Through boom and bust, BK has continued to help keep us profitable and they are a great source of positive encouragement. Nothing is too much trouble. I would recommend BK without hesitation to anyone in business or thinking of starting a business – BK is a firm of accountants who are professional, knowledgeable, experienced and who will go the extra mile.
Locating to Ireland
Why locate in Ireland?
There are many excellent reasons why companies are locating to or setting up a subsidiary in Ireland. Our favourable low corporation tax regime, a supportive environment for start-ups, our global connections providing links to Europe, US and the Middle East and the availability of a well educated, hard-working & friendly workforce are just some of the reasons cited. On a personal level, Ireland is simply a really great place to live, work and raise a family!
Research & Development
Ireland is home to world-class companies and research centres in sectors including ICT, life sciences, gaming, financial services and food & beverages. Ireland has gained a reputation worldwide as a hub for software development and particularly cloud based computing R&D. Irish universities and technical colleges are training extensively in all of these fields. This means that there is a supply of expert and experienced workers available in Ireland to companies developing technologies. Buckley Kiely is already working with companies in these fields and we have an understanding of their particular needs.
Companies which incur R&D expenditure in Ireland receive a 25% tax credit from the Irish tax authorities and this is very attractive when combined with Ireland’s low 12.5% rate of corporation tax.
In broad terms, if the 25% tax credit cannot be utilised against corporation tax due to lack of income, a claim for a cash repayment of the credit can be made and so this can be a very real advantage. Many conditions surround the R&D claim and Buckley Kiely assists clients to plan carefully for this to ensure all conditions attaching to the relief are met.
Ireland is an ideal location for holding intellectual property (IP) and there are many tax advantages to locating in Ireland.
However, it is important that the Irish company would be actively managed and controlled in Ireland and would have a real presence and substance here.
Structure of the Irish Company
Getting the structure of the Irish company right is key to ensuring that holding companies are protected and that profits are taxable in Ireland.
Buckley Kiely provides advice on how best to structure the company and assistance with forming and registering companies with the Irish Companies Registration Office.
Financing the Investment into Ireland
Inevitably there are some set up costs associated with setting up an Irish subsidiary. We provide assistance with preparing a budget for these costs and examine how best to invest these monies in the Irish company, which typically takes one of two forms:
1) Acquiring shares in the newly formed Irish subsidiary for a cash injection
2) Taking a nominal share subscription, say of two €1 ordinary shares, and financing the operations by way of a loan from the parent corporation. If an interest free loan is considered, transfer pricing rules would need to be examined.
Buckley Kiely will be happy to liaise with accountants and legal advisors in the country of origin to answer any questions and if necessary find solutions to any concerns.
Irish Corporation Tax
As mentioned above Ireland has the lowest corporate tax rate in Europe with a domestic rate of just 12.50%. The 12.50% rate is charged on net profit after capital allowances (tax depreciation) has been claimed. On set up of the company initially, trade losses may be incurred and any such losses can be carried forward to use if and when the company begins to generate profit.
Irish Employment Taxes
The PAYE (Pay As You Earn) system operates in Ireland and employees pay taxes collected by their employer through the payroll. The total wage cost to a company is normally the gross wage plus 10.75% employer PRSI (social insurance).
Buckley Kiely provides payroll services and assistance in registering and managing the compliance of all employment taxes.
Any cash reserves built up in Ireland may be remitted back to the country of origin by way of dividends, although the foreign tax rates would need to be examined further before doing this.
Buckley Kiely provides a range of services including;
- Fully outsourced accounting function
- Audit, accountancy and taxation consultancy services
- Banking Services – advice and assistance with loan applications and communications with banks
- Impartial Financial Solutions, including company pension schemes and investment products.