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The Minister for Finance, Public Expenditure and Reform Paschal Donohoe T.D delivered his first Budget today, on 10th October 2017, which concentrated more on expenditure than on tax changes.


The Minister announced a number of positive measures to assist small and medium sized enterprises prepare for “Brexit” as well as confirming Ireland’s commitment to the 12½% corporation tax rate.


We are pleased to bring you our summary of the tax measures set out in Budget 2018.





Universal Social Charge

The USC has been cut for lower and middle income earners.


The 2.5% USC rate has been reduced by 0.5% to 2% and the band has been increased to €19,372 from €18,772 which will benefit employees earning the minimum wage.


The 5% USC rate has been reduced by 0.25% to 4.75%


Medical card holders and individuals aged 70 years and over whose combined income does not exceed €60,000 per annum will only be liable to pay a maximum USC rate of 2%.


For self-employed individuals with income of over €100,000 the 11% rate will continue to apply



Income Tax

The higher or marginal tax rate will remain at 40% for 2018.


The income tax standard rate band, however, will be increased by €750 to €34,550 i.e. the entry point at which the 40% income tax rate applies has been increased from €33,800 to €34,550 for a single person and from €42,800 to €43,550 for married couples with one income.


The marginal rate of tax for individuals earning between €34,551 and €70,044 will be 48.75%.


The marginal rate of tax for individuals earning in excess of €70,044 will remain at 52% for employees.


The marginal rate of tax for self-employed individuals earning in excess of €100,000 will remain at 55%.



Earned Income Credit

For self-employed individuals, the earned income tax credit will increase by €200 to €1,150.


No reference was made in today’s Budget speech as to when future increases to this tax credit would arise to bring it in line with the PAYE Tax Credit of €1,650.



Home Carer Tax Credit

The Home Carer Tax Credit will increase by €100 from €1,100 to €1,200.


The €7,200 income threshold remains


This tax credit can be claimed by a jointly-assessed couple where a spouse/civil partner cares for one or more dependents regardless of the number of individuals cared for.



Deposit Interest Retention Tax (DIRT)

The rate for Deposit Interest Retention Tax for 2018 will be charged at 37%.




The National Training Fund Levy will be increased over the next three years and will apply to employees under Classes A and H by increasing Employer’s PRSI as follows:


a)      10.85% in 2018

b)      10.95% in 2019

c)      11.05% in 2020



Mortgage interest relief 

Mortgage Interest Relief for residential property owners which was scheduled to be abolished from the end of this year will continue until 2020.


This relates to home owners who took out qualifying mortgages between 2004 and 2012.


The relief will be reduced as follows:

a)      to 75% in 2018

b)      to 50% in 2019

c)      to 25% in 2020


Following a change in last year’s Finance Act, the amount of mortgage interest allowable against taxable rental income will increase to 85% with effect from 1st January 2018.  However, there was no reference, in today’s Budget speech, to the expected increase from 80% to 85% mortgage interest relief on rented residential property.


As you may remember, in Budget 2017, it had been announced that100% mortgage interest relief for rental properties would be restored on a phased basis by 2020.



 Deductibility of pre-letting expenses

Expenses incurred prior to the first letting of a property are not deductible against rental income, with a few exceptions.


Following today’s Budget, property owners who rent out residential properties which have been vacant for a period of twelve months or more will be entitled to a tax deduction of up to €5,000 per property.


These expenses must be revenue in nature and not capital expenditure.


The relief will be subject to a clawback of the property is withdrawn from the rental market within a four year period.


This relief will be available for qualifying expenditure between now and the end of 2021.



Benefit-in-kind on motor vehicles

The minister announced a number of measures to incentivise the purchase of electric cars including:

a)      a 0% rate of Benefit-in-Kind for electric cars and the electricity used at to charge these vehicles while at work.

b)      a VRT Relief measure





No changes were announced to the CAT tax-free thresholds in the Budget.





No changes were announced to CGT rates in the Budget.


Seven Year Exemption

The Minister relaxed the “Seven Year Exemption” which applied to land or buildings purchased between 7th December and 31st December 2014.


Disposals of qualifying assets between years four and seven will now qualify for the full Capital Gains Tax Exemption





VAT Compensation Scheme

A VAT refund scheme was introduced in order to compensate charities for input VAT incurred on expenditure.


This scheme will take effect from 1st January 2018 but will be paid one year in arrears. In other words charities will be entitled to claim an input VAT credit in 2019 in relation to expenses incurred in 2018.


Charities will be entitled to a refund of a proportion of their VAT costs based on the level of non-public funding they receive.


The Minister also confirmed that a capped fund of €5 million will be available to fund the scheme in 2019.


For further information please visit:



9% VAT Rate

The reduced VAT rate of 9% for goods and services, mainly related to the tourism and hospitality industry, has been retained.



VAT on Sunbed Sessions

 In line with the Irish Government’s National Cancer Strategy, the VAT rate on sunbed services will increase from 13.5% to 23% from 1st January 2018.






Corporation tax rate

The government has made a firm commitment to retaining the 12½% Corporation Tax rate to attract foreign direct investment.



 Capital Allowances for Intangible Assets

The Minister confirmed that he would be limiting the amount of capital allowances that can be claimed for intangible assets.


A tax deduction for capital allowances under Section 291A TCA 1997 on intangible assets and any associated interest cost will now be limited to 80% of the relevant income arising from the intangible asset in the accounting period from midnight of 10th October 2017.



Key Employee Engagement Programme (KEEP)

The Minister announced plans for a new share based remuneration incentive for unquoted SME companies aimed at improving the ability of SMEs to attract and retain key staff.


This incentive will be available for qualifying KEEP share options granted between 1st January 2018 and 31st December 2023.


No income tax, PRSI or USC will be charged on the exercise of the share options. Instead gains from exercising these share options will only be liable to CGT @ 33%.


The tax becomes payable when the shares are sold.


State Aid approval will be required to introduce this scheme.



Accelerated capital allowances for expenditure on energy-efficient equipment

Following a review of the accelerated capital allowances scheme for energy efficient equipment, the current scheme is being extended for a further three years to the end of 2020.





Stamp Duty on commercial property

The rate of stamp duty on commercial property transactions will have increased from 2% to 6% with effect from midnight of 10th October 2017.


A stamp duty refund scheme is also being introduced for commercial land acquired for the development of housing, on condition that the development must begin within 30 months of the purchase of the land.


It is expected that further details of the relief and the conditions will be outlined in the Finance Bill.





