What is Corporation Tax (Ireland)?
Corporation Tax is the tax Irish-resident companies pay on their profits. Trading income is taxed at 12.5%, while non-trading (passive) income is taxed at 25%. Large multinationals within the OECD Pillar Two scope pay a minimum effective rate of 15%.
Current Rate (Calendar year, but companies file on their own accounting period)
12.5% on trading income, 25% on non-trading income, 15% top-up under Pillar Two for groups with €750m+ revenue
Example
An Irish Ltd with €200,000 trading profit pays €25,000 Corporation Tax (12.5%). If €10,000 of that is rental income, that portion is taxed at 25% (€2,500), leaving the trading profit at 12.5%.
How Corporation Tax (Ireland) works in Ireland
Ireland's 12.5% headline rate is the cornerstone of its FDI strategy and applies to active trading income. Passive income (rents, royalties not from active management, foreign dividends not exempt) is taxed at 25%. Corporation Tax is filed via Form CT1 through Revenue Online Service (ROS) within 9 months of the company's year-end, with the 21st (electronic) or 23rd (paper) of the ninth month being the filing date.
From 1 January 2024, Ireland adopted Pillar Two rules, applying a 15% minimum effective tax rate to multinational groups with consolidated revenue of €750 million or more. Smaller companies continue to benefit from the 12.5% trading rate.
Related terms
Value Added Tax in Ireland is charged on most goods and services. The standard rate is 23%, with reduced rates of 13.5% (hospitality, construction services), 9% (newspapers, certain e-publications), and 4.8% (livestock). Zero-rated supplies include most food, children's clothing and books.
An Irish private limited company (Ltd, formerly LTD or Limited By Shares) is the most common business entity in Ireland. It is a separate legal entity from its owners, with limited liability, and is governed by the Companies Act 2014. Companies must have at least one EEA-resident director or hold a Section 137 bond.
Preliminary tax is Ireland's pay-on-account system. Companies pay 90% of expected current year liability (or 100% of prior year for 'small' companies with prior CT under €200,000) one month before year-end. Self-employed individuals pay 90% of current year or 100% of prior year by 31 October each year.
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