Ireland

The rate of corporation tax applicable in Ireland is dependent on whether the income is derived from “trading” profits or whether it is considered to be “passive income”. The corporation tax rate for trading activities is 12.5% (15% for companies within the scope of the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two framework), whilst passive income is typically taxed at 25%.

Certain excepted trading activities are subject to the higher 25% rate of corporation tax, including dealing in or developing land.

Gains derived from disposals of capital assets by companies are generally subject to corporation tax at an effective rate of 33%, other than gains arising on disposals of development land which are subject to Capital Gains Tax (CGT) at 33%.

Ireland has implemented the OECD Pillar Two rules whereby a 15% minimum effective corporation tax rate applies to large corporate groups and standalone entities with a turnover of EUR 750 million or more in two of the preceding four years, for accounting periods commencing on or after 31 December 2023.

Income

Ireland operates a progressive taxing system for individuals with two main income tax rates:

• the 20% standard rate for annual income up to the standard rate cut-off point, which varies based on the individual’s marriage status and personal circumstances; and
• the 40% higher rate for income above the standard rate cut-off point.

In addition to income tax, social security (pay-related social insurance) and a universal social charge are also levied on an individual’s income in Ireland.

Taxes on employment income are operated by employers through payroll on a real-time basis whilst all other income (e.g. self-employment, rental and investment income) is generally returned on a self-assessment basis through the individual’s annual income tax return.

Capital gains

In Ireland gains arising on disposals of capital assets are generally subject to CGT at 33%. The Irish rules provide for various exemptions from CGT and in some circumstances the CGT rate is reduced, such as the 10% rate for gains up to EUR 1,500,000 arising on qualifying disposals of business assets.

Foreign-source income

The territorial scope of Irish tax on income and capital gains for individuals depends on the following factors.

Residence. An individual will be Irish tax resident for any tax year (1 January to 31 December) where:

• they were present for at least 183 days in Ireland during that tax year (any part of a day spent in Ireland counts as a full day for these purposes); or
• they were present for at least 280 days in Ireland for the current tax year and previous tax year taken together, and subject to the individual being present in Ireland for over 30 days or more in both years.

Ordinary residence. An individual will be ordinarily resident in Ireland for tax purposes if they have been tax resident in Ireland for the three previous consecutive tax years. Once an individual becomes ordinarily resident in Ireland, they will not cease to be Irish ordinarily resident until they have been non-Irish tax resident for three consecutive years.

Domicile. The concept of domicile is a feature of common law and it is not defined in legislation. It may be broadly interpreted as meaning residence in a particular country with the intention of residing permanently in that country. Every individual is born with a domicile of origin which can be replaced by a domicile of choice if there is clear evidence that the individual has a positive intention of permanent residence in another country and has abandoned the idea of ever returning to live in his country of birth. There are a number of factors to determine an individual’s domicile including where the individual:

• owns property;
• has social and family links; and
• plans to retire and be buried.

Source. An income’s source will be relevant in determining whether it is within the charge to Irish income tax. Irish-source income will generally be within the charge to Irish income tax regardless of the individual’s residence, ordinary residence or domicile. Irish-source income includes income from:

• an employment carried on in Ireland;
• a trade or profession carried on in Ireland; and
• Irish property.

Location of assets. The location of an asset will be relevant in determining whether any gain arising on its disposal is within the charge to CGT. Disposals of the following Irish “specified assets” will be within the charge to CGT regardless of the disposer’s residence, ordinary residence or domicile:

• land and buildings in Ireland;
• mineral rights in Ireland; and
• shares in unlisted companies which derive the greater part of their value from Irish land and buildings or mineral rights.

Scope of Irish income tax

• A person who is Irish tax resident and Irish domiciled is within the charge to Irish income tax on their worldwide income, subject to any relief or credit that may be available under a double tax treaty for tax paid in another jurisdiction on the same income.
• A person who is Irish tax resident or Irish ordinary resident but non-Irish domiciled will be within the charge to Irish income tax on the following:
  • Irish-source income;
  • income from a foreign employment to the extent it is carried on in Ireland; and
  • foreign income that is remitted into Ireland (i.e. brought or transferred into Ireland).
• A person who is non-Irish tax resident, but is Irish ordinary resident and domiciled, is within the charge to Irish income tax on their worldwide income, with the exception of:
  • income from a trade or profession carried on entirely outside Ireland;
  • income from an employment that is carried on entirely outside Ireland; and
  • other foreign income less than EUR 3,810 per year.
• A person who is not Irish tax resident or ordinary resident is within the charge to Irish income tax on Irish-source income only, regardless of their domicile status.

