Expanding a Business Into Ireland

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In recent years, Ireland has established itself as a destination of choice for many foreign companies.
A pro-business environment, favourable tax regime, the availability of a skilled and flexible labour force and a high standard of living have seen the country emerge as an attractive investment centre for American-owned businesses.

For decades, the country has promoted itself to American companies as the Gateway to Europe. This has even greater resonance in the post-Brexit world. With the UK now out of the EU, Ireland is the only English-speaking country in Europe.

If you’re looking to set up a business in Ireland or are already here, we can guide you every step of the way. The team of chartered accountants in our Dublin office will keep you up to date and compliant with all tax and accounting matters in the Irish jurisdiction.

For US businesses expanding into UK and European Union markets, we also offer support and advice on accountancy, tax and regulatory frameworks.

At St Matthew, we know international requirements inside out so you can be sure that your
bookkeeping, accounting, payroll and other tax matters will be handled according to local rules.
We are proud to provide a prompt, dedicated and confidential service to all our clients.

Some of the services we provide include:

Company registration

Accounting and bookkeeping

Individual taxes

VAT registration, filing and submission

Payroll taxes

Company registration

Accounting and bookkeeping

Individual taxes

VAT registration, filing and submission

Payroll taxes

Ireland’s Tax Regime

To familiarise you with operating in Ireland, here’s a snapshot of the country’s tax regime.

Payroll Taxes

Ireland operates a PAYE (pay as you earn) system for income tax.

Any employer that makes payments above €8 per week (or €36 per month) in the case of a full-time employee has to register with Revenue, the Irish equivalent of the IRS. The tax is deducted from an employee’s salary by the employer on behalf of the Irish government.

Even if a company has no other employees except directors, it must still register as an employer. Directors of Irish incorporated companies are liable to pay tax on income attributable to their directorship regardless of residency status or where the duties were performed.

The current Irish income tax brackets are:

  • Up to €35,300 – 20% (individuals without dependent children).
  • Up to €39,300 – 20% (individuals qualifying for Child Carer credit).
  • Up to €44,300 – 20% (married or civil partner couples where one spouse or partner has an income).
  • Earned income remainder – 40% (all categories)

Reporting all the taxes

Employers have to report all the tax they deduct from an employee’s pay on or before the pay date. If employees are paid weekly, payroll submissions to Revenue must be carried out weekly. By the fifth day of the following month, Revenue sends each employer a statement showing the total tax liability for the month based on their payroll submissions.

This must be paid within:

  • Fourteen days after the end of each month.
  • Twenty-three days after the end of the month for companies that file their returns and pay tax via the Revenue Online Service.

If total payments for the year are €28,800 or less (including local property tax and universal social charge), businesses can apply to settle their income tax bill quarterly.

In Ireland, employees who are homeowners can opt to pay their annual local property tax (LPT) from salary. The Revenue Payroll Notification (RPN) issued for each employee provides the necessary information to deduct the correct amount.

Universal Social Charge (USC)

Employers are also responsible for deducting the universal social charge (USC). This is a personal tax on total income for the provision of services.

For the purposes of USC, total income includes such things as employment income, share option gains, dividend income and rental income.

Medicare/ Pay Related Social Insurance (PRSI)

Employers and employees are obliged to make payments into the country’s Social Insurance Fund to help pay for social welfare and benefits. Contributions are known as Pay Related Social Insurance (PRSI) contributions and are divided into different categories, called ‘PRSI classes.’ The class and rate of contribution are determined by weekly earnings and the nature of employment. Most employees pay Class A PRSI.

Employers make PRSI contributions for all employees aged 16 or over. They are made by deducting up to 11.05% of an employee’s salary through the Pay-As-You-Earn (PAYE) income tax system.

Currently, employers pay 8.8% Class A employer PRSI on weekly earnings from €38 to €395 and 11.05% Class A employer PRSI on weekly earnings of €395.01 and over.

Corporate Tax

Ireland has one of the lowest corporation tax rates in the world, currently set at 12.5%. This is the headline rate, but for some companies, it can be lower if they’re entitled to certain reliefs and tax incentives, such as the R&D tax credit.

Companies resident in Ireland pay the tax on their worldwide profits which includes income and gains.

A company is tax resident in Ireland if:

  • It was incorporated in the country on or after 1 January 2015.
  • Is centrally managed and controlled in Ireland.

Non-resident companies that trade through an agency or branch must also pay the tax.

Capital Gains Tax

Companies resident in Ireland must pay capital gains on their worldwide gains.

Non-resident companies must pay capital gains on the disposal of specific gains. These include:

  • Land and buildings in Ireland.
  • Mineral rights and interests in Ireland.
  • Disposal of shares not quoted on the stock exchange and where most of the value is derived from Irish land, buildings or mineral rights.

The capital gains tax rate for most gains is 33%.

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If you are interested in setting up a company in Ireland and require advice, please book a consultation with one of our experts.

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