Ireland is recognised in Europe and around the world as a major inward investment location. Ireland
has a leading reputation as an onshore EU OECD white-listed location. It is a key EMEA hub for
the financial services, information technology, e-commerce, gaming and pharmaceutical sectors. It
has a growing profile as the holding company EU location of choice and a location from which to
own intellectual property. In the financial sector, Ireland is a world-leading location for asset and
structured finance, insurance and investment funds.
In common with all other EU Member States, Ireland uses a sophisticated toolkit of tax rates,
exemptions, allowances, credits and reliefs to attract various activities to its shores. At the epicentre
of this regime is a 12.5% corporation tax rate for almost any trading activity carried out in the State,
an exemption from tax for certain investment funds and share portfolio income, and an ability to
structure cross-border transactions, including big ticket leasing, through Irish corporate and other
vehicles so as to utilise Ireland's extensive double tax treaty network. Ireland currently has 48 double
taxation agreements in effect. The countries with which Ireland has a double taxation agreement
outside the EU are: Australia, Bahrain, Belarus, Bosnia Herzegovina, Canada, Chile, China, Croatia,
Georgia, Iceland, India, Israel, Japan, Republic of Korea, Macedonia, Malaysia, Mexico, Moldova,
New Zealand, Norway, Pakistan, Russia, Serbia, South Africa, Switzerland, Turkey, United States of
America, Vietnam and Zambia.
A company which is tax resident in Ireland is liable to tax at 12.5% on trading activities carried on
in the State and in respect of dividends from trading subsidiaries. A system of onshore pooling of
foreign tax credits enables credit for foreign tax, including withholding taxes on profits out of which
dividends have been paid, to eliminate the incidence of Irish tax.
Moreover, Finance Act 2010 exempts trading income from trading portfolio shareholdings. This
exemption is particularly attractive for insurance companies and other financial institutions in receipt
of dividend income on shares that represent less than 5% of, broadly, a company's issued share
capital.
A 25% corporate tax rate applies to passive income, certain land dealing and oil, gas and mineral
exploitation. Non-trading activities subject to tax at 25% are typically outside the scope of the new
Irish transfer pricing regime. Set out below are various examples by which Ireland's tax regime may
be used for differing businesses and other activities.