Stamp duty

The Stamp duty rate of 1% remains for inter-family farm transfers for a further three years.


The Stamp Duty exemption for Young Trained Farmers on agricultural land transactions will also be retained.


Leasing land for solar panels

The leasing of agricultural land for the use of solar panels will continue to be classified as agricultural land for the purposes of the CAT Agricultural Relief and the CGT Retirement Relief providing the solar panel infrastructure does not exceed 50% of the total land holding..





Brexit Loan Scheme 

A new Brexit Loan Scheme has been announced. A loan scheme of up to €300 million will be available at competitive rates to SMEs to assist them with their short-term working capital needs, with particular attention given to food industry businesses.


Details of this scheme will be provided by the Tánaiste and Minister for Business, Enterprise and Innovation, and the Minister for Agriculture, Food and the Marine.


Plans were also announced to hire over 40 additional staff across the Department of Business, Enterprise and Innovation and enterprise agencies in 2018 to respond to the issues arising from Brexit.



Increased funding

The Minister announced increased funding of €64 million to support the agri-sector. Of this, a further €25 million is to be provided to the Minister for Agriculture, Food and the Marine to develop further Brexit loan schemes for the agri-food sector in addition to the loan scheme discussed above.





Sugar Tax

 From 1st April 2018 two rates of tax on sugar-sweetened drinks will be introduced subject to State Aid approval.


The first will apply at a rate of 30 cent per litre where the sugar content is above 8g per 100ml.


The second rate of 20 cent per litre will apply where the sugar content is between 5g and 8g per 100ml.


Drinks with less than five grams of sugar won’t attract a sugar tax.



Vacant site levy

The vacant site levy has been increased from the current 3% levy in the first year to 7% in second and subsequent years to encourage land owners to develop vacant sites rather than “hoarding” land.


The vacant site levy is due to come into effect in 2018.


An owner of a property on a vacant site register who does not develop their land in 2018 will be liable to the 3% levy in 2019 and a further 7% levy in 2020 and each year thereafter until the land is developed.


From 1st January 2017, each local authority is obliged to maintain a register of vacant sites to include on the register, details of any site, which they believe, has been vacant for the previous twelve month period.





Taxation of Rental Income in Ireland

House for Rent

What is Rental Income?

According to the Revenue’s website, Rental income includes:

  • “the renting out of a house, flat, apartment, office or farmland.
  • payments you receive for allowing advertising signs or communication transmitters to be put up on your property
  • payments you receive for allowing a right of way through your property
  • payments you receive for allowing sporting rights such as fishing or shooting rights on your property
  • payments you receive from your tenant to cover the cost of work to your rental property. Your tenant must not be required to pay for this work per the lease
  • certain lease premiums, as well as deemed and reverse premiums
  • Conacre lettings
  • service charges for services connected to the occupation of the property
  • payments from insurance policies that cover against the non-payment of rent.”



What about Local Property Tax?

According to Revenue, LPT is not a deductible expense against rental income under Section 97 TCA 1997.


According to the Thornhill Group, for Income Tax and Corporation Tax purposes, Local Property Tax should be deductible in a similar manner to commercial rates.  Despite the fact that the Government has accepted this recommendation in principle no further details of when and how this deduction will take effect have been made available.



What is liable to Tax? 

The net profit arising from a rental property is taxed at an individual’s marginal rate of tax being Income Tax plus PRSI plus Universal Social Charge.


In other words, tax is charged on the gross rents receivable less a deduction for all allowable expenses.


It is important to remember that a profit or loss computation must be carried out for each source of rental income.


The rental income on which tax is levied equals the total rental profits less the total losses from all rental sources combined.


Deductions in arriving at net profit include:

  • Rates,
  • Management Fees,
  • Repairs & Maintenance
  • Ground Rents
  • Certain Mortgage Protection Policy Premiums
  • Insurance,
  • Legal, Accountancy and Advertising Fees,
  • The cost of services provided that weren’t repaid by the tenant including electricity, water charges, refuse charges, etc.
  • Wear & Tear on Furniture and Fittings, etc.


A deduction is also available for interest on monies borrowed for the purchase, or repair of the rental property.


For rented residential property, the allowable mortgage interest relief is restricted to 75% for the 2016 year of assessment and is dependent on the landlord registering the tenancy with the Residential Tenancy Board.


For the 2017 tax year, the mortgage interest deduction has increased from 75% to 80%.


The deductible amount will be increased by 5% every year from then on so that by 2021 100% of the mortgage interest will be deductable against the rental income received from qualifying residential lettings.  In other words, the allowable rate will be 85% in 2018, 90% in 2019, 95% in 2020 and 100% in 2021.


The landlord may be able to claim 100% mortgage interest relief. To qualify he/she must:

a)       rent out the residential property for three years to tenants receiving certain social housing supports and

b)       be registered with the Private Residential Tenancies Board (RTB)


In situations where the rented residential property was purchased from the taxpayer’s spouse or civil partner, the interest will not be allowed as a deduction in computing the rental profits. This measure is aimed at preventing married couples and civil partners from generating interest by selling properties to each other and borrowing the necessary funds to do so.



How are Irish Rental Losses Treated?

In situations where a rental loss arises, it can be offset against the rental profit from another property.  If there are insufficient profits for offset then it can be carried forward against future rental profits only.


The order of offset is very important.  The landlord must use Capital Allowances first before offsetting the rental losses carried forward from an earlier year and it is not possible to carry rental losses back to a preceding tax year.


It is not possible to offset rental losses made by one spouse or civil partner against the rental profits of the other.


Losses arising from uneconomic rentals cannot be offset against other rental profits. Uneconomic rentals are defined as those where the expenses will always exceed the income of a particular rental source.


It is not possible to offset rental losses against income generated from other sources including salary, trade income, dividends, deposit interest, etc.


Please keep in mind that foreign rental losses can only be written off against foreign rental income.



What about Pre-Letting Expenses?

The general rule in tax legislation is that any expense incurred prior to the first letting of a rental property is not allowable. The reason being, that such expenses are not deemed to be expenses that relate to a particular lease.  Therefore expenses incurred on buying furniture, painting and decorating the property, etc. before the first letting by its current owner and before the first occupancy by the tenant will not be allowable deductions.


There are, however, two exceptions based on the decision in Stephen Court Limited v Brown (HC 198/2 No 293 S.S.):

a)       Advertising or marketing costs connected with the first rental of the property and

b)       The legal costs incurred in drawing up the first tenancy lease for the rental property.




