Corporate Solutions for International Business..
Irish Holding Company Multinational's Jurisdiction of Choice
o Exemption from Capital Gains Tax (CGT) on Share Disposal –
o Corporation Tax Exemption for Foreign Dividends and a Foreign Tax Credit System-
o Ireland has an extensive network of double taxation treaties-
o Tax Credits on Foreign Branch Income-
o Withholding Tax Exemption-
Investing in Ireland
Holding Company legislation has put Ireland in a position to compete with established
European holding company locations. An Irish company can act as a European/
Regional holding or Intermediate holding company.
The key benefits relate to the treatment of capital gains and foreign dividends.
Foreign Dividend Income
Although foreign dividend income is liable to tax in Ireland it is possible to gain
relief so that no further Irish tax will apply.
Companies may gain tax relief through:
1. Foreign tax credit pooling;
2. EU Parent Subsidiary Directive;
3. Double taxation agreements.
Dividends paid by a company located in the EU or in a country with which Ireland
has a double tax agreement (including agreements which are signed but not yet
ratified) are liable to corporation tax at the 12.5% rate provided the dividend is paid
out of ‘trading profits’.
If part of the dividend is paid from non trading profits and part from trading
profits, the non trading balance will be taxed at the 25% rate. However, in
accordance with EU legislation, Ireland follows the ‘de-minimis rule’, which states
that under certain conditions the whole of dividends are to be taxed at 12.5%,
regardless of whether a portion is derived from non trading profits.