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Getting Established in Ireland – A Tax perspective

Starting in Baker Tilly Hughes Blake recently made me recognise all the small things you need to be aware of when moving into a new role. Where is the stationary? How does the printer work? What is the alarm code? All the small little things that come as second nature when you are fully established somewhere, are the silly questions that need to be asked on day one. This got me thinking about businesses looking to set up in Ireland and the assistance that companies require when making such a decision.

It is important to understand what questions a company moving to Ireland will have.

Branch or subsidiary?

A foreign entity can set up operations in Ireland via a branch office or by establishing a separate legal entity. A branch is often beneficial in early years, especially if a loss is expected from the Irish operations in those initial years and may have some less burdensome corporate compliance requirements. A company will need to consider what is the most beneficial manner to establish operations in Ireland and details of the relevant registrations and filing requirements. A clear understanding of any potential double tax treatment is also important when establishing in a new jurisdiction.

Transfer Pricing

Once a presence is established in Ireland it is necessary to ensure the allocation of profits is correctly adhered to. The ever-changing international tax landscape continues to put a large emphasis on transfer pricing and profit allocation and a company should carry out a detailed transfer pricing analysis to ensure profit allocations are carried out correctly.

Start-up exemption

Ireland provides a corporation tax relief to certain new entities for the first 3 years in operation. The relief provides a credit of up to €40,000 per annum for the first 3 years with unused credits being available to carry forward to future periods.

Other tax advice

  • A business establishing in Ireland should also consider advice and the availability of items such as;
  • the Research and Development tax credit relief which can allow a tax credit of 25% of R&D spend;
  • the Knowledge Development Box which can offer a 6.25% effective corporation tax rate on certain income which is related to R&D spend;
  • the availability of capital allowances on certain intellectual property;4. detailed advice on payroll and indirect tax obligations of establishing in Ireland.

It is important that we can make life as easy as possible for companies looking to set up in Ireland. As well as providing detailed tax advice as highlighted above, we can offer introductions to appropriate contacts such as legal and banking advisers.

We work closely with our international Baker Tilly network to ensure our advice covers all potential double tax issues and offer international groups the necessary local knowledge. If you are a business looking to establish in Ireland, we would recommend you speak to us.