What is Rent-a-Room Relief?

If an individual rents a room or rooms in his/her sole or main residence and the gross income received does not exceed €12,000 for the 2016 year of assessment or €14,000 for 2017 onwards then no Income Tax, Universal Social Charge or Pay Related Social Insurance will be payable by that individual. In other words, if the rental income does not exceed the annual exemption limit in the year of assessment then the profit or loss arising on the rent will be deemed to be NIL.


Included in the annual exemption limits are payments from the renter/tenant for food, laundry or similar goods and services.


Where the income exceeds €12,000 in 2016 or €14,000 in 2017, the entire amount is taxable.


In situations where more than one individual is entitled to the rent, the annual exemption limit is divided between all the individuals concerned.


It is important to keep in mind that this relief is only available to individuals. In other words it does not apply to companies or partnerships which rent out residential properties.


This relief is available for both individuals who rent as well as individuals who own their own home.


Claiming Rent-a-Room Relief will not affect an individual’s entitlement to mortgage interest relief or Principal Private Residence Relief on the disposal of his/her sole or main residence.


Income from Rent-a-Room must be included in an individual’s annual Tax Return under “Exempt Income.”


The Rent-a-Room Relief will not apply where a child pays rent to a parent.


The Rent-a-Room Exemption is not compulsory.  An individual may elect to have any rental profits or losses from this source assessed under the normal Case V Schedule D rules for rental income.



Filing a Tax Return

All individuals in receipt of rental income must declare this information in his/her annual tax return on or before 31st October in the year following the year of assessment.


If the rental profit is less than €5,000 it can be declared through the Form 12.


If, on the other hand, the net rental income is over €5,000 the individual will be obliged to register for Income Tax and declare his/her rental income in a Form 11 under the self assessment rules.


Where the landlord is non-resident and in the absence of an Irish resident Agent, the tenant(s) should deduct tax from the rent at the standard rate and pay this tax over to Revenue.  The landlord will be entitled to a credit for the tax deducted by the tenant(s) and must file a Form R185 along with either a Form 11 or Form 12 depending on the amount of rental profit generated.


If, however, the landlord has engaged the services of a Tax Collection Agent in Ireland, this Irish resident individual will be responsible for filing the relevant tax return and submitting the appropriate tax payment on the landlord’s behalf.


image courtesy of mapichai @ freedigital photos 

Personal Taxes – Spain





The Spanish system has two types of Personal Income Tax:


  1. PIT for Spanish resident individuals and
  2. NRIT for individuals who are not resident in Spain


Spanish resident individuals are generally liable to PIT on their worldwide income wherever it arises.


Non-resident individuals are chargeable to NRIT on their Spanish source income only.





An individual is liable to Spanish tax based on his or her residence.


An individual is deemed to be Spanish resident if he or she spends more than 183 days in the tax year (i.e. the calendar year) in Spain or if the individual’s main centre of business or professional activities or economic interests is located in Spain.


It is important to bear in mind that temporary absences from Spain are ignored when calculating the number of days for the purposes of establishing residency except where tax residence in another jurisdiction can be proven.


Where the individual does not satisfy the above 183 day rule, he or she will not be considered Spanish tax resident for the calendar year in question and as a result, Spanish source income including capital gains will be liable to NRIT.


In situations where an individual may be deemed to be tax resident in two jurisdictions in the same tax year, it is essential that the individual consult the relevant Double Taxation Agreement to establish what relief or exemption from Spanish Tax may be available.


Generally speaking, the credit for Spanish tax withheld on foreign source income and capital gains tax will be the lower of:


a)      Actual foreign tax withheld on the foreign source income which is equivalent to the Spanish PIT or NRIT

b)      Average effective PIT rate applied to the foreign source income taxed in the other jurisdiction.






Individuals must file a Tax Return and pay the relevant taxes within six months of the end of the calendar year i.e. 30th June following the year end, being 31st December.


Married couples may elect to file their tax returns either jointly or separately.


There are strict filing deadlines for non-resident individuals.  Please be aware that there are no deadline extensions available.


There are a number of penalties to consider including:

a)      Penalties for the underpayment of taxes range from 50% to 150% of the unpaid tax liability.

b)      Penalties for the late payment of taxes range from 5% to 20% where such payments are made on a voluntary basis and not as part of an audit or investigation.

c)      Statutory Interest on late payments will also apply.




Individuals entering Spain from outside the E.U., as either employees or self employed individuals, must obtain a work and residence permit prior to commencing their self employed or employment activity in Spain.


The Work and Residence permits are issued for a twelve month period.


It is possible to renew this permit two months in advance of its expiry date and always advisable to do so before the permit has expired.


For individuals entering Spain from E.U. member states, there is no requirement to possess a Work and Residence Permit.


For E.U., EEA or Swiss individuals who wish to remain in Spain beyond a three month period, they are required to register with the Spanish Authorities and obtain the Central Registry for Foreigners Certificate.





For general taxable income received by Spanish resident individuals, progressive tax rates ranging from 19% to 48% are applied. These rates depend on the Autonomous Community in which the individual is deemed to be tax resident.  As a result, tax liabilities can vary from one autonomous region to another.


Dividends, Interest, Capital Gains and Savings Interest are taxed at the following rates:

  • 19% for the first € 6,000 of taxable income.
  • 21% for the following €6,000 up to €50,000 of taxable income.
  • 23% for income exceeding €50,000.




Non resident individuals are taxed at a flat rate of 24% on Spanish source income.  This rate is reduced to 19% for individuals who are tax resident in an EU member state or an EEA country with which there is an effective exchange of tax information treaty in place.


Income Tax is levied on the gross Spanish source income but there are no deductions or tax credits available for offset with the exception of certain expenses for E.U. tax resident individuals.


Investment income (i.e. Interest and dividends) arising for non resident individuals are liable to 19% tax although this figure may be reduced depending on the Double Taxation Treaties in place.  It is important to bear in mind that Interest for EU residents in tax exempt.


From 2016 onwards Capital gains will be taxed at 19% if arising from the transfer of assets.


Royalty income is liable to tax at 24%


Pensions are taxed at progressive rates ranging from 8% to 40%.





As a general rule, all employees working in Spain must be registered with the Spanish social security administration. The employer is obliged to make employer and employee contributions depending on the category of each employee and social security contributions are paid on salaries/wages.


The general contribution rate for employees is 6.35%.


The general contribution rate for employers is 29.9% in addition to a variable rate for general risk.


