Corporate tax in Ireland


Corporate Income Tax Rate (%) 12.5 (a)
Capital Gains Tax Rate (%) 33 (b)
Branch Tax Rate (%) 12.5 (a)
Withholding Tax (%)
Dividends 20 (c) (d)
Interest 20 (d) (e) (f)
Royalties 20 (d) (f) (g)
Branch Remittance Tax 0
Net Operating Losses (Years)
Carryback 1
Carryforward Unlimited

a) This rate applies to trading income and to certain dividends received from nonresident companies. A 25% rate applies to certain income and to certain activities. For details concerning the tax rates, see Section B.

b) A 40% rate applies to disposals of certain life insurance policies.

c) This withholding tax is imposed on dividends distributed subject to excep­tions (see Section B).

d) Applicable to both residents and nonresidents.

e) Interest paid by a company in the course of a trade or business to a company resident in another European Union (EU) member state or in a country with which Ireland has entered into a double tax treaty is exempt from withholding tax, subject to conditions. See footnote (p) in Section F for details regarding an extension of this exemption. Bank deposit interest is subject to a 41% deposit interest retention tax (DIRT). DIRT exemptions apply to bank interest paid to nonresidents and, subject to certain conditions, bank interest paid to Irish resident companies and pension funds.

f) Ireland implemented the EU Interest and Royalties Directive, effective from 1 January 2004.

g) Under Irish domestic law, withholding tax on royalties applies only to certain patent royalties and to other payments regarded as “annual payments” under Irish law. The Irish Revenue has confirmed that withholding tax need not be deducted from royalties paid to nonresidents with respect to foreign patents (subject to conditions).

Taxes on corporate income and gains

Corporation tax. A company resident in Ireland is subject to cor­poration tax on its worldwide profits (income plus capital gains). The rules for determining the tax residence of companies were fundamentally revised in the 2014 Finance Act. It is now provided that all Irish-incorporated companies are regarded as Irish resi­dent, subject to an override in a double tax treaty. This rule applies from 1 January 2015 for companies incorporated on or after 1 January 2015. For companies incorporated before 1 January 2015, the new rule applies from the earlier of 1 January 2021 or from a date on or after 1 January 2015 on which both of the fol­lowing conditions are satisfied:

  • A change in ownership of the company occurs.
  • Within one year before or five years after the change in owner­ship, a major change in the nature or conduct of the business of the company occurs.

For companies within this transitional period and for compan­ies that are incorporated in other jurisdictions, the general rule for determining company residence is the common law, which provides that a company resides where its real business is carried on, that is, where the central management and control of the com­pany is exercised.

Subject to neither of the changes referred to above occurring, a company incorporated in Ireland before 1 January 2015 is treated as resident for tax purposes in Ireland unless either of the follow­ing apply:

  • The company or a related company (50% common ownership of ordinary share capital) carries on a trade in Ireland and either of the following conditions is satisfied:

— The company is controlled by persons (companies or indi­viduals) resident in a European Union (EU) member coun­try or in a country with which Ireland has entered into a tax treaty (treaty country), provided these persons are not con­trolled by persons that are not resident in such countries.

— The principal class of shares in the company or a related company is substantially and regularly traded on one or more recognized stock exchanges in an EU or treaty country.

  • The company is regarded under a tax treaty as being resident in a treaty country and not resident in Ireland.

Notwithstanding the transitional rules, Finance (No. 2) Act 2013 provides that an Irish incorporated company is regarded as Irish resident if all of the following circumstances exist:

  • The company is centrally managed and controlled in a territory with which a tax treaty is in force.
  • It would have been tax resident in that relevant territory under its laws had it been incorporated there.
  • The company would not otherwise be regarded by virtue of the law of any territory as resident in that territory.

This provision applies to all companies incorporated in Ireland on or after 24 October 2013 and to existing Irish incorporated companies, effective from 1 January 2015.

A company not resident in Ireland is subject to corporation tax if it carries on a trade in Ireland through a branch or agency. The liability applies to trading profits of the branch or agency, other income from property or rights used by the branch or agency, and chargeable gains on the disposal of Irish assets used or held for the purposes of the branch or agency.

A company resident in a country with which Ireland has entered into a tax treaty is subject to tax only on profits generated by a permanent establishment as described in the relevant treaty. This normally requires a fixed place of business or dependent agent in Ireland. Companies that are resident in non-treaty countries and do not trade in Ireland through a branch or agency are subject to in come tax on income arising in Ireland and to capital gains tax (CGT) on the disposal of certain specified Irish assets (see Charge­able capital gains).

Rates of corporation tax. The standard rate of corporation tax on trading income is 12.5%.

On election, the 12.5% rate also applies to dividends received from the following companies:

  • A company resident in an EU member state, a treaty country or a country that has ratified the Organisation for Economic Co-operation and Development (OECD) Convention on Mutual Assistance in Tax Matters
  • A company that is 75%-owned by a publicly quoted company

The election applies only to dividends sourced from trading in­come unless the dividends are portfolio dividends (less than 5% interest). In this instance, the dividends are deemed to be from a “trading” source. Foreign dividends from portfolio investments that form part of the trading income of a company are exempt from corporation tax.

A 25% rate applies to the following:

  • Certain non-trading income, such as Irish rental and investment income
  • Foreign income unless the income is part of an Irish trade
  • Income from “working minerals” (broadly defined), petroleum activities and dealing or developing land other than construc­tion operations (for the taxation of construction operations, see Land transactions)

Start-up companies. A three-year exemption from tax on certain trading profits and capital gains (subject to conditions) applies to companies with a total corporation tax liability (as defined) of less than EUR40,000 per year. This exemption applies to new companies that begin trading on or before 31 December 2018. A cap referring to employer social insurance costs applies.

Land transactions. Different tax rates apply to land transactions. Profits or gains derived from dealing in residential or nonresiden­tial development land are subject to the higher rate of corporation tax (25%). Most construction operations are subject to corpora­tion tax at the standard rate of 12.5%.

Shipping companies. Shipping companies that undertake qualify­ing shipping activities, including carriage of cargo and passen­gers, marine-related activities, leasing of qualifying ships and re lated activities, may elect to be subject to a special tonnage tax regime instead of the normal corporation tax regime.

Under the tonnage tax regime, profits are calculated on the basis of a specified profit per day according to the tonnage of the rel­evant ship. The following are the amounts of the daily profit attrib­uted to each qualifying ship:

  • For each 100 tons up to 1,000 tons: EUR1.00
  • For each 100 tons between 1,000 and 10,000 tons: EUR0.75
  • For each 100 tons between 10,000 and 25,000 tons: EUR0.50
  • For each 100 tons above 25,000 tons: EUR0.25

The profits attributed to each qualifying ship for the accounting period will be determined by multiplying the daily profit as deter­mined above by the number of days in the accounting period, or, if the ship was operated by the company as a qualifying ship for only part of the period, by the number of days in that part of the accounting period.

