The corporation tax in Ireland is fully open and transparent. The features within makes it one of the most attractive global investment location. The corporation tax rate is 12.5% which is relatively lower compared to other European countries. It is the tax imposed on the net income of the company. It refers to the amount of tax that companies are supposed to pay to the government or tax authorities from annual profits. This tax has various effects on the company’s investment decisions as well as government revenues.

Corporation tax in Ireland, Are you eligible?
There are two rates of corporation tax in Ireland as follows:

-12.5% for trading income or active income.

– 25% for non-trading or passive income.

The 12.5% corporation tax rate is only available to trading companies which are managed and controlled within Ireland. Low corporation taxes like that in Ireland can help  create competitive advantage and fuel growth by freeing up more profits for re-investment, discouraging domestic companies from moving investment overseas and attracting foreign companies to locate here. It is a dynamic and rewarding business location. Many costs including salaries, rents and professional fees have become more affordable than other European countries in recent years.

There are also certain things to consider establishing your business in Ireland:

-Maintaining an office of the company is important in Ireland.
-Making sure that the board of directors live in Ireland.
-Holding the key decision making meetings and planning for the company in Ireland is essential.

What profits do you pay corporation tax on?
Taxable profits include the money your company or association makes from:

-Doing business
-Investments
-Selling assets for more than they cost.

If your company is based in Ireland, it pays company tax on all its profits from Ireland and abroad. If your company is not based in Ireland but has an office or branch there, it only pays corporate tax on its profits from its activities arising through or from that office or branch in Ireland.