These rates depend on the activities engaged in by the companies as well as the employee’s employment and educational category.

Inbound assignees may continue to make social security contributions in their home countries in line with International Social Security Agreements and E.U. regulations and as a result claim an exemption from paying social security contributions in Spain.


To qualify for the exemption E.U. nationals must obtain the necessary official certification from the relevant Social Security Authorities in their country of origin.


There are three situations in which an exemption from Social Security in Spain may be claimed:

  1. In situations where a social security agreement between Spain and the individual’s country of origin exists which provides for such an exemption.


  1. Where the individual continues to be employed by an employer resident in the country of origin and as a result he/she continues to contribute to the social security system of his/her home country.


  1. Where the individual remains in Spain for between one and five years depending on the conditions of the social security agreement in place between Spain and that individual’s country of origin.




There are a number of alternatives open to individuals wishing to invest in Spain.  These include setting up a limited company or forming a branch / permanent establishment.


Due to the number of Irish clients with trading companies in Spain, we have prepared a general summary of the taxes arising.


This is not a full and comprehensive guide to Spanish taxes and does not provide detail on the local operation of taxes.  As a result, we would always advise anyone with Spanish interests to seek the advice and expertise of a local tax professional.




Corporate tax is levied on the income of companies and other separate legal entities.


Spanish resident entities are liable to tax on their worldwide income and not just on profits from activities carried on in Spain.


What is a Spanish resident entity?

  1.  A company which is incorporated in Spain shall be regarded for the purposes of Spanish Corporate Tax as being resident in Spain under Spanish law.
  2.  The location of central management and control in Spain may bring the entity into the Spanish Corporate Tax regime.  For example if the legal headquarters/registered offices of the company are located in Spain or if it is effectively managed from Spain then the corporate entity is deemed to be Spanish resident.
  3.  In the event of the legal entity being resident in a country where no taxation is levied on its profits or gains (i.e. a tax haven) then that entity is deemed to be Spanish tax resident if the following arise:

a)      The majority of the entity’s main assets are located in Spain.

b)      The entity’s principal business activity is carried out in Spain.

c)      The strategic control is exercised in Spain


It is important to keep in mind that the above point (i.e. number 3) will not apply if the entity exercises its management and control in another country providing it does so for bona fide commercial reasons and not for the purposes of managing securities or other assets.




Non-resident companies and entities are only liable to Corporate Tax on their Spanish income arising from business operations carried out by a Permanent Establishment within the jurisdiction (See Article 5 of the Ireland/Spain Double Taxation Agreement for a definition of Permanent Establishment).

It is important to be aware that a “Fiscal Representative” must be appointed by a non-resident individual or company to correctly handle all tax affairs when carrying out commercial activities in Spain.





Corporate Tax

25% is the general tax rate for residents as well as non-residents carrying out commercial activities in Spain through a “Permanent Establishment.” Other tax rates may apply, however, depending on the type of company and the type of business carried out.

Where foreign companies have permanent establishments in Spain, Non-Resident Income Tax of 25% is chargeable on the income arising to the Permanent Establishment.

A reduced rate of 15% applies to newly incorporated entities set up on or after 1st January 2015.  This preferential rate applies to the first two years of operation providing a taxable profit arose in the first tax period.


This start up rate of 15% does not apply in the following situations:

  1. Where the trade/business was carried on previously by a related entity.
  2.  Where the newly created company belongs to a Group of Companies.
  3.  Where the company is considered, by law, to be an equity company.


For new companies set up prior to 1st January 2015 they will be taxed at 15% on their tax base up to €300,000 with 20% tax being levied on any excess amounts.  This will apply for the first two tax periods.


Without a Permanent Establishment

When dealing with non-residents operating in Spain without a permanent establishment, but who are resident in another EU or EEA state with which there is an Information Exchange Agreement in place, a distinction should be made between an individual and a corporate entity.

The tax rate applicable in the above situation is 19% and the tax deductible expenses are calculated in line with Personal Income Tax and Corporate Income Tax legislation.


In all other situations, the general rule is that non-residents operating in Spain without a permanent establishment are taxable at a rate of 24%.



Capital Duty

A 1% Capital Duty is payable by the shareholders on the dissolution of a company or on a reduction in its share capital.



Dividends, Interest and Royalties

 Dividends paid to non-residents are liable to a 19% Withholding Tax unless a lower rate applies under a relevant Double Taxation Agreement.

It is also possible for an exemption to apply under the EU Parent Subsidiary Directive.  Distributions paid to E.U. parent companies by Spanish subsidiaries are exempt from withholding tax provided the parent company held, either directly or indirectly, at least a 5% holding in the subsidiary company for a continuous period of twelve months in addition to satisfying other conditions.

Anti-Avoidance legislation exists where the ultimate shareholder in not E.U. resident.

Following an amendment in the Spanish Personal Income Tax Legislation, a share premium distribution paid to a non-resident shareholder may now be treated as a dividend distribution liable to withholding tax under the general rules.

Interest paid to a non-resident including a non-resident individual is liable to 19% withholding tax unless a lower rate applies under the relevant Double Taxation Treaty.

Interest income is exempt from tax if the recipient is a resident of an E.U. member state or an E.U. Permanent Establishment of an E.U. resident company which is not deemed to be a tax haven.

Royalties paid to non-residents including a non-resident individual are liable to withholding tax of 24% or 19% if the recipient is resident in an EU or EEA member state where an Information Exchange Agreement exists.


This rate can be reduced by the provisions of a relevant Tax Treaty.


Royalties paid to associated EU resident companies or permanent establishments are exempt from tax in Spain providing certain conditions are satisfied.



Capital Gains

Under Spanish law capital gains are treated as ordinary business income taxable at the 25% corporate tax rate.

Capital gains on disposals by non-residents without a permanent establishment in Spain are taxed at a reduced rate of 19%.

Where non-residents without a permanent establishment dispose of real estate situated in Spain, a tax of 3% will be withheld from the sales price by the purchaser and paid over to the Spanish Tax Authorities to be offset against the vendor’s tax liability.

Capital Gains from the transfer of shareholdings/ownership interests in Spanish companies and foreign subsidiaries by corporate entities are exempt from tax if the conditions of Participation Exemption are satisfied.

For an E.U. corporate shareholder, ownership of at least 5% must be held directly or indirectly or the shareholding must be valued at over €20 million and it must be held for at least a twelve month period.

