News 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.

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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:

Corporation Tax

• 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.

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.