Scope of Irish CGT

• A person who is Irish tax resident or Irish ordinary resident and Irish domiciled, is subject to CGT on their worldwide gains, subject to any relief or credit that may be available under a double tax treaty for tax paid in another jurisdiction on the same event.
• A person who is not Irish tax resident or Irish ordinary resident is only subject to CGT on gains arising from the disposal of Irish specified assets, regardless of their domicile.
• A person who is Irish tax resident or Irish ordinary resident, but not Irish domiciled, is subject to CGT on gains arising from the disposal of Irish specified assets, and gains arising on other disposals to the extent the proceeds are remitted into Ireland.

Scope of Irish corporation tax

Irish tax resident companies are subject to corporation tax on their worldwide profits.

Companies incorporated in Ireland are Irish tax resident by default unless they are deemed to be tax resident elsewhere under the provisions of a double tax treaty. A company incorporated in another country will be Irish tax resident if its central management and control are in Ireland.

A non-Irish tax resident company is subject to corporation tax on its:

• trading profits from a permanent establishment carrying on a trade in Ireland;
• income from property used or held by a permanent establishment in Ireland; and
• gains arising on disposals of Irish situate assets used by a permanent establishment for carrying on a trade in Ireland.

Companies that are incorporated outside Ireland without any Irish permanent establishment will be subject to income tax at 20% on Irish-source income and CGT at 33% on gains arising from the disposal of Irish specified assets. An exception applies to non-Irish resident corporate landlords which are subject to corporation tax at 25% on Irish source rental income and gains arising on disposals of Irish specified assets at 33% (other than development land which is subject to CGT).

VAT

Ireland applies Value Added Tax (VAT) to supplies of goods and services that are supplied in Ireland and on the importation of goods and the receipt of services by Irish businesses from outside the country.

The standard rate of VAT is 23% with lower rates and exemptions applying to specified categories of goods and services:

• The first reduced VAT rate of 13.5% includes construction and maintenance services.
• The second reduced rate of 9% includes the supply of certain utilities such as electricity and gas.
• The “zero” rate of VAT includes exports and medicines. The zero rate means the supplier doesn’t charge any VAT on the supply but is still entitled to a deduction for any VAT it incurs on expenses related to the carrying out of its zero-rated business.
• VAT-exempt services, which includes financial, medical and educational activities.

A business in Ireland is required to register for VAT if its annual turnover exceeds EUR 42,500 (in the case of supplies of services subject to VAT) or EUR 85,000 (in the case of goods subject to VAT) or if it is in receipt of any services from a supplier who is established in another country.

Stamp duty

Stamp duty is a transfer tax that is charged on documents that convey the beneficial ownership of property and meet one of the following conditions:

• executed in Ireland;
• relates to Irish property; or
• relates to something to be done in Ireland.

Stamp duty is generally payable by the transferee (i.e. the purchaser) and is calculated based on the higher of the market value of the property being acquired or the consideration payable for the property. The rate of stamp duty payable depends on the type of property being transferred under the stampable instrument:

Dividend Withholding Tax

Irish companies must withhold Dividend Withholding Tax (DWT) from “relevant distributions” to shareholders; the rate of DWT is 25% of the payment (or value in the case of a non-cash distribution). In addition to cash dividends, the Irish tax rules deem various arrangements to be “relevant distributions” that are within the scope of DWT, including:

• certain distributions out of a company’s assets (other than on a return of capital);
• transfers of a company’s assets to its members at below market value; and
• certain interest payments.

There are certain domestic exemptions from DWT where administrative procedures are complied with in advance of the dividend being paid by the company distributions to:

• companies resident in an EU Member State or a country which has a double tax treaty with Ireland;
• non-Irish tax resident individuals who are resident in an EU Member State or a country which has a double tax treaty with Ireland; and
• pension funds, charities and investment funds.