In situations where the company is non-resident, a foreign tax which is similar to Spanish Corporate Income Tax of 10% will apply providing the corporate entity is resident in a country with which Spain has concluded a Double Taxation Agreement.



Spanish VAT or IVA is charged on the supplies of goods and services within the Spanish VAT territory as well as on imports and intra-EU acquisitions of goods and services.

IVA is charged at 21% on the majority of goods and services in Spain.

There is a reduced rate of 10% which applies to certain goods and services such as the purchase of a newly built property, passenger travel, health products and equipment, toll roads, refuse collection and treatment, entrance to cultural buildings and events, some foodstuffs, water supplies, renovation and repair of private dwellings, agricultural supplies, hotel accommodation, restaurant services, etc.

There is a super reduced rate of 4% which applies to the basic necessities other than those classified under the 10% rate and these include human medicine, basic foodstuffs (i.e. bread, milk, cheese, eggs, fruit, vegetables, cereals, potatoes, etc.), books, newspapers and magazines except the electronic equivalents.


Sales Tax is applied in Ceuta and Melilla instead of VAT.


The Canary Island Indirect Tax or IGIC applies in the Canary Island instead of VAT.


The ordinary rate of IGIC is 7% but there are a range of other rates: 0%, 3%, 9½%, 13½% and 20%.




On 1st July 2017 a new “Immediate Supply of Information” system took effect in Spain.

This new VAT management system now requires taxpayers to maintain their VAT books and records through the Spanish Tax Authorities website on a near real-time basis.

This new system is mandatory for all taxpayers who file their VAT Returns on a monthly basis including:

  • Companies included in the VAT Grouping Special Regime.
  • Large organisations whose annual turnover exceeds €6 million.
  • Taxpayers registered on the VAT Monthly Refund  Registry (REDEME)


This new system, however, also enables Taxpayers to elect to use the S.I.I.  If they voluntarily choose to use this system then they must declare their intention on Form 036.


Revenue eBriefs since 1st January 2017



Are you aware of how much has changed since 1st January 2017 in terms of Tax compliance, Tax Credits, Employee Subsistence Expenses, Personal Tax, Corporation Tax, Capital Acquisitions Tax, Capital Gains Tax, Value Added Tax, PAYE, Stamp Duty, Transfer Pricing, Local Property Tax, Revenue Audit Procedures, etc.?


Here are a list of the Revenue eBriefs published so far this year:


