SME’s Welcome Changes to Subsistence Allowance Rates
- Employees and directors can now claim back an additional 10% of the costs incurred completely Tax Free while travelling on business.
- The cost to companies is considered to be an allowable expense for Corporation tax purposes, meaning it can be deducted from taxable profits.
- The daily subsistence ‘5 Hour but less than 10 Hour’ rate increases by 10%.
- The daily subsistence ‘10 hours or more’ rate increases by 10%.
- The increases are in line with the Consumer Price Index.
- The revised standard rates of subsistence allowance are effective from 1 July 2019.
- The standard overnight rate will not be increased.
- A separate Vouched Accommodation (VA) rate continues to apply whereby employees encounter difficulties in sourcing suitable accommodation in Dublin.
Are you a UK Based Director of an Irish Registered Company?
- The affairs of the company are managed by one or more persons from a place of business established in the State and that person or those persons is or are authorised by the company to act on its behalf.
- The company carries on a trade in the State.
- The company is a subsidiary or a holding company of a company or other body corporate that satisfies either or both of the conditions specified in 1 and 2.
- The company is a subsidiary of a company, another subsidiary of which satisfies either or both of the conditions specified in 1 and 2.
What is KEEP and when is it most effective?
Top 5 Reasons to Establish Your Business in Ireland
- 1 in the world for investment incentives and inward investment jobs per capita.
- 1 for flexibility and adaptability of people.
- 1 for European investment from US.
- 7 of the top 10 global software companies based in Ireland.
- 10 of the top 10 pharma companies based in Ireland.
- 8 of the top 10 industrial automation companies based in Ireland.
- 14 of the top 15 global aviation lessors have operations in Ireland.
- 19 of the top 25 financial services companies are in Ireland.
- 14 of the top 15 medtech companies based in Ireland.
- International Company Structuring
- International Strategic Planning
- Company Formation & Maintaining
- Annual Statutory Financial Statements
- Preparation and Submission of Annual Returns
- Provision of Corporation Tax Returns
- Provision of Registered Office
- Provision of Company Secretary
- Maintaining EEA Directorships
- Assistance with opening a company (Euro) bank account
- Payroll Solutions
- VAT Compliance
- Other Business Advice
Ireland as a base for your business
Since the UK’s unexpected vote to leave the EU there has been significant media focus on how Ireland will fare once the UK triggers Article 50 which sets in motion their exit.
While Ireland will face some difficulties in terms of exports with volatile exchange rates and the potential re-introduction of economic borders, there are also opportunities for Ireland post Brexit.
In the wake of Brexit the Irish political establishment has been vocal with regard to Ireland’s ongoing commitment to the “EU project”. Given the uncertain economic and political landscape globally, stability will be a key consideration for companies looking to establish in foreign markets. Political and economic stability coupled with Ireland’s favourable Taxation regime and its unique standing as potentially the only English speaking country in the EU, will undoubtedly give Ireland a competitive advantage.
Some of the key attractions to the Irish Taxation regime are as follows:
- One of the lowest statutory rates in the world
- Applies to Irish trading activities
- Irish trading income is taxed at 12.5%
The Knowledge Development Box
- Tax Rate of 6.25% on profits arising from certain Intellectual Property Assets which are as a result of qualifying R&D activity carried out in Ireland
- In effect since 1 January 2016
- Encourages companies to develop IP in Ireland
- The first and only Knowledge Box/Patent box in the world to meet the OECD’s “modified nexus” standard
Favourable Intellectual Property (IP) regime
- Tax depreciation on a broad range of trade related IP
- Depreciate over accounting life or 15 years, at the discretion of the Company
- No claw back if IP retained for at least 10 years
- Can result in effective Irish rate of 2.5% on IP exploitation income
- Deduction for licensed IP
- No Irish stamp duty on acquisition of IP
Attractive Research and Development regime
- Tax credit of 25% for qualifying R&D expenditure
- In addition to 12.5% deduction - effective value is 37.5%
- For new companies (post 2003) - relief is volume based
- Credit used to reduce CT liability or refundable in certain cases
- R&D tax credit may be “above the line” - directly reducing R&D cost
- Credit can be converted into tax efficient bonuses for R&D team
Holding Company regime
- Ireland frequently used as regional or global headquarters
- Irish Capital Gains Tax (CGT) exemption for gains on sale of domestic and foreign trading companies (EU and treaty countries)
- Tax exemption for Irish dividends
- Effective exemption for foreign dividends (thru use of foreign tax credits)
- Extensive domestic law withholding tax exemptions
- No thin capitalisation or Controlled Foreign Companies (CFC) rules
Manageable Transfer pricing regime
- Finance Act 2010 introduced transfer pricing (“TP”) rules to IrelandEnhances Ireland’s well regulated tax regime
- Assists Irish Revenue challenges to Multi-National companies from other jurisdictions
- Already has ‘wholly and exclusively’ test
- Imposes Arms Length Pricing (ALP) to understatement of Irish trading profits and overstatement of Irish trading expenses
As well as our favourable Taxation regime Ireland is still seen as a business friendly country, as evidenced by recent studies where Ireland ranks as number four in the world as the best country to do business and number one for flexibility and adaptability of our workforce.
If you are considering Ireland as a base for your business please do not hesitate to contact a member of our team who can assist you.
