including land-dealing, income from working minerals, and petroleum activities.
The 10% rate, introduced in 1981, continues to apply to a limited number of manufacturing firms, IFSC finance enterprises and businesses located in the Shannon Free Zone; all typically large multi-nationals. It is used as a marketing incentive to attract foreign direct investment (FDI) into Ireland. Despite being credited with helping the IDA secure millions of euro worth of FDI and thousands of jobs, it is currently being phased out with the last year of the 10% rate likely to be 2010.
Certain shipping companies may elect to pay Tonnage Tax rather than Corporation Tax.
Read more about this topic: Taxation In The Republic Of Ireland
Famous quotes related to corporation tax:
“What I am anxious to do is to get the best bill possible with the least amount of friction.... I wish to avoid [splitting our party]. I shall do all in my power to retain the corporation tax as it is now and also force a reduction of the [tariff] schedules. It is only when all other efforts fail that I’ll resort to headlines and force the people into this fight.”
—William Howard Taft (1857–1930)