Corporation Tax Corporation Tax A company pays corporation tax on total profits. Total profits include all taxable income earned by the company and capital gains arising on the disposal of capital assets.

Corporation Tax The Charge to Corporation Tax A company resident in Ireland is subject to corporation tax on its worldwide profits A non-resident company operating in Ireland through a permanent establishment is subject to corporation tax on income earned by the PE and gains arising from assets situated in Ireland or used for the purposes of carrying on a trade through an Irish PE.

Corporation Tax The Charge to Corporation Tax A non-resident company that does not have a PE in Ireland will be subject to income tax (not CT) on Irish source income, and subject to CGT (not CT) on gains arising on specified assets. A non-resident company with an Irish PE, disposing of assets unrelated to the trade of the PE, will be subject to CGT on the disposal

Corporation Tax A permanent establishment Ireland – UK Double Tax Treaty ‘a fixed place of business in which the business of the enterprise is wholly or partly carried on’

Corporation Tax A permanent establishment A permanent establishment includes: ‘a place of management; a branch; an office; a factory; a workshop;

Corporation Tax A permanent establishment A permanent establishment includes: a mine, oil well, quarry or other place of extraction of natural resources; an installation or structure used for the exploration of natural resources; a building site or construction or installation project which lasts for more than six months.’

Corporation Tax A permanent establishment A permanent establishment does not include: the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

Corporation Tax A permanent establishment A permanent establishment does not include: the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

Corporation Tax A permanent establishment A permanent establishment does not include: the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.

Corporation Tax A permanent establishment A person who has the power to conclude contracts (other than the purchase of goods and merchandised) on behalf of the non-resident company is a PE Offshore exploration or exploitation is deemed to be a PE Carrying on business through an independent broker or agent does not constitute a PE

Corporation Tax A permanent establishment A company controlled by a non-resident company does not constitute a PE of the non-resident company

Corporation Tax Company Residence Two tests are applied to determine the residence status of a company: The statutory test, and The central management and control test

Corporation Tax Company Residence – the statutory test A company is resident in Ireland if it is incorporated in Ireland. There are two exceptions to this rule: The Trading Exemption The Treaty Exemption

Corporation Tax Company Residence – the statutory test The Trading Exemption applies to a company carrying on a trade in Ireland, and Is ultimately controlled by person(s) resident in an EU member state or in a country that Ireland has a Double Tax Treaty with, or The company or a related company is a quoted company

Corporation Tax Company Residence – the statutory test Generally, a company is controlled by person(s) owning more than 50% of the share capital/voting rights or entitled to more than 50% of the distribution of income/assets on winding up.

Corporation Tax Company Residence – the statutory test The Treaty exemption applies to a company that is not regarded as resident in the State under the provisions of a Double Tax Treaty. Double Tax Treaties set out the rules to determine the main country in which a company will be liable to pay tax and aims to reduce the effect of double taxation.

Corporation Tax Company Residence If a company is not resident in Ireland by virtue of the statutory test, it can still be resident under the central management and control test

Corporation Tax Company Residence – the central management and control test Not in legislation but developed through case law. Relates to the strategic control of the company Factors to be considered: Where are directors’ meetings held? Where do the majority of directors reside?

Corporation Tax Company Residence – the central management and control test Factors to be considered: Where are the shareholders’ meetings held? Where is the negotiation of major contracts undertaken? Where are the questions of important policy determined? Where is the head office of the company?

Corporation Tax Company Residence – the central management and control test Factors to be considered: Where are the books of account kept? Where are the accounts prepared and examined? Where are the accounts audited? Where are the minute books kept? Where is the company seal kept?

Corporation Tax Company Residence – the central management and control test Factors to be considered: Where is the share register kept? From where are dividends declared? Where are the profits realised? Where are the company’s bank accounts?

Corporation Tax Company Residence – For Companies Incorporated on or after 1 January 2015 Two tests are applied to determine the residence status of a company: The statutory test, and The central management and control test

Corporation Tax Company Residence – the statutory test A company is resident in Ireland if it is incorporated in Ireland. There is one exception to this rule: The Treaty Exemption The trading exemption does not apply for companies incorporated after 31 December 2014

Corporation Tax Company Residence – For all Irish Incorporated Companies from 1 January 2021 All Irish incorporated companies will be tax resident in Ireland