  1. Revenue eBrief No. 01/17  Finance Act 2016 – VAT Notes for Guidance
  2. Revenue eBrief No. 02/17 Improved online services for PAYE customers
  3. Revenue eBrief No. 03/17 Stamp duty levies – changes made by Finance Act 2016 and Health Insurance Amendment Act 2016
  4. Revenue eBrief No. 04/17  Finance Act 2016 changes to Capital Acquisitions Tax Consolidation Act 2003 – Changes to section 86 (Dwelling House Exemption) and Schedule 2 (Group Thresholds) CATCA 2003 
  5. Revenue eBrief No. 05/17  Fisher Tax Credit 
  6. Revenue eBrief No. 06/17  Special Assignee Relief Programme
  7. Revenue eBrief No. 07/17  Deduction for statutory registration fees paid to the Health and Social Care Professionals Council
  8. Revenue eBrief No. 08/17  Revenue Opinions and Confirmations 
  9. Revenue eBrief No. 09/17  Tax Relief on Retirement for Certain Income of Certain Sportspersons 
  10. Revenue eBrief No. 10/17  Irish Real Estate Fund declarations
  11. Revenue eBrief No. 11/17  Average Market Mid-Closing Exchange Rates v Euro – Lloyds Conversion Rate
  12. Revenue eBrief No. 12/17  Revenue Arrangements for Implementing EU and OECD Exchange of Information Requirements In Respect of Tax Rulings
  13. Revenue eBrief No. 13/17  PAYE – Exclusion Orders
  14. Revenue eBrief No. 14/17 –  Taxation of Paternity Benefit
  15. Revenue eBrief No. 15/17  Deduction for income earned in certain foreign states (Foreign Earnings Deduction) 
  16. Revenue eBrief No. 16/17  Revenue Technical Service – Solicitor Access to the MyEnquiries online contact facility 
  17. Revenue eBrief No. 17/17  R and D tax credit claims in respect of projects supported by Enterprise Ireland R and D grants
  18. Revenue eBrief No. 18/17  Updates to the Electronic Relevant Contracts Tax (eRCT) System – Look up Payment Notifications
  19. Revenue eBrief No. 19/17  Revenue seeks applications for independent Research & Development (R&D) experts
  20. Revenue eBrief No. 20/17  Solvency II – EU (Insurance and Reinsurance) Regulations 2015 
  21. Revenue eBrief No. 21/17  Opticians in employment 
  22. Revenue eBrief No. 22/17  Securitisation: Notification of “Qualifying Company” Section 110 Taxes Consolidation Act, 1997.
  23. Revenue eBrief No. 23/17  Code of Practice for Revenue Audit and other Compliance Interventions
  24. Revenue eBrief No. 24/17  Health Expenses / Assistance Dogs
  25. Revenue eBrief No. 25/17  Non Principal Private Residence (NPPR) Charge
  26. Revenue eBrief No. 26/17  Irish Real Estate Fund declarations
  27. Revenue eBrief No. 27/17  Certification of Residence for Individuals/Companies/Funds
  28. Revenue eBrief No. 28/17  CGT implications for individuals of takeover of Fyffes plc by Sumitomo Corporation
  29. Revenue eBrief No. 29/17  PAYE Modernisation – Report on Public Consultation Process
  30. Revenue eBrief No. 30/17  Non Principal Private Residence charge notification facility
  31. Revenue eBrief No. 31/17  Home Renovation Incentive (HRI)
  32. Revenue eBrief No. 32/17  Help To Buy Scheme
  33. Revenue eBrief No. 33/17  Section 900 Taxes Consolidation Act 1997 – Power to call for the production of books, information etc.
  34. Revenue eBrief No. 34/17  Charitable Donations Scheme
  35. Revenue eBrief No. 35/17  Revenue Technical Service (RTS) for Agents and Taxpayers
  36. Revenue eBrief No. 36/17  Large Cases Division: Opinions/Confirmation on Tax/Duty Consequences of a Proposed Course of Action
  37. Revenue eBrief No. 37/17  VAT treatment of education and vocational training
  38. Revenue eBrief No. 38/17  ROS – Extension of Pay & File Deadline for ROS Customers for 2017
  39. Revenue eBrief No. 39/17  Corporation Tax (CT1) Returns for 2016 and 2017, Forms 46G (Company)
  40. Revenue eBrief No. 40/17  Offshore funds regime
  41. Revenue eBrief No. 41/17 Incapacitated Child Tax Credit
  42. Revenue eBrief No. 42/17  MyEnquiries enhancements
  43. Revenue eBrief No. 43/17  Exemption in respect of certain expense payments for resident relevant directors
  44. Revenue eBrief No. 44/17  Definition of ‘chargeable person’ – Self Assessment
  45. Revenue eBrief No. 45/17  Employees’ Subsistence Expenses and Motoring and Bicycle Expenses
  46. Revenue eBrief No. 46/17  Underpayment of Preliminary Corporation Tax: waiver of interest where the underpayment arises solely due to movements in the exchange rate of the functional currency
  47. Revenue eBrief No. 47/2017  Pre self-assessment – stamp duty manual
  48. Revenue eBrief No. 48/17  Taxation of exam setters, exam correctors, invigilators, etc.
  49. Revenue eBrief No. 49/17  Tax treatment of the reimbursement of Expenses and Travel and Subsistence to Office Holders and Employees
  50. Revenue eBrief No. 50/17  Returns Compliance Income Tax and Corporation Tax
  51. Revenue eBrief No. 51/17  Local property tax appeals
  52. Revenue eBrief No. 52/17  Company reconstructions without change of ownership (Section 400 TCA 1997)
  53. Revenue eBrief No. 53/17  Restructured VAT Tax and Duty Manual
  54. Revenue eBrief No. 54/17  Full self-assessment: Time limits for making enquiries and making or amending assessments
  55. Revenue eBrief No. 55/17  Surcharge on certain undistributed income of close companies
  56. Revenue eBrief No. 56/17  Charges on income for Corporation Tax purposes
  57. Revenue eBrief No. 57/17 Time limits for raising assessments and making enquiries – section 955 TCA 1997
  58. Revenue eBrief No. 58/17  Filing and paying Stamp Duty on Instruments
  59. Revenue eBrief No. 59/17  Capital Acquisitions Tax – Business Relief
  60. Revenue eBrief No. 60/17  Pensions Manual Amended
  61. Revenue eBrief No. 61/17  PAYE Taxpayers and Self-Assessment – Interaction of PAYE and Self-Assessment Procedures: Income Tax
  62. Revenue eBrief No. 62/17  Company Incorporation – Economic Activity
  63. Revenue eBrief No. 63/17  Tax-Geared Penalties for Non-Submission of Returns
  64. Revenue eBrief No. 64/17  Tax treatment of certain dividends
  65. Revenue eBrief No. 65/17  Full self-assessment – Revenue assessment in the absence of a return
  66. Revenue eBrief No. 66/17  New PAYE Services and ROS registration changes
  67. Revenue eBrief No. 67/17  Data Retention Policy for Compliance Interventions
  68. Revenue eBrief No. 68/17  Provisions Relating to Residence of Individuals
  69. Revenue eBrief No. 69/17  Guidelines on tax consequences of receivership and mortgagee in possession (MIP)
  70. Revenue eBrief No. 70/17  Irish Real Estate Funds
  71. Revenue eBrief No. 71/17  ROS Form 11 – 2016 income tax return
  72. Revenue eBrief No. 72/17  Guide to Exchange of Information under Council Directive 2011/16/EU, Ireland’s Double Taxation Agreements and Tax Information Exchange Agreements and the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters.
  73. eBrief No. 73/17  Guidelines for requesting Mutual Agreement Procedure (MAP) assistance in Ireland
  74. Revenue eBrief No. 74/17  Transfer Pricing Documentation Obligations
  75. Revenue eBrief No. 75/17  Tax Treatment of Members of the European Parliament
  76. Revenue eBrief No. 76/17  ROS – Digital Certificate Renewal reminder notices
  77. Revenue eBrief No. 77/17  Corporation Tax Statement of Particulars – Section 882 TCA 1997
  78. Revenue eBrief No. 78/17  Accessing Schedule E information – 2016 Income Tax Return
























Trump Administration releases US tax reform plan





Everyone is aware that significant changes were introduced in the 2016 Budget but have you thought what they might mean for you?


Prior to 25th December 2016, Section 86 CATCA 2003 provided a means of passing on a property to the next generation, either by gift or inheritance, in a tax free manner.


The exemption from Capital Acquisitions Tax for a gift or inheritance of a dwelling house or part of a dwelling house applied if the following conditions were met:

  1. the donee/successor/beneficiary who received the gift or inheritance must have continuously occupied the dwelling house as his/her sole or main residence throughout a period of three years immediately up to the date of the benefit or
  2. in circumstances where the dwelling house replaced another property, the donee/successor/beneficiary must have occupied the property as his/her only or main residence for a period of three out of the four years immediately before the date of the benefit  and
  3. the donee/successor/beneficiary must not at the date of the gift/inheritance have been beneficially entitled to any other dwelling house or interest in any other dwelling house and
  4. in circumstances where the donee/successor was aged under fifty five years, he/she must have continued to occupy the dwelling house as his/her sole or main residence for six years beginning on the date of the gift or inheritance.




What’s the situation from 25th December 2016?

  1. The Dwelling House Relief is available for inheritances of a dwelling house or part of a dwelling house only.  It is no longer available for gifts or gifts which convert to inheritances in circumstances where the donor dies within two years of the date of the gift.
  2. The donor must have occupied the dwelling house as his/her sole or main residence at the date of his/her death. Please be aware that this requirement will be relaxed in situations where the deceased person could not remain in the dwelling house due to mental or physical infirmity. In other words if that individual requires specialist care in, say, a nursing home and as a result, has to leave his/her home, then he/she will be deemed to continue to occupy the property during that period.
  3. The beneficiary/successor must have occupied the dwelling house as his/her sole or main residence for a continuous period of three years preceding the date of the inheritance. In other words, the house must be occupied by both the person making the gift at the date of death and the beneficiary receiving the gift at the date of the inheritance. Please be aware that this requirement does not apply in the case of a gift of a dwelling house to a “Dependant Relative.”
  4.  The beneficiary/successor must not have an interest in any other dwelling house or part of a dwelling house at the date of the inheritance and
  5.  The beneficiary/successor must continue to occupy the dwelling house as his/her main or sole residence for six years from the date of the inheritance.   Please be aware that this requirement will be relaxed in situations where the beneficiary/successor cannot remain in the dwelling house due to mental or physical infirmity or because the terms of his/her employment requires him/her to live elsewhere.
  6.  The Dwelling House Relief will however be available on a gift of a dwelling house which is made to a “Dependant Relative.”   This is defined as a direct relative of the person making the gift or his/her spouse/ civil partner, and who is permanently and totally incapacitated by reason of mental or physical infirmity or is over the age of sixty five years.