The standard corporation tax rate for trading income (12.5%) ap plies to the amount of profits determined under the rules de-scrib ed above.

Oil and gas exploration. Petroleum production tax (PPT) applies to oil and gas exploration authorizations granted on or after 18 June 2014. PPT replaces profit resources rent tax (PRRT). This new regime applies a tax-deductible PPT to the net profits of each field, using a sliding scale of rates from 10% to 40%, based on the profitability of the field. This is in addition to the existing 25% corporation tax rate. A minimum PPT equal to 5% of field gross revenue less transportation expenditure applies.

PRRT continues to apply to authorizations granted in the period 1 January 2007 through 17 June 2014. The PRRT is imposed in addition to the 25% corporation tax rate, and it operates on a graduated basis that is linked to the profitability of the oil or gas field. The tax rate varies according to the profit ratio (rate of cumulative profits less 25% corporation tax divided by accumu­lated capital investment). The following are the tax rates.

Profit ratio Tax rate (%)
Less than 1.5 0
Between 1.5 and 3 5
Between 3 and 4.5 10
Exceeding 4.5 15

Close companies. Investment and rental income of a “close com­pany” is subject to an additional 20% surcharge if it is not distrib­uted within 18 months after the end of the relevant accounting period. A closely held professional services company is subject to a 15% surcharge on 50% of its undistributed trading income. Broadly, a “close company” is a company that is under the con­trol of five or fewer persons or under the control of its directors (as defined).

Life insurance companies. For life insurance business written before 1 January 2001, policyholders are subject to income tax at the standard rate (20%) on the investment income and gains less management expenses attributable to the policyholders. Life in­surance companies withhold the income tax. Resident individ­uals do not pay any further tax. Companies are subject to Irish CGT arising on the disposal of a life insurance policy and receive a credit for income tax at the standard rate deemed to have been deducted by the life insurance company. For life insurance busi­ness written after 1 January 2001 and all other business of life companies, a tax-free buildup of invest ment return over the term of the policy (gross roll-up) is allowed. However, for Irish resi­dents, an exit tax is imposed on gains re sult ing from certain “charge able events” (as defined). The exit tax is withheld at a rate of 41% on the difference between proceeds on redemption, ma­turity or assignment, and the premiums or subscription amounts paid. A 60% exit tax applies to personal portfolio life insurance policies (PPLPs). This rate applies to domestic and foreign PPLPs that were not cashed in before 26 September 2001.

Deemed disposal rules apply to gross roll up life polices held by Irish residents. A deemed chargeable event occurs at the end of every eight-year period (relevant period) beginning with the inception of the life policy. Exit tax is imposed on the gain arising on this deemed chargeable event. These rules do not apply to policies held by nonresidents.

Shareholder profits of domestic life insurance companies are taxed at the standard rate of corporation tax (now 12.5%) regard­less of whether they relate to business written before or after 1 January 2001.

Companies investing in Irish policies are generally subject to an exit tax, as described above. However, corporate holders of cer­tain foreign policies are subject to self-assessment tax at a rate of 25% on profits from the investment in the policies. These foreign policies are policies issued by an insurance company or a branch of such a company carrying on business in a member state of the EU (other than Ireland), in a state in the European Economic Area (EEA) or in a country in the OECD with which Ireland has entered into a tax treaty. Payments with respect to such policies accruing to Irish residents that are not companies are subject to income tax at a rate of 41%. The 41% rate depends on the filing of a self-assessment return with the Irish authorities. The deemed disposal measures (see above) also apply to foreign life policies. Pay ments with respect to foreign policies, other than those men­tioned above, are subject to tax at a rate of 40%. If a company investing in a life insurance policy is a close company, additional surcharges may apply.

Investment undertakings (gross roll-up funds and net funds). For investment undertakings (gross roll-up funds), distributions and other payments made are subject to an exit tax at a rate of 41%. This exit tax applies to the cancellation, redemption or assignment of shares and is imposed on the difference between the amount payable to the shareholder and the amount invested by the share­holder. A pro rata calculation applies for partial disposal, redemp­tion, cancellation, repurchase or assignment of shares unless the company has elected to apply a first-in, first-out basis of identi­fication for such disposals. Investments in IFSC funds are now covered by the investment under takings rules described above. Nonresidents are exempt from the exit tax in investment under­takings described above if they provide the relevant declarations. Certain Irish residents are also exempt from the exit tax if the relevant declarations are provided.

A 60% exit tax applies to personal portfolio investment undertak­ings (PPIUs). A 60% rate also applies to foreign PPIUs that are equivalent to Irish investment undertakings.

Unit holders are deemed to dispose of units acquired by them every eight years from the date of acquisition. To the extent that a gain arises on this deemed disposal, exit tax must normally be deducted and paid by the in vestment undertaking to the Irish tax authorities. On the disposal of the relevant unit, a credit is avail­able for the tax paid on the deemed disposal. Similarly, a refund is payable to the unit holder if the actual exit tax liability is less than the exit tax paid on the deemed disposals. This refund is gener­ally paid by the investment undertaking which can set off the re fund against future exit tax. The deemed disposal rules apply to units acquired on or after 1 January 2001.

Offshore funds that are equivalent to Irish investment undertak­ings are also subject to tax on a self-assessment basis similar to the rules applicable to foreign life policies (see Life insurance companies). Deemed disposal rules also apply to Irish residents after every eight years.

Offshore funds domiciled in another EU member state, EEA state or a member state of the OECD with which Ireland has entered into a double tax agreement, are no longer subject to the offshore fund rules, effective from 2 April 2007. They are subject to either marginal rate of income tax on distributions or CGT at 33%. Certain transitional rules apply. Other offshore funds are still sub­ject to either marginal rate income tax or CGT at 40%, depending on certain circumstances.

Investments in undertakings for collective investment (net funds) that are companies are subject to corporation tax at a rate of 30%.

Ireland has repealed the EU Savings Directive and incorporated the revised EU Council Directive on Administrative Cooperation (DAC 2) into Irish law. Ireland has already implemented the OECD Common Reporting Standard (CRS).

Knowledge Development Box. The 2015 Finance Act introduced the Knowledge Development Box (KDB). This regime complies with the OECD’s modified nexus approach. The KDB provides that an effective tax rate of 6.25% applies to qualifying profits. The relief is granted through a tax deduction and applies for ac­counting periods beginning on or after 1 January 2016 and before 1 January 2021. For KDB purposes, qualifying assets are innova­tions protected by qualifying patents (including patents pending) and certain copyrighted software. Expenditure on marketing-re­lated intellectual property such as trademarks and brands does not qualify. KDB claims must be made within 24 months after the end of the accounting period.