Where a domestic exemption is not available, non-Irish resident shareholders who are resident in a country which has a double tax treaty with Ireland may be able to reduce the amount of DWT payable under the terms of the double tax treaty or claim a credit or relief for foreign tax paid on the same dividend.

Shareholders who had DWT withheld on a distribution from an Irish company may be able to claim a credit for any DWT withheld on dividends received against their income tax liability. The EU Parent-Subsidiary Directive may also provide an exemption from DWT if the shareholder is a company that meets certain conditions.

Interest Withholding Tax

“Yearly” interest payments made by an Irish company to a person whose usual place of abode is in Ireland, or a payment by any person to another person whose usual place of abode is outside of Ireland, are subject to Interest Withholding Tax (IWT) at 20%. Interest payments will represent “yearly” interest where the obligation to make interest payments is capable of continuing beyond one year.

Various exemptions from IWT apply under Ireland’s domestic rules including for interest paid:

• to or by banks carrying on a bona fide business in Ireland;
• during the course of the payor’s trade where the recipient is resident in a country which has a double tax treaty with Ireland and generally taxes interest as income; and
• to qualifying treasury companies.

Relief from double taxation under a double tax treaty or the EU Interest and Royalties Directive may also operate to reduce IWT.

Royalty Withholding Tax

Royalty withholding tax (RWT) at a rate of 20% must be withheld by the payor on patent royalty payments (being any royalty or other sum paid by the user of a patent) or other royalty payments if they are “annual payments”. To be considered an annual payment, a royalty must be:

• capable of recurring annually;
• payable under a legally binding obligation;
• treated as Irish-source income; and
• “pure income profit”, meaning that the recipient doesn’t have to incur any expenditure to earn the income which could be deducted from the income.

A number of domestic exemptions are available from RWT including for royalties paid by a company in the ordinary course of business to a company resident in a country which has a double tax treaty with Ireland. The EU Interest and Royalties Directive may also provide an exemption for RWT where certain conditions are met. Relief from double taxation under Ireland’s double tax treaties may also be available.

Outbound payments

Ireland has introduced defensive measures which disapply the domestic exemptions available from DWT, IWT and RWT on distributions, interest payments or royalty payments by Irish companies to associated entities that are resident in “specified territories” which includes countries listed on the EU’s list of non-cooperative jurisdictions and countries which generally don’t tax (or tax at 0%) entities on their income, profits and gains.

Relevant Contracts Tax

Relevant Contracts Tax (RCT) is a withholding tax that applies to contracts between “principals” and “subcontractors” for “relevant operations” in the construction, forestry, and meat‑processing industries.

Where the RCT regime applies, the principal (i.e. the person/company engaging the subcontractor to carry out relevant operations) must register the contract with the Irish Revenue Commissioners (“Revenue”) and file a notification before making any payments to the subcontractor. Depending on the subcontractor’s tax compliance history, the principal has an obligation to withhold 0%, 20% or 35% of the payment and remit it to Revenue. The subcontractor may claim a tax credit against its Irish tax liabilities for any amounts withheld by the principal.

Professional Services Withholding Tax

Professional Services Withholding Tax (PSWT) applies to payments by certain “accountable persons” which includes various public and semi-state bodies for professional services including legal, accountancy, architectural, engineering and advertising services. The accountable person must withhold PSWT at 20% and remit it to Revenue. The professional service provider can claim a credit for any PSWT withheld against its tax liabilities for the relevant year.

Non-resident landlords

Lessees are required to withhold 20% of any rent paid to a landlord who is not resident in Ireland and remit this to Revenue. This withholding obligation does not apply where the non-resident landlord has appointed a local collection agent who receives payment of the rent. The landlord can claim a credit for any rents withheld against its tax liabilities for the relevant year.

Ireland’s General Anti‑Avoidance Rule (GAAR) applies when it is “reasonable to consider” that a transaction gives rise to, or but for GAAR would give rise to, a “tax advantage” and was not undertaken or arranged primarily for purposes other than to give rise to a tax advantage.

The term “tax advantage” is quite broadly defined and includes a reduction, avoidance or deferral of any charge or assessment to tax including any potential or prospective charge or assessment, arising out of a transaction.

