Ireland presents 2015 budget on October 14, 2014 with some proposals concerning amendments of provisions for business and corporate taxpayers. The summary of the amendments are as follows:
- No change of 12.5% corporate tax rate;
- The residency rules for tax purposes would be changed for considering the Irish incorporated company as an Irish tax resident (unless a tax resident in a country that has in effect an income tax treaty with Ireland). The consequence of this provision is to revoke the “double Irish” structure. This change will be enforced from 1 January 2015 for the new companies and a transition period will be available up to the end of 2020 for the existing companies.
Other amendments on business tax in the 2015 budget:
- From 1 January 2015 R&D base year will be eliminated;
- It will be enacted a “Knowledge Development Box” like patent and innovation boxes in other countries;
- Revocation of the 80% restriction on capital allowances for expenditure incurred by a company on the provision of certain intangible assets for use in a trade and any interest expense incurred on borrowings to fund the expenditure;
- Accelerated capital allowances scheme for energy efficient equipment will be extended for another 3 years;
- Capital raises to be increased to €5 million annually subject to a lifetime limit of €15 million under the “EIIS regime” and the holding period for EIIS relief will be extended from 3 years to 4 years;
- Medium-sized companies in non-assisted areas and internationally traded financial services will also be included in extension of EIIS;
- Start-up relief for companies will be extended for additional 3 years.