Chargeable capital gains. Chargeable capital gains are subject to corporation tax at a rate of 33% (except for development land gains which are subject to CGT at that rate). In computing a gain, relief is given for the effects of inflation by applying an index factor. However, indexation relief applies only for the period of ownership of an asset up to 31 December 2002.

In calculating the liability for CGT on the disposal of develop­ment land or unquoted shares deriving their value from such land, certain restrictions apply. The adjustment for inflation is applied only to that portion of the purchase price reflecting the current use value of the land at the date of purchase. The balance of the pur­chase price, without an adjustment for inflation, is still allowed as a deduction. Gains on development land may be reduced only by losses on development land. However, losses on development land may be set off against gains on disposals of other assets.

A nonresident company is subject to CGT or corporation tax on its chargeable capital gains from the following assets located in Ireland:

  • Land and buildings
  • Minerals and mineral rights
  • Exploration or exploitation rights in the continental shelf
  • Unquoted shares deriving the majority of their value from such assets
  • Assets used in a business carried on in Ireland through a branch or agency

Exit charge. A company that ceases to be tax resident in Ireland is deemed to have disposed of all of its assets at that time and to have immediately reacquired the assets at market value. The company is subject to corporation tax on any gains resulting from such deemed disposal. The tax is calculated in accordance with the normal CGT rules.

The exit charge does not apply if 90% of the exiting company’s share capital is held by foreign companies resident in a jurisdic­tion with which Ireland has concluded a double tax treaty, or persons who are directly or indirectly controlled by such foreign companies.

An exemption applies to a company that ceases to be tax resident in Ireland but continues to carry on a trade in Ireland through a branch or an agency. In such circumstances, the assets used for the purposes of the branch or agency are not subject to the exit charge.

A company may postpone the charge in certain circumstances. In addition, an unpaid exit charge may be recovered from other group companies or controlling directors.

Substantial shareholding relief. An exemption from corporation tax applies to the disposal by an Irish company of a shareholding in another company (the investee company) if the following con­ditions are satisfied:

  • At the time of disposal, the investee company is resident for tax purposes in Ireland, in another EU member state or in a country with which Ireland has entered into a tax treaty.
  • The Irish company has held (directly or indirectly), for a period of at least 12 months, a minimum holding of 5% of the shares in the investee company.
  • The investee company is wholly or principally a trading com­pany or, taken together, the holding company, its 5% group and the investee company are wholly or principally a trading group.

If the above conditions are satisfied, the relief applies automati­cally (no claim or election mechanism exists).

Administration. The corporation tax liability is determined by self-assessment. As a result, a company must estimate its own liability. Preliminary tax is payable in two installments if the company is not a “small company” (see below). The initial installment is due on the 21st day of the 6th month of the accounting period (assum­ing the accounting period ends after the 21st day of a month). This installment must equal the lower of 50% of the tax liability for the preceding year or 45% of the tax liability for the current year. The final installment of preliminary tax is due 31 days before the end of the accounting period and must bring the aggregate preliminary tax payments up to 90% of the tax liability for the year. If this date falls on or after the 21st day of a month, the 21st of that month becomes the due date.

“Small companies” alternatively may pay preliminary tax equal to 100% of their tax liability for the preceding year. A company qualifies as a “small company” if its corporation tax liability for the preceding year did not exceed EUR200,000.

A company that pays more than 45% of its corporation tax liabil­ity for a period as an initial installment of preliminary tax or more than 90% of its corporation tax liability for a period by the due date for its final installment of preliminary tax can elect jointly with another group company that has not met the 45% or 90% tests to treat the excess as having been paid by that latter com­pany for interest calculation purposes only. Certain conditions apply.

Any balance of corporation tax due is payable by the due date for the filing of the corporation tax return (Form CT1). This is nor­mally nine months after a company’s accounting year-end.

When the nine-month period ends on or after the 21st day of a month, the 21st of that month becomes the due date for filing the Form CT1 and the payment of any balance of corporation tax.

A start-up company with a corporation tax liability of less than EUR200,000 is relieved from having to make any corporation tax payment until its tax return filing date.

Corporation tax returns and payments must normally be filed elec­tronically via Revenue Online Service. Electronic filers may avail of a two-day extension of return filing and payment deadlines. Accounts are required to be filed in iXBRL format, subject to limited iXBRL exemption criteria.

If a company does not comply with the above filing obligation, it is subject to one of the following surcharges:

  • 5% of the tax, up to a maximum penalty of EUR12,695, if the filing is not more than two months late
  • 10% of the tax, up to a maximum penalty of EUR63,485, in all other cases

In addition, the company suffers the reduction of certain tax reliefs, which consist of the set off of certain losses against cur­rent-year profits and the surrender of losses among a group of companies. The following are the applicable reductions:

  • A 25% reduction, up to a maximum of EUR31,740, if the filing is not more than two months late
  • A 50% reduction, up to a maximum of EUR158,715, in all other cases

The above surcharges and restrictions also apply if a company fails to comply with its local property tax (see Section D) obliga­tions with respect to residential properties that it owns.

A limited number of cases are selected for later in-depth revenue examination, and the assessment can be increased if the return is inaccurate.

A company must file a CGT return reporting disposals of devel­opment land and related unquoted shares and pay CGT on such disposals. CGT may be due twice a year, depending on the date of realization of the chargeable gains. CGT on such chargeable gains arising in the period of 1 January to 30 November must be paid by 15 December of that same year. CGT on such gains arising in Decem ber of each year is due on or before 31 January of the fol­lowing year.


Dividend withholding tax. Dividend withholding tax (DWT) is imposed on distributions made by Irish companies at a rate of 20%.

The law provides for many exemptions from DWT. Dividends paid to the following recipients are not subject to DWT:

  • Companies resident in Ireland
  • Approved pension schemes
  • Qualifying employee share ownership trusts
  • Collective-investment undertakings
  • Charities
  • Certain sports bodies promoting athletic or amateur games
  • Trustees of Approved Minimum Retirement Funds (funds held by qualifying fund managers on behalf of the individuals enti­tled to the assets)

Additional exemptions are provided for nonresidents. Distributions are exempt from DWT if they are made to the following:

  • Nonresident companies, which are under the direct or indirect control of persons (companies or individuals) who are resident in an EU member country or in a country with which Ireland has entered into a tax treaty (treaty country), provided that these persons are not under the control of persons not resident in such countries
  • Nonresident companies, or 75% parent companies of nonresi­dent companies, the principal class of shares of which is sub­stantially and regularly traded on a recognized stock exchange in an EU member country or a treaty country
  • Companies not controlled by Irish residents that are resident in an EU member country or a treaty country
  • Non-corporate persons who are resident in an EU member coun­try or a treaty country and are neither resident nor ordinarily resident in Ireland
  • Certain qualifying intermediaries and authorized withholding agents

Effective from 1 January 2009, the above “treaty country” refer­ences are extended to any country with which Ireland has signed a double tax treaty (see footnote [p] in Section F).