Where GAAR applies, Revenue may remove any tax advantage gained, recharacterise the treatment of a payment or income for tax purposes, recalculate the tax payable based on the commercial reality of the transaction and apply late payment interest and a tax avoidance surcharge of 30% where applicable.

Taxpayers can file a “protective notification” with Revenue if they believe a transaction could potentially fall within the scope of GAAR. Protective notifications must contain specific information and be filed within set time limits. A valid protective notification does not mean the transaction is considered compliant, and Revenue may still review and challenge it; however, it can help mitigate exposure to the tax avoidance surcharge and there is a reduced risk of penalties if the Revenue later decides that GAAR applies.

In recent years, Revenue has adopted increasingly targeted compliance interventions, a trend that is expected to continue into 2026. They continue to refine and deploy advanced analytical tools to identify non‑compliance, with particular emphasis on several key areas:

• Transfer pricing. Transfer pricing remains a major focus. According to Revenue’s Annual Report, 46 interventions relating to the 2015–2024 period have been completed, resulting in EUR 788 million in additional tax and over EUR 1 billion in restricted losses.
• Anti‑avoidance. Combatting tax avoidance is a stated priority. Revenue recently reported that 228 anti‑avoidance cases are currently in progress, connected to 33 transactions.
• Research and development (R&D) tax credits and intangible asset amortisation. Revenue has continued to scrutinise claims for R&D tax credits and amortisation allowances for intangible assets, with ongoing compliance interventions in these areas.
• Mutual Agreement Procedures (MAP) and Advance Pricing Agreements (APA). As Ireland’s competent authority for tax dispute resolution under double tax treaties, Revenue continues to advance a substantial number of MAP and APA cases, particularly those involving transfer pricing. While the number of concluded APAs remains relatively low, Revenue anticipates an increase as numerous active cases move toward completion.

Ireland’s Tax Appeals Commission (TAC) offers a relatively straightforward way for taxpayers to appeal Revenue decisions and assessments. There tends to be a number of recurring themes on TAC appeals, driven by the complexity of Ireland’s tax code and its role as a hub for multinational activity, for example, employment tax, R&D tax credit, VAT and withholding tax related disputes.

A recent trend from TAC hearings has been a consideration of the context in which Revenue can raise tax assessments outside the statutory time limit where there has been fraud, neglect or a failure to make a full and true disclosure of all material facts by a taxpayer in preparing their tax return.

The Irish tax regime provides taxpayers with the right to appeal various decisions and actions taken by Revenue including appealing tax assessments. A taxpayer who wishes to appeal a decision or assessment of Revenue must file a notice of appeal with the TAC within 30 days of the decision or assessment.

The appeal is heard and decided by an Appeals Commissioner. The burden of proof in a TAC hearing generally rests with the taxpayer to prove that their interpretation of the application of the relevant tax rules to their case is correct. The standard of proof in a TAC hearing is on the balance of probabilities, meaning the appellant must prove that their position is more likely than not correct. In limited circumstances, the burden of proof switches to Revenue, for example, where Revenue is alleging that there was fraud or neglect by a taxpayer in preparing their tax return.

If a taxpayer or Revenue loses in a hearing before the TAC, they can appeal the determination to the Irish High Court on a point of law, thereafter the case may be appealed to the Court of Appeal or the Supreme Court in some cases. The TAC also has a right of referral to the Court of Justice of the European Union on questions of the interpretation of European Union law.

Appellants can currently request that their TAC hearing is held in private and that the determination of the TAC (which are all made publicly available) is anonymised so that they can’t be identified. There is an ongoing consultation on these matters following draft legislation published by the Irish government in 2025 which proposed to greatly narrow the ability of appellants to have their appeal heard in private and the determination of the TAC in their case published in anonymised form.

Ireland does not currently have a formal alternative dispute resolution framework for tax disputes with Revenue. However, tax controversies can sometimes be resolved through negotiation and settlement with Revenue depending on the individual facts and circumstances.

Where a matter has been appealed to the TAC, the appointed Appeal Commissioner can arrange a “case management conference” between the taxpayer and Revenue with a view to clarifying any matters and giving directions for the completion of the appeal in a fair and expedient manner. If the parties consent, the Appeal Commissioner may make a determination on the matter under appeal at (or following) the case management conference.