Corporate Tax 2010 - BMR Advisors

McCann FitzGerald
Ireland
liable to capital gains tax on chargeable gains arising on disposals
made prior to 14 October 2008 at a rate of 20%.
Capital acquisitions tax is payable on gifts or inheritances, subject
to various thresholds. The applicability of the thresholds will
depend on the relationship of the recipient to the disponer. The rate
of capital acquisitions tax on benefits taken on or after 8 April 2009
is 25%, the rate on benefits taken between 20 November 2008 and
8 April 2009 is 22%, and the rate on benefits taken between 1
December 1999 and 19 November 2008 is 20%.
In addition, commercial rates are levied on the occupiers of
commercial and industrial properties by local authorities.
not give rise to any Irish tax consequences for the parent company.
There is no capital duty in Ireland.
6.2 Are there any other significant taxes or fees that would be
incurred by a locally formed subsidiary but not by a
branch of a non-resident company
There are no significant taxes or fees that would be incurred by an
Irish subsidiary company but not by an Irish branch of a nonresident
company.
Ireland
4.8 Are there any local taxes not dealt with in answers to
other questions
Other than those mentioned above, there are no further Irish taxes.
5 Capital Gains
5.1 Is there a special set of rules for taxing capital gains and
losses
There is a special set of rules for taxing capital gains in Ireland.
5.2 If so, is the rate of tax imposed upon capital gains
different from the rate imposed upon business profits
Where a company is within the charge to corporation tax, any
capital gains realised on disposals of capital assets (other than
development land) are subject to corporation tax at 25%.
5.3 Is there a participation exemption
Section 626B of the Taxes Consolidation Act 1997 of Ireland as
amended contains an exemption from capital gains tax on the
disposal by a company of a substantial shareholding in a subsidiary
company where certain conditions are met. In order to benefit from
this exemption, the parent company must have held 5% of the
subsidiary’s ordinary share capital, and have been entitled to 5% of
the profits available for distribution and 5% of the assets available
for distribution on a winding up, for a period of at least 12 months.
The subsidiary must be resident for tax purposes in the European
Union or in a country with which Ireland has a double tax treaty that
is in effect. In addition, at the time of disposal, the subsidiary
company must be a company whose business consists wholly or
mainly of the carrying on of a trade, or the business of the parent
company, the subsidiary and any subsidiaries of each of these
companies taken as a whole consists wholly or mainly of the
carrying on of a trade.
6.3 How would the taxable profits of a local branch be
determined
Non-Irish resident companies that operate in Ireland through a
branch or agency are liable to Irish corporation tax on trading
income arising directly or indirectly from the branch, and on any
other income from property or rights used for the branch, wherever
that income arises. The standard rate of corporation tax of 12.5%
applies to the trading profits of an Irish branch.
Non-Irish resident companies may also be subject to Irish income
tax if they have any Irish source income, other than income from a
trade carried on by a branch in Ireland. This is unless such income
is otherwise exempt under Irish domestic law or relieved from Irish
tax under the provisions of a double taxation treaty that is in effect
with Ireland.
6.4 Would such a branch be subject to a branch profits tax (or
other tax limited to branches of non-resident companies)
There is no branch profits tax, or other tax applicable only to
branches of non-resident companies, in Ireland.
6.5 Would a branch benefit from tax treaty provisions, or some
of them
Only companies resident for the purposes of tax in Ireland can avail
of Ireland’s tax treaty network. Accordingly, an Irish branch of a
non-resident company cannot benefit from the provisions of
Ireland’s double tax treaties. A branch can benefit from certain
unilateral reliefs for overseas tax.
6.6 Would any withholding tax or other tax be imposed as the
result of a remittance of profits by the branch
The remittance of profits by the Irish branch of a non resident
company will not be subject to withholding tax in Ireland.
7 Anti-avoidance
5.4 Is there any special relief for reinvestment
There is no special relief for reinvestment in Ireland.
6 Branch or Subsidiary
6.1 What taxes (e.g. capital duty) would be imposed upon the
formation of a subsidiary
The formation of a subsidiary in Ireland by a parent company, does
ICLG TO: CORPORATE TAX 2010
© Published and reproduced with kind permission by Global Legal Group Ltd, London
7.1 How does Ireland address the issue of preventing tax
avoidance For example, is there a general anti-avoidance
rule or a disclosure rule imposing a requirement to
disclose avoidance schemes in advance of the company’s
tax return being submitted
Section 811 of the Taxes Consolidation Act 1997 of Ireland as
amended contains a general anti-avoidance provision to counteract
certain transactions which have little or no commercial reality but
are carried out primarily to create an artificial tax deduction or to
avoid or reduce a tax charge.
WWW.ICLG.CO.UK 137