Detailed certification procedures apply to some of the exemp­tions from DWT described above.

DWT does not apply to dividends covered by the EU Parent-Subsidiary Directive. Anti-avoidance provisions prevent the use of EU holding companies to avoid DWT. If a majority of an EU parent company’s voting rights are controlled directly or indi­rectly by persons not resident in an EU or tax treaty country, DWT applies unless it can be established that the parent company exists for bona fide commercial reasons and does not form part of a tax avoidance scheme. DWT may also be recovered under a double tax treaty. The 2014 Finance Act introduced a wider gen­eral anti-avoidance rule, which denies the benefit of the directive if “arrangements” exist that “are not put in place for valid com­mercial reasons which reflect economic reality.”

Distributions paid out of certain types of exempt income, such as exempt woodland income, are not subject to DWT.

Companies must file a return within 14 days after the end of the calendar month of the distribution. The return is required regard­less of whether DWT applies to the distributions. Any DWT due must be paid over to the Collector General when the return is filed.

Other. A company resident in Ireland can exclude from its tax­able income distributions received from Irish resident companies (franked investment income).

Irish resident shareholders, other than companies, are subject to income tax on distributions received. DWT may be claimed as a credit against the recipient’s income tax liability. Recipients not subject to income tax may obtain a refund of DWT.

Foreign tax relief. Under tax treaty provisions, direct foreign tax on income and gains of an Irish resident company may be cred­ited against the Irish tax levied on the same profits. However, foreign tax relief cannot exceed the Irish corporation tax attribut­able to the same profits.

For purposes of calculating the credit under tax treaties, income derived from each source is generally treated as a separate stream. Consequently, foreign tax may generally be credited only against the Irish corporation tax on the income that suffered the foreign tax. However, a unilateral credit for otherwise unrelieved foreign tax on interest income may be offset against the corporation tax payable on the “relevant interest.” “Relevant interest” is defined as interest income from group companies, which are greater than 25% related and are resident in treaty countries. The unilateral credit relief effectively introduces a pooling mechanism for the calculation of the relief available.

If no treaty exists, a deduction for foreign tax paid is allowed against such income and gains. A unilateral credit relief is avail­able for foreign tax deducted from royalties received by trading companies. For royalties received after 1 January 2012, a limited corporate tax deduction is available for foreign tax suffered that would not otherwise qualify for double tax relief or unilateral credit relief.

An Irish tax credit is available for taxes equivalent to corporation tax and CGT paid by a branch if Ireland has not entered into a tax treaty with the country where the branch is located or if Ireland’s tax treaty with such country does not provide for relief (that is, unilateral relief for branch profits tax).

An Irish company that has branches in more than one country can pool its excess foreign tax credits between the different branches. This is beneficial if one branch suffers the foreign equivalent of corporation tax at a tax rate higher than 12.5% and another branch pays tax at a rate lower than 12.5%. Unused credits can be carried forward to offset corporation tax in future accounting periods.

Unilateral credit relief for foreign tax paid by a company on inter­est income that is included in the trading income of a company for Irish corporation tax purposes may also be available. The relief is available only if the company cannot claim relief under a double tax treaty for the foreign tax and if the tax has not been repaid to the company. The unilateral relief is equal to the lesser of the Irish corporation tax attributable to the relevant interest or the foreign tax attributable to the relevant interest.

Unilateral credit relief may be available for Irish resident compa­nies, or Irish branches of companies resident in EEA countries (excluding Liechtenstein), that receive dividends from foreign subsidiaries. Companies are permitted to “mix” the credits for foreign tax on different dividends from 5% subsidiaries for pur­poses of calculating the overall tax credit in Ireland. Any unused excess can be carried forward indefinitely and offset in subse­quent periods. The subsidiaries can be located in any country. However, credits arising on dividends taxed at 12.5% are ring-fenced to prevent these tax credits from reducing the tax on the dividends taxed at the 25% rate.

Effective from 1 January 2013, an additional foreign tax credit (AFC) is available with respect to certain dividends received from companies resident in EEA countries (excluding Liechten­stein) if the existing credit for actual foreign tax suffered on the relevant dividend is less than the amount that would be computed by reference to the nominal rate of tax in the country from which the dividend is paid. The total foreign tax credit, including the AFC, cannot exceed the Irish corporation tax attributable to the income. Certain dividends are excluded.

Ireland has implemented the EU Parent-Subsidiary Directive (as amended). These provisions, which overlap to a significant extent with the unilateral credit relief measures described above, have been extended to Switzerland.

A company that incurs a tax liability on a capital gain in one of nine specified countries may claim a credit for foreign tax against Irish CGT on the same gain. This unilateral credit is targeted at those countries with which Ireland has entered into double tax agreements before the introduction of CGT.

Determination of trading income

General. The calculation of trading income is based on the com-pany’s accounts prepared in accordance with generally accepted accounting practice (GAAP), subject to adjustments required or authorized by law. For tax purposes, accounts can be prepared under Irish GAAP (applies to accounting periods commencing before 1 January 2015), International Financial Reporting Stan­dards (IFRS) or Financial Reporting Standards (FRS) 101 or 102 (FRS applies for any accounting periods commencing on or after 1 January 2015). Detailed rules address any transition from Irish GAAP to IFRS and FRS 101 or 102.

If derived from Irish sources, income derived from commercial woodlands is exempt from tax.

Expenses must be incurred wholly and exclusively for the pur­poses of the trade and be of a revenue (as distinct from capital) nature. However, entertainment expenses are totally disallowed, unless they are incurred for employees only. The deductibility of motor leasing expenses is restricted by reference to the carbon dioxide emissions of the motor cars.

Revenue expenditure incurred in the three years before the begin­ning of trading is generally deductible.

A tax deduction is available for expenditure incurred on acquir­ing know-how, which includes industrial information and tech­niques likely to assist in the manufacture or processing of goods or materials, for the purpose of a trade. The deduction is available for expenditure incurred before 7 May 2011. See Tax deprecia­tion (capital allowances) for relief available on expenditure on intangible assets incurred on or after this date.

Depreciation of assets is not deductible. Instead, the tax code provides for a system of capital allowances (see Tax depreciation [capital allowances]).

Share-based payments. Consideration consisting directly or indi­rectly of shares in the company or a connected company that is given for goods or services or that is given to an employee or director of a company is generally not deductible except for the following:

  • Expenditure incurred by the company on acquiring the shares (or rights to receive the shares)
  • Payments made to a connected company for the issuance or the transfer of shares (or rights to receive the shares)

In effect, a tax deduction is denied for IFRS 2 or Financial Re-port ing Standard (FRS) 20 accounting costs unless these costs reflect actual payments. In addition, the timing of the tax deduc­tion for such payments is dependent on the employees’ income tax positions.

