Corporation Tax

Corporation Tax is chargeable on the worldwide profits of Irish Companies. This Tax is computed in the same way as is Income Tax.

Corporation Tax Rates

• There are two rates
  12.5% for trading income
• 25% for non-trading income, for example rental and investment income.

Calculations

A Company’s annual trading profits when adjusted for tax purposes form the taxable amount in a Corporation Tax return. Capital allowances (a % of business fixed assets annually) are deducted from the taxable profit figure in order to arrive at the taxable amount.

Close Companies
A close Company is an Irish resident company that is controlled by five or fewer shareholders. This number can be higher if the shareholders are also directors.

Trading losses

A Company’s trading losses can be offset against:-

• Other income in the same accounting period.
• Trading income for the immediately preceding accounting period.

Contact us on 00353 (0)1 4578138 to advise you about all of your Tax obligations.

Preliminary

Large companies

Large companies (companies whose CT liability exceeded €200,000 in the previous accounting period) have the option to  pay preliminary tax in two instalments. In situations where the previous accounting period is less that twelve months the tax due must be annualised in order to determine if the company qualifies as a large company.

Members of group companies are allowed to use notional allocation of preliminary tax. The preliminary tax paid by the group will be assessed to minimise the amount of interest that large companies have to pay. Companies who chose this option must first apply to Revenue’s Debt Management Task Force. They must pay 100% of the corporation tax due by the return filing date.

Small companies

Small companies (companies who CT liability does not exceed €200,000 in the previous accounting period) can base their preliminary tax for an accounting period on:-

– 100% of their corporation tax liability for the previous accounting period;

– 90% of their corporation tax liability for the current period, with the provision for a top-up payment to be made.

The amount of preliminary tax paid cannot be less than the lower of either of these. If the 100% rule is chosen and the previous period is less than 12 months, the corporation tax liability must be annualised.

Filing of Corporation Tax returns and payment of tax:

All CT returns must be filed using the Revenue Online Service (ROS). Payment of corporation tax must be paid using ROS also to comply with mandatory e-filing regulations.

Form CT1 and Form 46G (Company) are used for filing corporation tax returns. Filing of corporation tax liabilities and payment of tax liabilities must b e completed nine months after the end of the company’s accounting period. Payment of
corporation tax liabilities must be made before the 23d day of the ninth month.

Late payment incomplete payment of CT will leave a company liable to interest charges at a daily rate of 0.0219%. CT returns filed after the filing deadline are subject to a surcharge of 5% of the tax due up to a maximum of €12,695 if filed within two months of the filing date. This surcharge increases to 10% of the tax due up to a maximum of €63,485 if the tax return is filed more than two months after the filing date.

CT returns filed after the filing deadline will result in restrictions being applied to certain reliefs claimed by the company. These reliefs include excess capital allowance, loss relief and group relief.

For all tax related issues contact us on +353 (0)1 4578138 or contact here