State Financial Supports for Small Businesses in Ireland
Small businesses in Ireland have continued to contribute to the growth and success of Ireland’s recovering economy. Many small businesses have been through some very difficult and testing economic times in recent years but remain one of the main driving forces for Ireland’s future economic growth.
Another key contributing factor to Ireland’s growth is the range of state support for such Irish small businesses. We have detailed below some of these State Financial Supports which may be of interest to small business owners in Ireland to assist them in their business and their growth.
Small Business Support Schemes
1. Employer Job (PRSI) Incentive Scheme
This scheme exempts employers from liability to pay their share of PRSI for certain employees for a maximum of 18 months. Employers who create new and additional jobs can avail of the scheme. While waiting for approval for the scheme, standard PRSI should be operated.
2. County Enterprise Board Employment grant
This grant scheme provides €8,000 to a business per new job created in respect of up to 10 employees in eligible projects and where it can be demonstrated a labour shortage does not exist. An application must be made to the Board for approval and must include details of PRSI and provide tax clearance certificate.
3. JobBridge - Internship Scheme
This schemes provides work experience placements to a business for a 6 or 9 month period. It offers valuable work experience for unemployed individuals wishing to learn new skills or jobseekers who are unable to get a job without experience. A business can avail of this scheme once it has a minimum of one full time employee working 30 hours or more per week and subject to Tax and PRSI. The intern receives an allowance of an additional €52.50 per week with their social welfare entitlement.
4. Revenue Job Assist
Employers who employ an individual who qualifies for Revenue Job Assist can make a double deduction of that employee’s wages from their company’s taxable income for up to 3 years provided that the employee remains with them. To qualify for this the position must be new, last at least 12 months and be for at least 30 hours per week.
5. Acumen Sales and Marketing Programme
There are a number of options available under this scheme whereby the salary of a full time sales person, part time sales person or a sales graduate can be funded by Acumen.
For example; Acumen will fund 50% of the cost of a full time Sales Person’s salary in the first year. The maximum cost covered can be up to €37,500 with Acumen paying up to €18,750.
Should you have any queries on any of the above support schemes please do not hesitate to contact us.Images: Shutterstock
Reasons To Do Business In Ireland – Skilled Workforce
1. Ireland’s workforce rankingIreland has always been regarded as a centre of excellence for education and remains within the top 20 countries for education in the Universitas 21 Ranking 2014. More importantly, Ireland ranked 1st in the world for availability of skilled labour in the IMD World Competitiveness Yearbook 2014. Such rankings were further substantiated by Manpower’s 2014 Talent shortage survey in which Ireland received the lowest ranking of just 2% for employers having difficulty in filling position. This is a very strong position to hold, given the global average of 36%. In past years, Ireland suffered during the Euro Zone recession, which resulted in a considerable number of our skilled labour force emigrating. Despite this, companies were still in a position to source strong, talented candidates to fill positions available. At present there are over 1,000 multinational companies (MNC’s) within Ireland and they currently employ over 150,000 of our 1.9 million strong workforce.
2. Ireland’s DemographicsIreland’s demographics are also very encouraging when attracting FDI. With over 50% of our population under the age of 35, the level of our older population dependent on state assistance is amongst the most favourable in Europe. Ireland has a workforce which is capable, highly adaptable, mobile and committed to achievement. With a projected increase in our population by 2021 of 1.4%, the future of Ireland’s skilled workforce remains strong. While there was negative movement in Ireland’s unemployment levels during the recessionary periods, there is clear evidence that Ireland is now experiencing a strong recovery as our unemployment levels have fallen for the past 3 years and were as low as 10% in March 2015.
3. Ireland’s Education SystemIreland’s ability to produce a skilled workforce stems from our long history of education. The Irish Government has always invested in our education system and looks to offer both relevant and varied courses, taking into account both the national and international markets and industry requirements. Universities and colleges in Ireland also ensure to provide students with courses which allows their students to develop the skills and talents necessary to peruse careers which drive the growth of Ireland’s economy. In 2013 alone, over 250,000 students enrolled in third level courses across universities and colleges. In studies conducted by OECD our education system ranked 9th in the work with their Better Life Survey indicating that 73% of adults in Ireland, aged between 25-64 years of age, have earned the equivalent of a high school degree. Such a strong focus has resulted in Ireland securing a reputation as a highly attractive location for FDI, with a significant number of Irish educated individuals holding some of the more senior and experienced roles in many of the multinational companies located in Ireland.
4. Developing, Attracting and Retaining Top TalentIt was noted in IMD’s World Talent Report 2014, that Ireland ranked 6th in the world for its ability to develop, attract and retain talent. Such a high ranking assists Ireland in sustaining the talent pool available for enterprises operating in our economy. When conducting the above report there are three main factors which are taken into consideration: Investment and Development – This aspect takes into consideration the investment in and development of home grown talent. It reviews areas such as public investment, quality of education, pupil teacher ratios and the implementation of apprenticeships and priority of employee training for companies. Appeal – The factors taken into consideration under appeal include a countries cost of living and quality of life, along with ability of a country to attract and retain talent. It also considers the level of worker motivation. Readiness – Under this heading, the report looks at the growth of the labour force, the quality of skills available and the experience and competencies of existing senior managers. It also reviews the ability of the education system to meet the talent demands of enterprises operating within the country. Under the above report Ireland has ranked within the top 10 of the following categories:
- skilled labour readily available
- financial skills
- competent senior managers
- worker motivation
- fit between education system and the needs of the competitive economy
- international experience of senior managers
- university education