Interest payments. Interest on loans used for trading purposes is normally deductible on an accrual basis in accordance with its accounting treatment unless specifically prohibited.

Certain types of interest paid in an accounting period may be clas­sified as a distribution and, consequently, are not treated as an allowable deduction. However, interest may not be reclassified if it is paid by an Irish resident company to an EU resident company or to a resident of a treaty country (on election). Such interest is allowed as a trading deduction and is not treated as a distribution, subject to certain conditions and exceptions. To facilitate cash pooling and group treasury operations, in the context of a lending trade, a tax deduction may be allowed for interest payments to a connected company in a non-treaty jurisdiction, to the extent that the recipient jurisdiction levies tax on such interest.

Before 2003, a borrower could accrue interest on a loan and claim a tax deduction, while the lender might not be subject to tax until the interest was actually paid. However, since 2003, a tax deduc­tion for interest accrued on a liability between connected persons (including companies and individuals) may be deferred until such time as the interest is actually paid if all of the following circumstances exist:

  • The interest is payable directly or indirectly to a connected person.
  • Apart from the new measure, the interest would be allowable in computing the trading income of a trade carried on by the payer.
  • The interest is not trading income in the hands of the recipient, as determined under Irish principles.

Detailed rules provide for the apportionment of interest between allowable and non-allowable elements.

The above restriction does not apply to interest payable by an Irish company to a connected nonresident corporate lender if the lender is not under the control, directly or indirectly, of Irish residents.

Banks may deduct interest payments made to nonresident group companies in calculating trading income (that is, the payments are not reclassified as distributions).

Charges on income, such as certain interest expenses and patent royalties, are not deductible in the computation of taxable trading income, but may be deducted when paid as a charge. A tax deduc­tion may be claimed for interest as a charge (as a deduction from total profits, which consists of income and capital gains) if the funds borrowed are used for the following non-trading purposes:

  • Acquisition of shares in a rental or trading company, or a com­pany whose business principally consists of holding shares in trading or rental companies
  • Lending to the companies mentioned in the first bullet, provided the funds are used wholly and exclusively for the purpose of the trade or business of the borrower or of a connected company

Deductions of interest as a charge have always been subject to certain conditions and anti-avoidance measures. These conditions and measures have added complexities to the implementation and maintenance of structures designed to qualify for this interest relief. In particular, interest relief is restricted if the borrower receives or is deemed to have received, a “recovery of capital” (as defined).

Interest on loans made on or after 2 February 2006 is not allowed as a tax deduction if the loan to the Irish company is from a con­nected party and if the loan is used, directly or indirectly, to ac­quire shares from a connected company. The 2011 Finance Act introduced measures that restrict the deductibility of interest as a trading expense and interest as a charge to the extent that an ac­quisition of assets from a connected company is funded by mon­ies borrowed from another connected company.

Certain additional anti-avoidance rules may apply in connected party situations.

Foreign-exchange gains and losses. Realized and unrealized foreign-exchange gains and losses relating to monies held or pay­able by a company for the purpose of its business, or to hedging contracts with respect to such items, are included in the taxable income of a company to the extent the gains and losses have been properly recorded in the company’s accounts. If a company ac­quires a shareholding in a 25% subsidiary in a foreign currency and that acquisition is funded by a liability (borrowings, share capital or a capital contribution) in the same foreign currency, the company can elect to match the foreign currency gain or loss on the asset (the shares in the 25% subsidiary) with the foreign cur­rency gain or loss on the liability. As a result, the company is tax­able only on the real economic gain or loss on the asset and not on currency movements against which it is economically hedged. A company must make the matching election within three weeks of the making of the investment.

An additional foreign-exchange matching measure permits trading companies to elect to match exchange-rate movements on trading assets denominated in foreign currency against movements on redeemable share capital denominated in foreign currency. The election for this treatment must be made within three weeks of acquiring the relevant trading asset.

Inventories. Stock is normally valued at the lower of cost or net realizable value. Cost must be determined on a first-in, first-out (FIFO) basis or some approximation of FIFO; the last-in, first-out (LIFO) basis is not acceptable.

Provisions. General provisions and reserves are not allowable de­ductions. Some specific provisions and reserves, including reserves for specific bad debts, may be allowed. In general, provisions created in accordance with Financial Reporting Standard 12 are deductible for tax purposes.

Tax depreciation (capital allowances)

Plant and machinery. Capital expenditure on plant and machin­ery and motor vehicles in use at the end of an accounting period is written off at an annual straight-line rate of 12.5%.

The maximum qualifying expenditure for capital allowances on motor vehicles is EUR24,000. Capital allowances and leasing ex­pense deductions for new motor cars are granted by reference to carbon dioxide emissions. As a result, some vehicles do not qual­ify for capital allowances or leasing expense tax deductions.

An immediate 100% write-off is allowed for capital expenditure on oil and gas exploration, development and abandonment, in – curred under a license issued by the Minister for Energy. An im – mediate 100% write-off is also allowed for certain energy-efficient equipment.

On the disposal of plant and machinery, a balancing charge or allow ance applies, depending on the amount received on disposal compared with the written-down value of the asset. Balancing charges are not imposed with respect to plant and machinery if the proceeds from the disposal are less than EUR2,000.

Computer software. If a company carrying on a trade incurs capital expenditure on the acquisition of software or a right to use software in that trade, the right and related software is regarded as plant or machinery and qualifies for capital allowances over eight years. Some computer software may qualify for tax depre­ciation under the intangible assets regime (see Intangible assets).

Patent rights. A company incurring capital expenditure on the purchase of patent rights for use in a trade may be entitled to writing-down allowances. Relief is given over 17 years or the life of the patent rights, whichever is the shorter. Ongoing patent roy­alties are typically deductible when paid (see information regard­ing charges in Interest payments). The allowances are available for expenditure incurred before 7 May 2011. See Intangible assets for relief available on expenditure incurred on or after this date.

Immovable property. The basic annual rate is 4% for industrial buildings. Capital expenditure incurred on hotels on or after 4 December 2002 is written off over 25 years (previously 7 years). Transitional measures applied to certain approved projects if the expenditure was incurred on or before 31 December 2006, and reduced rates applied in certain circumstances if the expenditure was incurred in the period 1 January 2007 through 31 July 2008.

Urban renewal schemes. Property-based tax incentives in urban renewal areas may be available for expenditure incurred before 31 July 2008. The reliefs include accelerated capital allowances for commercial and industrial buildings.

Telecommunication infrastructure. Capital allowances are avail­able for capital expenditure incurred on the purchase of rights to use advanced telecommunication infrastructure. These intangible rights typically extend from 10 to 25 years. They are usually pur­chased with an upfront lump-sum payment. The expenditure in curred by a company on such rights may be written off over the life of the agreement relating to the use of the rights, with a mini­mum period of seven years.

