Tax Rate Comparison

Distributable Income Comparison

% Increase in Profit required to achieve the same distributable income available in Ireland

Low corporation tax rates have always been a feature of industrial policy in Ireland.

Shannon offers:-

A corporation tax rate of 12.5% applies to trading profits in all sectors, including manufacturing and international services

A 25% tax credit against corporation tax liability will be available from Jan 2009 towards qualifying expenditure on research and development (R&D)

Irish resident companies who use Shannon as regional headquarters or as a location for holding company activities are exempt from Irish Capital Gains Tax on the disposal of a substantial shareholding in their trading subsidiaries

VAT at Shannon:-

Goods can be imported from outside Ireland without payment of VAT at the point of entry
Charges on locally provided goods and services and imports of goods can be avoided if at least 75% of the products manufactured are for export - the so-called “13A exemption”

Individual Tax and Social Security

Employers are obliged to pay PRSI contributions.
The general rate applying is 10.75%. This may be lower, depending on the level of salary.
Pension contributions paid on behalf of employees are tax deductible. There is no statutory obligation to pay pension contributions on behalf of employees. However, it is common practice for a company to contribute in the range of 5-10% of the employee's salary. Under recently introduced legislation, all employers must offer the facility of setting-up a PRSA-type pension plan where there is no existing pension plan in place.
Employees are generally liable to PRSI at a rate of 4% of on earnings up to 52,000 p.a., except the first €127 per week. Employees earning €352 or less per week are exempt form PRSI.
The PRSI rate is applied to the gross salary and benefits after deduction of pension contributions.
Foreigners resident and working in Ireland are generally covered by the Irish social security system, provided that the necessary documentation is in place.
Levies amounting to 1% up to €100,100 p.a. and 2% on income > €100,100 are payable.
PRSI contributions: Ireland provides a high level of coverage with respect to full-rate social insurance contributions, eg: dental, health, unemployment benefits, state pension and maternity benefits.

Personal Income Tax Rates

The first €36,400 (single person) is taxed at the standard rate of 20%, and the balance taxed at 41%.
The first €45,400 (married couple - one income) is taxed at the standard rate of 20%, and the balance is taxed at 41%.
The first €72,800 (married couple - two incomes) is taxed at the standard rate of 20%, and the balance is taxed at 41%.

*Source. KPMG 2008 ( www.KPMG.ie )

Expatriate Tax

Generally, Irish resident and domiciled individuals are taxed on worldwide income and gains.
Expatriates who are 'non-domiciled' in Ireland are liable to tax on a remittance basis in respect of income arising outside of Ireland and the UK. Since 1 January 2006, income from a foreign contract of employment where the duties are performed in Ireland are taxed in Ireland under the PAYE system.