Irish Budget 2013: Corporation Tax Rates

6 December 2012

Important measures for international investors in Ireland and investment managers with Irish investment funds and SPVs

On Wednesday 5 December 2012, the Irish Minister for Finance presented Budget 2013, the Irish government’s fiscal programme of measures for the coming year, against an improving but still challenging economic backdrop.

This update summarises the relevant budget measures for international investors in Ireland, domestic companies and banks and multinational corporations with operations in Ireland and investment managers and arrangers with Irish investment funds and capital markets SPVs.

The government restated its commitment to the 12.5% corporation tax rate. Preservation of the 12.5% tax rate is one of the key components to Ireland’s corporation tax strategy and the government’s commitment to this is welcomed by those involved in Ireland’s international business sector. 

Corporate Tax Measures

Start-up companies’ relief has been amended to allow unused credits in the first three years of trading to be carried forward.  Previously, unused credits expired at the end of the three year period. 

The entire system relating to research and development credits is to be reviewed in 2013.  In the interim, the amount of expenditure eligible for the 25% credit will be doubled from €100,000 to €200,000.  This builds upon similar changes in Finance Act 2012.

The Employment and Investment Incentive scheme has been extended to 2020.  This is a scheme that gives income tax relief for investments in corporate trades.  It was introduced to replace the Business Expansion Scheme and connects the level of relief to the number of employees hired by the new business. 

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