Other. Capital allowances are also available on expenditure in cur-red for scientific research, dredging, mining development, ships, agricultural buildings, airport buildings, runways, and petroleum exploration, development and production. Capital allowances for expenditure incurred on private hospitals and private nursing homes are being phased out.

Intangible assets. Capital allowances are available on a broad range of specified intangible assets acquired on or after 8 May 2009. Capital allowances are available for expenditure incurred on many types of intangible assets including, but not limited to, customer lists, brands, trademarks, patents, copyrights, designs, know-how, some computer software, pharmaceutical authoriza­tions and related rights, licenses and attributable goodwill.

Relief is generally granted in line with book depreciation and is claimed on the annual tax return.

However, the company can elect for a 15-year write-off period, which is useful if intangible assets are not depreciated for book purposes. This election is made on an asset-by-asset basis.

The aggregate amount of allowances and related interest expense that may be claimed for any accounting period is capped at 100% of the trading income of the relevant trade for that period (excluding such allowances and interest). Excess allowances can be carried forward indefinitely against income of the same trade.

Allowances granted are clawed back if the asset is sold within a five-year period.

Patent rights and know-how. For acquisitions before 6 May 2011, allowances for acquired patent rights were granted over the shorter of 17 years or the duration of acquired rights. Certain know-how was deductible in full in the year of acquisition. After that date, relief must be claimed under the new intangible asset regime (see Intangible assets).

Research and development expenditures. A corporation tax credit of 25% is available for qualifying research and development (R&D) expenditure incurred by companies for R&D activities carried on in EEA countries. This credit is granted in addition to any existing deduction or capital allowances for R&D expendi­ture. As a result of this credit, companies may enjoy an effective benefit of up to 37.5% of R&D expenditure.

R&D credits that cannot be used in an accounting period can be carried forward indefinitely to future accounting periods. Excess R&D credits can be carried back against corporation tax paid in the immediately preceding accounting period. Any remaining ex­cess credits may be refunded over a three-year period. This en – hancement of the R&D credit regime represents a significant cash-flow opportunity for loss-making companies. However, a 12-month time limit for R&D claims applies. All R&D claims must be made within 12 months after the end of the accounting period in which the R&D expenditure giving rise to the claim is incurred.

A reward scheme allows companies to use all or part of the R&D credit to reward key employees.

Film credit. Amendments to the provisions relating to relief for investment in qualifying films (Section 481 relief) were intro­duced in 2015. The principle of relief for investors in films is replaced with a tax credit system for producer companies. The film corporation tax credit of 32% applies against the corpora­tion tax liability of the producer company. Any excess is available for pay ment to the producer company. Detailed certification rules and conditions apply.

Relief for losses. Trading losses and charges incurred by a com­pany in an accounting period in a trading activity that is not subject to the 25% corporation tax rate (effectively most trades) can be offset only against profits of that accounting period or the preced­ing accounting period to the extent that the profits consist of trad­ing income subject to the 12.5% rate. Any unused trading losses may be carried forward to offset future trading income derived from the same trade.

Relief may be available through a reduction of corporation tax on a value basis. For example, in 2016, when the standard corpora­tion tax rate on trading income is 12.5%, 12.5% of the trading loss may be offset against the corporation tax liability of a com­pany with respect to profits from all sources. The full amount of the trading loss that is so utilized is regarded as being used up for purposes of calculating losses that may be carried forward. In effect, a company needs trading losses equal to twice the amount of its passive income to eliminate its tax liability on such income.

Terminal loss relief may be available if a company incurs a loss in its last 12 months of trading. This relief allows such losses to be carried back against income of the same trade in the preceding three years.

Groups of companies. Certain tax reliefs are available to a group of companies that meet the following requirements:

  • The group companies have a minimum share relationship of 75%.
  • The parent company is entitled to 75% of distributable profits.
  • The parent company is entitled to 75% of assets available for distribution on a winding up.

Such companies may transfer surplus losses and excess charges on income. Surplus losses of companies owned by a consortium may also be transferred.

Group and consortium relief are available if all of the companies in the group or consortium are resident in an EEA member coun­try (except Liechtenstein). Loss relief was historically restricted to losses incurred in a business carried on by a company subject to Irish corporation tax. However, group relief is now available for certain “trapped” trading losses incurred by non-Irish 75% subsidiaries resident in an EEA country (except Liechtenstein). Losses that can be used elsewhere are ineligible for surrender.

For accounting periods ending on or after 1 January 2012, group relief provisions are extended so that losses can be transferred between two Irish resident companies if both companies are part of a 75% group involving companies that are tax resident in an EU or tax treaty country, or quoted on a recognized stock exchange. Effective from 1 January 2013, in determining whether a com­pany is a 75% subsidiary of another company for the purpose of group relief (losses), the parent is no longer regarded as owning any shares that it owns directly or indirectly in a company that is not resident for tax purposes in a relevant territory. This effec­tively means that losses may not be surrendered if a company resident in a state that has not entered into a double tax treaty with Ireland is between a claimant and a surrendering company in the group structure.

The National Asset Management Agency Act 2009 provides for a limited form of loss surrender between certain financial institu­tions in the same group with respect to excess losses carried forward from earlier periods for which the surrendering financial institution cannot obtain relief.

In a 75% group, assets may be transferred without generating a chargeable gain. An asset retains its tax value while it is held with­in the group. The tax value is generally based on original cost; for assets acquired before 6 April 1974, the tax value is computed with reference to the market value on that date. If an asset is trans­ferred to a company that leaves the group within 10 years after the transaction, that company is deemed to have disposed of and immediately reacquired the asset at its market value at the time of its acquisition, effectively crystallizing the deferred gain.

A nonresident company that is resident in an EEA country (except Liechtenstein) may be taken into account in determining whether a group exists for chargeable gains purposes. An Irish branch of a company resident in an EEA country (except Liechtenstein) that is a member of a group may transfer assets to another mem­ber of a group on a tax-neutral basis. Any gain arising on the transfer is not taxable until the asset is sold outside the group. To qualify for such relief, the following conditions must be satisfied:

  • Each of the companies in the group must be resident in Ireland or in an EEA country (except Liechtenstein).
  • Any companies not resident in Ireland must be carrying on a trade in Ireland through a branch.
  • The transferred asset must be a chargeable asset for corporation tax purposes in Ireland.

Dividends paid between Irish resident companies are not subject to DWT (see Section B) if the appropriate declarations are made. However, a 51% subsidiary resident in Ireland may pay dividends free of DWT without the parent company making a formal dec­laration to the subsidiary that it is an Irish resident company. Withholding tax is not imposed on interest and royalty payments between members of a 51% group.