What does this mean?

The amendment to Section 86 CATCA 2003 (Exemption relating to certain dwellings) has removed a valuable tax planning opportunity and will lead to unforeseen tax liabilities for individuals who receive gifts.


To most it seems like an excessive way of addressing the problem of wealthy families using this exemption as a means of transferring property to the next generation tax free.   For many families in Ireland the “Dwelling House Relief” was used by parents to help their children get on to the property ladder.   Some, however, welcome this amendment stating that it will ensure that family members who genuinely want to live with and care for elderly parents will inherit the family home tax free providing the conditions are met.


It is also important to keep in mind that since the conditions for this Relief are based on mental or physical infirmity then medical proof will be required to avoid a claw-back of the relief.



 In summary

  1. Section 86 CATCA 2003 Dwelling House Relief is only available for inheritances unless a gift of a dwelling house is taken by a Dependant Relative who is permanently or totally incapacitated or aged over sixty five years.
  2. The age at which a beneficiary/successor can take a property without being liable to the claw-back provisions has been increased from fifty five years to sixty six years.
  3. The house must be occupied by both the disponer and the beneficiary at the date of the inheritance except where the property was gifted to a dependent relative.
  4. The property is the only residential property that the beneficiary/successor is beneficially entitled to.

RENTAL EXPENSES IRELAND – High Court decision in Revenue Commissioners v Thomas Collins


The High Court decision in Revenue Commissioners v Thomas Collins has just been published.

It states that contrary to Revenue’s position, the NPPR (Non Principal Private Residence) charge was in fact an “allowable” expense against rental profits under Section 97(2) TCA 1997.


What was the NPPR Charge?

The NPPR (Non Principal Private Residence) charge was an annual charge of €200 implemented by the Local Government (Charges) Act 2009, as amended by the Local Government (Household Charge) Act 2011.


It related to all residential property situated in Ireland which was not used as the owner’s sole or principal residence from 2009 to 2013.


Examples of the type of residential properties liable for the NPPR charge were:

  • private rented properties including houses, maisonettes, flats, apartments or bedsits.
  • vacant properties – This definition excluded new but unsold residences in situations where they had never been used as a dwelling houses but instead were deemed to be part of the trading stock of a business.
  • holiday homes or second homes.



Previous Tax Treatment of NPPR

Irish Income Tax is calculated on the net amount of rents received or rental profits.  In other words Income Tax is charged on the gross rents received less any allowable expenses as specified in the Taxes Consolidation Act 1997.


The main deductible expenses include:

  • Interest on money borrowed to purchase, repair or improve the property
  • Any rent payable by the landlord in relation to a sub-lease
  • The cost to the landlord of providing any goods or services to the tenant
  • The cost to the landlord of insurance, repairs & maintenance, property management fees, etc.
  • Local Authority Rates where relevant.


For details of allowable rental expenses, please visit www.revenue.ie/en/tax/it/leaflets/it70.html


Prior to this ruling the Irish Revenue Authorities and the Department of Finance stated that the payment of the NPPR charge for residential properties was NOT an allowable deduction in calculating Income Tax on the rental profits.


Effect of this Ruling

If this High Court decision is not overturned then it could result in a repayment of taxes overpaid.

There is a time limit for claiming refunds of tax overpaid.  All claims for tax refunds must be made within four years of the end of the year to which the claim relates.



CORPORATE TAX – Payment and Filing


Corporation Tax Returns

The Irish corporation tax system operates on a self-assessment basis.  Therefore, it is solely the responsibility of the company to calculate and pay its corporation tax liability within deadline.


Any company liable to corporation tax must submit a CT1 Form which is a Tax Return containing details of profits, chargeable gains and other relevant information as outlined in Section 884 TCA 1997.


This return must be filed within nine months of the end of the company’s accounting period but no later than the 23rd day of the month if the Tax Return along with payment of the associated tax liability is filed via the Revenue Online Service.  Otherwise, the Return must be filed within eight months and twenty one days of the company’s year-end.


A company with a 31st December 2016 year-end, for example, must file its CT1 form on or before 21st September 2017 unless it files its Return and the relevant tax payment using the Revenue Online Service, in which case the deadline date is extended to 23rd September 2017.


An accounting period for corporation tax purposes cannot be longer than twelve months.


If a company has an accounting period of say, fifteen months for example, then it is deemed to have:

(a)   Two accounting periods for Corporation Tax purposes and

(b)   Two Preliminary Tax payment dates.


The first accounting period would be for the first twelve months and the second accounting period would be for the remaining three months.



Consequences of filing a late or incomplete/incorrect CT Return

If a company files (a) an incomplete or (b) an incorrect or (c) a late CT1 Form the following surcharges will apply:

  • If filed less than two months late, a 5% surcharge (subject to maximum of €12,695) will be calculated on the company’s CT liability for the accounting period in question.  This surcharge will apply irrespective of whether the tax had been paid within deadline because this surcharge arises in relation to the late filing of the CT1 Form.
  • If filed more than two months late, a 10% surcharge (subject to maximum of €63,485) will be levied on the company’s tax liability for the period in question regardless of whether or not the tax had been paid on time.

Please be aware that the surcharge also includes any Income Tax due.


In addition to the above surcharges, in circumstances where a company does not submit its return on time, the following restrictions on the use of certain allowances and reliefs will also apply:

  • If filed less than two months late, the reliefs and allowances will be restricted by 25%, subject to a maximum of €31,740 in each case
  • If filed later than two months, the reliefs and allowances are restricted by 50%, subject to a maximum of €158,715 in each case.


For Group Relief to apply, both the surrendering and the claimant company must have submitted their Corporation Tax Returns within the deadline date.


In situations where the Corporation Tax Return has been filed on time but the Local Property Tax (LPT) Return or relevant payment is outstanding at the CT filing date then a surcharge of 10% will be levied on the final liability.


This surcharge will also be levied if an agreed payment arrangement for LPT has not been set up.


If the company subsequently pays its LPT liability in full, bringing its tax affairs up to date, the amount of the surcharge will be capped at the amount of the LPT liability involved.



