Ireland

Corporation tax is chargeable as follows on income and capital gains:

Resident companies are taxable in Ireland on their worldwide profits (including gains). Non-resident companies are subject to Irish corporation tax only on the trading profits of an Irish branch or agency and to Irish income tax (generally by way of withholding) on certain Irish-source income.

Non-trading (passive) income includes dividends from companies tax resident outside Ireland (with some exceptions), interest, rents, and royalties. Legislation provides that certain dividend income (e.g. income from foreign trades) is taxed at 12.5% (see the Income determination section). The higher rate (i.e. 25%) also applies to income from a business carried on wholly outside Ireland and to income from land dealing, mining, and petroleum extraction operations.

An additional ‘profit resource rent’ tax applies to certain petroleum activities. Depending on the profit yield of a site, the tax rate applicable can range from 25% to 40%.

Close companies (see the Income determination section) may be subject to additional corporate taxes on undistributed investment income (including Irish dividends) and on undistributed income from professional services. Examples of professional services include professions such as solicitor, accountant, doctor, and engineer.

Pillar Two 

Ireland has legislated for the Pillar Two rules with effect from 1 January 2024 for the Income Inclusion Rule (“IIR”) and 1 January 2025 for the Under Taxed Profits Rule (“UTPR”).

Pillar Two aims to ensure that in-scope businesses (those with consolidated group revenues of €750m or more in at least two of the four preceding fiscal years) pay at least a 15% effective tax rate on their profits in each jurisdiction they operate in. The Irish Pillar Two legislation is derived from the OECD model rules and the EU Directive. The rules are further supplemented through the OECD guidance. The guidance issued to date is referenced in the legislation (including the most recently released administrative guidance in December 2023). 

The rules adopted in Irish Pillar Two legislation, which are derived from OECD Administrative Guidance include the following provisions (not an exhaustive list):

• Transitional Country-by-country reporting (CbCR) safe harbour

• Qualifying Domestic Top-Up Tax (QDMTT) safe harbour

• Undertaxed Profits Rule safe harbour; and

• Qualifying Domestic Top-Up Tax

Ireland has implemented a QDTT via a short legislative provision linked very closely to the IIR and UTPR sections of the legislation. One key aspect of the Irish QDTT is that, where certain conditions are met, the QDTT is calculated using a local financial accounting standard and local financial accounts rather than the UPEs financial accounting standard used in the consolidated financial statements.

Local income taxes

Ireland does not levy local or regional taxes on income.