Other significant taxes

The following table summarizes other significant taxes.

Nature of tax Rate (%)
Value-added tax, on any supply of goods or services, other than an exempt supply made in or deemed to be made in Ireland, and on imports from other than EU member states at the point of entry
Standard rate 23
Other rates 0 / 4.8 / 5.2 / 9 / 13.5
Stamp duty, on certain documents (maximum
Local property tax (residential property);
assessed on the midpoint value of
valuation bands
Market value less than EUR1 million 0.18
Market value greater than EUR1 million
First EUR1 million 0.18
Balance 0.25
Pay-related social insurance (PRSI) (for the
period ending 31 December 2016), on
employees’ salaries; paid by
For employees earning a weekly salary of
more than EUR356; on each employee’s
salary without limit
For employees earning a weekly salary of
EUR356 or less
PRSI; on annual salary 4
Universal Social Charge (USC)
Annual salary of up to EUR12,012
(exempt if income is less than EUR13,000)
Annual salary of EUR12,013 to EUR18,668 3
Annual salary of EUR18,669 to EUR70,044 5.5
Annual salary in excess of EUR70,044 8
(A 3% rate applies to individuals over 70 years
old who hold a full medical card and whose
aggregate income for the year is less that EUR60,000.)

Miscellaneous matters

Foreign-exchange controls. Foreign-exchange controls are not imposed, except in very limited circumstances at the discretion of the Minister for Finance. For example, the minister may impose foreign-exchange controls to comply with EU law or a United Nations resolution.

Debt-to-equity ratios. No thin-capitalization rules exist, but inter­est payments to 75%-nonresident affiliated companies may be treat ed as distributions of profit and consequently are not de duct-ible (for details regarding this rule, see Section C).

Controlled foreign companies. No controlled foreign company (CFC) rules exist in Ireland.

Anti-avoidance rule. A general anti-avoidance rule (GAAR) em­powers the Revenue Commissioners to reclassify a “tax avoid­ance” transaction in order to remove a tax advantage resulting from such transaction. An additional surcharge equal to 30% (20% for transactions begun on or before 23 October 2014) of the underpayment can be imposed if the Revenue Commissioners deny a tax advantage and if the taxpayer had not made a “protec­tive notification” of the “tax avoidance” transaction to the Reve­nue within 90 days after the beginning of the transaction.

Transfer pricing. Transfer-pricing legislation in Ireland is effective from 1 January 2011. The rules apply to any arrangement be­tween associated enterprises if the transaction meets the defini­tion of an Irish trading transaction for one or both of the parties. For the purposes of determining an arm’s-length price, the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations are adopted. Sufficient records must be main­tained to support an arm’s-length price. OECD-style documenta­tion is sufficient.

Grandfathering provisions apply to transactions for which the terms were agreed on before 1 July 2010. Exemptions from the rules are available for small and medium-sized enterprises, which are companies with fewer than 250 employees and turnover of less than EUR50 million or assets of less than EUR43 million.

Country-by-Country Reporting. The 2015 Finance Act introduc­ed Country-by-Country Reporting compliant with the OECD’s recommendations. For accounting periods beginning on or after 1 Jan uary 2016, Irish-headquartered companies must file a Country-by-Country Report with the Irish Revenue within 12 months after the end of their accounting period. Groups with annual consolidated group revenue in the immediately preced­ing accounting period of less than EUR750 million are exempt from this reporting requirement.

Construction operations. Special withholding tax rules apply to payments made by principal contractors to subcontractors with respect to relevant contracts in the construction, forestry and meat-processing industries. Under these rules, principal contrac­tors must withhold tax from certain payments. Under this elec­tronic system (within which all relevant contracts must be regis­tered), withholding rates of 0%, 20% and 35% apply. If sub­contractors are not registered with the Revenue or if serious compliance issues that need to be addressed exist, the rate is 35%. All other subcontractors should qualify for the 20% rate.

Treaty withholding tax rates

The rates reflect the lower of the treaty rate and the rate under domestic tax law.

  Dividends (a)


Interest (b)


Royalties (c)


Albania 0 7 (e) 0/7
Armenia 0 0/5/10 (g) 0/5
Australia 0 0/10 0/10
Austria 0 0 0
Bahrain 0 0 (b) 0
Belarus 0 0/5 (e) 0/5
Belgium 0 0/15 (m) 0
Bosnia and Herzegovina 0 0 0
Bulgaria 0 0/5 (e)(m) 0/10 (m)
Canada 0 0/10 (l) 0/10 (d)
Chile 0 0/5/15 0/5/10 (f)


China 0 0/10 (e) 0/6/10 (j)
Croatia 0 0 0
Cyprus 0 0 0
Czech Republic 0 0 0/10 (m)
Denmark 0 0 0
Egypt 0 0/10 0/10
Estonia 0 0/10 (e)(m) 0/5/10 (f)(m)
Finland 0 0 0
France 0 0 0
Georgia 0 0 0
Germany 0 0 0
Greece 0 0/5 (m) 0/5 (m)
Hong Kong SAR 0 0/10 (e) 0/3
Hungary 0 0 0
Iceland 0 0 0/10
India 0 0/10 (e) 0/10
Israel 0 0/10 0/10
Italy 0 0/10 (m) 0
Japan 0 0/10 0/10
Korea (South) 0 0 0
Kuwait 0 0 0/5
Latvia 0 0/10 (m) 0/5/10 (f)(m)
Lithuania 0 0/10 (m) 0/5/10 (f)(m)
Luxembourg 0 0 0
Macedonia 0 0 0
Malaysia 0 0/10 0/8
Malta 0 0 (m) 0/5 (m)
Mexico 0 0/5/10 (g) 0/10
Moldova 0 0/5 (e) 0/5
Morocco 0 0/10 (e) 0/10
Montenegro 0 0/10 (e) 0/5/10 (q)
Netherlands 0 0 0
New Zealand 0 0/10 0/10
Norway 0 0 0
Pakistan 0 0 0
Panama 0 0/5 (e) 0/5
Poland 0 0/10 (m) 0/10 (m)
Portugal 0 0/15 (m) 0/10 (m)
Qatar 0 0 0/5
Romania 0 0/3 (i)(m) 0/3 (h)(m)
Russian Federation 0 0 0
Saudi Arabia 0 0 0/5/8 (r)
Serbia 0 0/10 (e) 0/5/10 (q)
Singapore 0 0/5 (e) 0/5
Slovak Republic 0 0 0/10 (h)(m)
Slovenia 0 0/5 (e)(m) 0/5 (m)
South Africa 0 0 0
Spain 0 0 0/5/8/10 (m)
Sweden 0 0 0
Switzerland 0 0 0
Thailand 0 0/10/15 (s) 0/5/10/15 (t)
Turkey 0 0/10/15 (n) 0/10
Ukraine 0 0/5/10 (u) 0/5/10 (v)
United Arab Emirates 0 0 0
United Kingdom 0 0 0


