COMPANY IN IRELAND
What connects Facebook, Google, Apple and Intel? All these giants have their European headquarters in Ireland.
Ireland is a young country in Europe. Ireland separated from Great Britain in 1921 and has an area 4.5 times smaller than Poland. Despite being a northern people, the Irish are among the most popular people in the world. They are said to be extremely friendly and well-disposed towards other people. Those in need of help are willing to give it and support them. The capital city of Ireland is Dublin, and the country is inhabited by about 120,000 Poles.
Is it profitable to establish a company in Ireland?
The indirect answer may be the fact that it is here, beyond the Green Isles, that such giants as Google, Starbucks and Facebook have moved their headquarters. Ireland is considered to be a European tax haven and the official apparatus is considered to be business friendly. Especially often, setting up a company in Ireland is beneficial for ventures in the IT category (especially cryptocurrencies). Holding, service and production solutions using Irish companies are also not surprising (properly planned company formation allows for safe tax optimization). Ireland is distinguished by low tax rate on corporate income, lack of taxation on partnerships if income does not come from sources located in Ireland or lack of taxation on dividends. In Ireland one can distinguish a limited liability company (PLC), partnership – such as limited partnership (Limited Partnership) or a branch of foreign company as in Poland.
The Irish economy is dynamic and global and the government introduced a number of improvements for entrepreneurs a few years ago to encourage them to invest on the Green Island.
Taxes in Ireland
The key point is that the basic tax-free amount is €16,500 (approx. PLN 75,000) and this is higher than in the UK (there it is £11,500 or approx. PLN 61,000). Taxes in Ireland are considered to be one of the fairest.
PIT is 20% and 40%. However, these rates depend on the family situation of the taxpayer. Thus:
- a single person who has no dependents benefits from a tax-free amount of €16,500 and pays 20% tax on income between €16,500 and €33,800, and 40% on the excess;
- a person who raises children alone enjoys a tax-free amount of €24,750 and pays 20% tax on the income between €24,750 and €37,800 and 40% on the excess;
- married couples in which the income is earned by a single person, benefit from a tax-free amount of €24,750 and pay 20% tax on the income between €24,750 and €42,800 and 40% on the excess;
- married couples in which the spouses jointly gain income benefit from a tax-free amount of 33 800 euros and pay 20% tax on the income between €33,800 and €67,600, and 40% on the excess.
Company in Ireland and its taxation
A company in Ireland, with a low annual turnover of the company, does not require registration as a VAT payer. CIT in Ireland is the lowest in Europe and amounts to 12.5% (increased CIT rate up to 25% applies to income generated from financial operations). During the first 3 years of business activity (regardless of income source) the company may benefit from full CIT exemption (up to EUR 1 million of profit). Registration as a VAT payer has to be done only by those companies whose annual turnover exceeds the amount of EUR 55,000 (when selling goods) or EUR 27,000 (when providing services).
Minimum social security contributions (USC – Universal Social Charge) paid at the rate of 0.5%, 2.5%, 8% and 11% of income.
Opening a Company in Ireland
Company registration in Ireland involves minimum formalities for the director, no liability of the director, simplified cost accounting, the required share capital is €100. An EU director is required.
Incorporation of a company in Ireland must be filed with the Companies Registration Office. Registration of a company in Ireland should also take place at the Revenue Commissioners, Tax Office. The procedure connected with registration in US is not complicated. The business must be insured and the entrepreneur should immediately open a company bank account.
If you want to learn more about setting up a company in Ireland or United Kingdom we encourage you to contact us.
Ready-made company in Ireland
We will be happy to provide you with more information and answer your questions not only about setting up a company but also about the possibility of buying a ready-made company. A ready-made company in Ireland can be a time-saver, which requires establishing a company. Buying a company in Ireland can be the solution to this problem.
Establishing a company in Ireland – the most important advantages
The most important reason is the official English language and transparent tax system offering one of the lowest CIT rates in Europe which is 12.5%, the same as in the tax haven Cyprus. On the other hand, registration of a company in Ireland and subsequent reporting is much simpler than in Cyprus and takes place mainly via the Internet. Additionally, the tax system allows for a number of further optimizations. Thus, the famous “double Irish with Dutch sandwich” scheme involves two Irish companies, a Dutch company and a typical offshore company. The first Irish company has royalty income on goods sold to consumers in the US.
This reduces US income, and therefore taxes, significantly, and Irish royalty taxes are very low. The company in Ireland can then transfer its profits tax-free to the offshore company. The second Irish company is used to sell to European customers and can transfer its profits to the first Irish company using the Dutch company as an intermediary. Then there is no tax along the way and the first Irish company now has all the income and can send it to the offshore company again. Additionally, the Irish Tax Commissioner recently announced that the three-year tax exemption i.e. 0% CIT rate for new companies setting up in Ireland has been extended to companies registered in Ireland until December 31, 2018. Such a company may not pay tax for 3 years if it meets the income and object requirements.