 Preliminary Tax


In Ireland, companies are required to prepay a portion of their corporation tax liability – this is known as “Preliminary Tax”.


The rules for calculating Preliminary Tax depends on whether a company is considered to be a “small company” or a “non-small company”.


A “small company” for preliminary tax purposes is a company whose corporation tax liability for the previous twelve month accounting period did not exceed €200,000.


A company which qualifies as a “small company” has the option of computing its preliminary corporation tax payment on the lower of:

  • 90% of the total estimated corporation tax liability for the current period, or
  • 100% of the final corporation tax liability for the previous period.


A small company has the option of paying its Preliminary Tax one month before the end of its accounting period on a date no later than the 23rd day of the month.


Any balance of tax outstanding must be paid on or before the company’s tax return filing date i.e. the 23rd day of the ninth month following the end of the accounting period.  In other words, if the accounting period ended on 31st December 2016 the balance of the tax would be payable by 23rd September 2017 providing the Return and payment were made via ROS otherwise it would be on or before 21st September 2017.


It is advisable to choose the second option because by paying 100% of the previous year’s CT liability this ensures that no underpayment will have been made by the Company thereby avoiding exposure to interest penalties.


Please be aware that if the company doesn’t pay sufficient preliminary corporation tax or if the preliminary tax is not paid on time, an interest charge will be levied.   A daily simple interest rate of 0.0219% will arise on the difference between:

(a) 100% of the final CT liability and

(b) The amounts paid over to the Irish Revenue Authorities.


For companies which are not deemed to be “small companies” the following rules will apply:

The first preliminary tax payment or “Initial Instalment” falls due no later than the 23rd day of the sixth month from the commencement of the chargeable period. The payment due is the lower of

(a)   50% of the previous periods corporation tax liability or

(b)   45% of the current year’s liability.


The second preliminary tax payment or “Final Instalment” falls due no later than the 23rd of the month preceding the end of the chargeable period (i.e. by the 23rd day of the eleventh month of the accounting period). This payment must bring the total preliminary tax payment submitted to the Revenue Authorities to at least 90% of the total tax payable for the current chargeable period including the tax on any chargeable gains.


The company must file its CT1 Return and pay the balance of the Corporation Tax (i.e. the remaining 10%) no later than the 23rd day of the ninth month after the chargeable period ends.






If you intend to set up a new company in Ireland in 2017, please be aware that you must register with the Irish Revenue Authorities within thirty days of incorporation. This can be done by completing the relevant sections of a TR2 Form:




The information required to register includes:

1. Your CRO Number – For further information you should contact the Companies Registration Office https://www.cro.ie
2. The company’s year-end.
3. The company’s trading activities.
4. The name of the company, its registered office address and the address of its principal place of business.
5. The name of the Company Secretary.
6. Details of Directors and the main shareholders of the company including their Personal Public Service (PPS) numbers.


Every company which is incorporated in Ireland regardless of its residency or which is a foreign incorporated company commencing to carry on a trade or profession in Ireland is also advised to file a Form 11F CRO (www.revenue.ie/en/tax/it/forms/11fcro.pdf) with the Irish Revenue Commissioners within thirty days of commencing to trade.


Under Section 882(2) TCA 1997 where the company is incorporated but not tax resident in Ireland, the following additional information is required:

1. The country in which the company is resident;
2. The name and address of the company which is trading in Ireland if the Trading Exemption in Section 23A(3) applies.
3. The names and addresses of the beneficial shareholders if the Treaty Exemption under Section 23A(2) applies. If, however, the company is controlled by a company whose shares are traded on a stock exchange in an EU or DTA country then the registered office of that company will be required.


If your company is deemed to be tax resident in Ireland then it will be liable to tax on its worldwide income/profits in Ireland and not just the profits generated in Ireland. If it is not deemed to be Irish tax resident, then it will only be liable to Irish tax on Irish source or generated income/profits.



The first question to ask yourself is how to determine the residence of the company?


The 2014 Finance Act, which came into effect on 1st January 2015, amended the corporate tax residence rules contained in Section 23A TCA 1997 to address concerns about the “double Irish” structure.


Here is a brief summary of the legislation as follows:

  • A company incorporated in Ireland will be deemed to be Irish tax resident.
  • However, to ensure it complies with how company residence is dealt with in the Double Taxation Agreements, there is an exception to this rule.
  • The exception states that if, under the provisions of a Double Taxation Agreement, the Irish incorporated company is deemed to be tax resident in another jurisdiction then that company will not, in fact, be considered to be Irish tax resident.
  • A company which was not incorporated in Ireland but is managed and controlled in Ireland will not be prevented from being taxed as an Irish tax resident company according to the amendments to Finance Act 2014.


There are specific rules for companies incorporated in Ireland before 1st January 2015.

The new provisions apply only from the earlier of the following dates:

a) 1st January 2021 or
b) The date of “change” which takes place after 1stJanuary 2015. By “change” we mean where there is both (a) a change in ownership of the company and (b) a major change in the nature or conduct of the business activities of the company. The timespan for this “change” to have taken place is within one year before the date of the change or on 1st January 2015, whichever is the later date, and ending five years after that date.


What does this really mean?

It means that companies incorporated in Ireland before 1st January 2015 can use the previous company tax residence legislation until 31st December 2020.

It is essential that up to 31st December 2020, all corporate groups take into consideration the impact of the new legislative provisions on any proposed reorganisations, mergers or acquisitions where there would be (a) a change in the ownership and (b) a change in the nature/conduct of the business in relation to non-resident companies which were incorporated in Ireland.


Tax Rates in Ireland

• Trading Income is taxed at 12½%

• Investment Income including Deposit Interest, Interest on Securities and Rental Income is taxed at 25%.

• Dividends or distributions paid by one Irish resident company to another Irish resident company are known as Franked Investment Income and are not liable to Irish Corporation Tax in the hands of the recipient.

• Foreign Dividends received by Irish resident companies will be subject to Irish corporation tax at 25% in most cases. However, tax at the 12½% rate will apply on dividends received from EU subsidiaries where certain conditions are met under 21B TCA 1997.

• Companies are subject to Corporation Tax on their chargeable gains. The relevant rate of Capital Gains Tax is 33% which is applied to the gain which is then adjusted to an amount which would give the same tax liability using the 12½% Corporation Tax rate. The tax adjusted chargeable gain is the figure to be included in your Corporation Tax calculation.