As part of a political agreement reached on 17 November 2015 the corporation tax rate in Northern Ireland is to be reduced to 12.5% on trading profits by 2018. The power to set the corporation tax rate has been devolved to Northern Ireland by the UK. The change is intended to increase investment and growth in the region.
To qualify for the reduced rate a large company will need to have a Northern Ireland Regional Establishment (NIRE) which must be a fixed base in the region such as an office or factory. Small and medium enterprises (SMEs) will qualify for the lower rate if at least 75% of staff time and costs are related to work carried out in Northern Ireland. Companies qualifying under these criteria will be taxed at the lower rate on their trading profits. If a company does not meet these conditions it will continue to be taxed at the main UK corporation tax rate.
