What are the different types of taxes I need to pay as a business owner in Ireland?

Introduction

Learn the diverse landscape of taxation in Ireland with our comprehensive FAQ. Learn about the corporate tax rate, VAT obligations for Irish businesses, local taxes that may affect your company, payroll tax requirements, and industry-specific levies. Whether you’re an established business or just starting out, this guide provides valuable insights into the Irish tax system.

Corporate Tax

• The standard corporate tax rate is 12.5% on trading income and 25% on non-trading income like rents and investments. 
• Companies incorporated and tax resident in Ireland pay corporation tax on worldwide profits. 
• Non-resident companies pay corporation tax on profits of an Irish branch and certain Irish source income like rents. The non-resident rate is 25%
• Ireland has double taxation treaties with 76 countries to eliminate double taxation.

VAT

• Businesses exceeding €40,000 (services) or €80,000 (goods) turnovers must register for VAT in 2024
• The standard VAT rate is 23%, with reduced rates of 13.5% and 9% for certain sectors.
• VAT reporting is done bimonthly by default but you can change this to an annual return if paying by monthly DD. 
• Businesses can voluntarily register for VAT to claim input VAT refunds. 

Payroll Taxes

• Employers must withhold Pay As You Earn (PAYE) income tax and Universal Social Charge from employees’ salaries.
• Employer and employee Pay Related Social Insurance (PRSI) contributions are also required.
• Employer PRSI is charged at 8.8% or 11.05% dependent on employee wage amounts.

Incentives

• Key incentives include the 12.5% corporation tax rate, R&D tax credits, and capital allowances for acquiring intellectual property assets.
• R&D tax credit provides an effective tax deduction of 37.5% on qualifying R&D expenditures.
• Capital allowances allow tax deductions for acquiring intellectual property like patents and software.

In Summary

The key tax obligations for business owners in Ireland include corporation tax, VAT registration and reporting, payroll taxes, and utilizing available tax incentives. Proper compliance with Ireland’s tax rules and rates is essential.