United States 0 0 0
Uzbekistan 0 0/5 0/5
Vietnam 0 0/10 0/5/10/15 (k)
Zambia (y) 0 0/10 (w) 0/8/10 (x)
Non-treaty countries 0/20 (o)(p) 20 (b)(p) 0/20 (c)
    a) Withholding tax at a rate of 20% applies to dividends distributed on or after 6 April 2001. The table assumes that the recipient of the dividends is not a company controlled by Irish residents (that is, the domestic measure provid­ing that DWT is not imposed on payments to residents of treaty countries applies). If domestic law allows the imposition of DWT, a refund of the DWT may be obtained under the terms of an applicable tax treaty.
    b) Interest is generally exempt from withholding tax if it is paid by a company or investment undertaking in the ordinary course of its business to a company resident in an EU member country or a country with which Ireland has en­tered into a tax treaty. However, this exemption may be unavailable if the re­cipient is resident in a country that does not generally impose a tax on interest received from foreign sources.
    c) Under Irish domestic law, withholding tax on royalties applies only to patent royalties and to other payments regarded as “annual payments” under Irish law. The Irish Revenue has confirmed that withholding tax need not be deducted from royalties paid to nonresidents with respect to foreign patents (subject to conditions). Effective from 4 February 2010, withholding tax does not apply to patent royalties paid by a company in the course of a trade or business to a company resident in a treaty country that imposes a generally applicable tax on royalties received from foreign sources (subject to conditions).
    d) The normal withholding tax rate for royalties is 10%. However, the following royalties are exempt unless the recipient has a permanent establishment in Ireland and the income is derived there:
  • Copyright royalties and similar payments with respect to the production or reproduction of literary, dramatic, musical or artistic works (but not includ­ing royalties paid for motion picture films or for works on film or video­tape or other means of reproduction for use in connection with television broadcasting)
  • Royalties for the use of, or the right to use, computer software or patents or for information concerning industrial, commercial or scientific experience (but not including any such royalties in connection with rental or franchise agreements)

e) The 0% rate also applies in certain circumstances, such as if the interest is paid by, or received from, a central bank or local authority.

f) The 5% rate applies to royalties paid for the use of industrial, commercial or scientific equipment. The 10% rate applies to other royalties.

g) The 0% rate also applies in certain circumstances, such as if the interest is paid by or received from a central bank or local authority. The 5% rate applies if the beneficial owner of the interest is a bank. The 10% rate applies to other interest.

h) A 0% rate also applies to royalties for the use of copyrights of literary, artis­tic or scientific works, including motion pictures, film recordings on tape, other media used for radio or television broadcasting or other means of repro­duction or transmission.

i) The 0% rate also applies to interest paid to banks or financial institutions, interest paid on loans with a term of more than two years and interest paid in certain other circumstances.

j) The withholding tax rate for royalties is 10%, but only 60% of royalties for the use of, or the right to use, industrial, commercial or scientific equipment is taxable.

k) The 5% rate applies to royalties paid for the use of patents, designs or models, plans, secret formulas or processes or for information concerning industrial or scientific experience. The 10% rate applies to royalties paid for the use of trademarks or information concerning commercial experience. The 15% rate applies to other royalties.

l) The normal withholding tax rate for interest is 10%, but a 0% rate applies in certain circumstances.

m) Ireland has implemented Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between 25%-associated companies of different EU member states. The 2005 Finance Act extended these benefits to Switzerland. If the directive applies, the withholding tax rate is reduced to 0%.

n) The 10% rate applies to interest paid with respect to a loan or other debt claim for a period exceeding two years or interest paid to a financial institution.

o) Irish domestic law may provide for an exemption from DWT under certain circumstances (see Section B).

p) Ireland has signed a full double tax treaty with Botswana, but this treaty is not yet in force. However, certain withholding tax exemptions that are available to treaty countries under Irish domestic law (see footnotes [a] and [b]) may be extended to residents of Botswana and to residents of any other countries with which Ireland signs a double tax treaty (beginning on the date of signing of such agreement), subject to conditions.

q) The 5% rate applies to royalties paid for the use of, or the right to use, copy­rights of literary, artistic or scientific works. The 10% rate applies to royalties paid for the use of, or the right to use, patents, trademarks, designs or models, plans, secret formulas or processes, computer software, industrial, commer­cial or scientific equipment or information concerning industrial, commercial or scientific experience.

r) The 5% rate applies to royalties paid for the use of, or the right to use, in­dustrial, commercial or scientific equipment. The 8% rate applies to other royalties.

s) The 10% rate applies if the interest is beneficially owned by a financial insti­tution or if it is beneficially owned by a resident of the other contracting state and is paid with respect to indebtedness arising from a sale on credit by a resident of that other state of equipment, merchandise or services, unless the sale is between persons not dealing with each other at arm’s length. The 15% rate applies to interest in other cases.

t) The 5% rate applies to the right to use copyrights of literary, artistic or scien­tific works. The 10% rate applies to the use of, or the right to use, industrial, commercial or scientific equipment, or patents. The 15% rate applies to the use of, or the right to use, trademarks, designs or models, plans, secret for­mulas or processes and to information concerning industrial, commercial or scientific experience.

u) The 10% rate applies if the interest is beneficially owned by a resident of other contracting state. The 5% rate applies to interest paid in connection with the sale on credit of industrial, commercial or scientific equipment, or on loans granted by banks.

v) The 5% rate applies with respect to copyrights of scientific works, patents, trademarks, secret formulas or processes or information concerning indus­trial, commercial or scientific experience.

w) The 10% rate applies if the interest is beneficially owned by a resident of the other contacting state.

x) The 8% rate applies to royalties with respect to copyrights of scientific works, patents, trademarks, designs or models plans, secret formulas or pro­cesses, or information concerning industrial commercial or scientific experi­ence.

y) These are the rates under a revised treaty between Ireland and Zambia.

Ireland has entered into limited double tax agreements with Guernsey, the Isle of Man and Jersey, which do not provide for reductions in withholding taxes.

Ireland has completed the ratification procedures for new double tax treaties with Botswana and Ethiopia.

A new treaty to replace the existing treaty with Pakistan has been signed. According to the Irish Revenue, negotiations for double tax treaties with Azerbaijan and Turkmenistan have been con­cluded.

Negotiations for a protocol to the existing double tax treaty with South Africa are ongoing.

Negotiations for a protocol to the existing double tax treaty with Mexico have concluded, and the protocol is expected to be signed shortly. The existing treaty with the Netherlands is also in the process of renegotiation.

Ireland is negotiating double tax treaties with Azerbaijan, Ghana, Kazakhstan and Turkmenistan.