HOW TO PROCEED
An Irish Holding Company is a company which falls within the scope of general tax law and may benefit from the double taxation treaties concluded by Ireland and the European tax directives.
There are no limitations on the activities of the company.
An Irish Holding Company can be constituted as a Private Limited Company (Ltd) or a Public Limited Company (PLC).
The minimum share capital for incorporation of an Irish “PLC” is €38,100 25% of which must be paid up. There is no minimum share capital for a “Ltd” company. However the share capital must be fully paid and a 0.5% capital duty is payable on issued share capital which increases to 1% for transfers and subsequent capital increases.
Taxable income is based on the annual financial statements prepared in accordance with generally accepted accounting principles and subject to adjustments.
Expenses incurred exclusively for the purposes of the business are deductible while expenses incurred with exempt income are not deductible.
Dividends and other profit distributions received by an Irish company from another Irish company are exempt from tax.
Dividend and other profits received by an Irish company from its foreign subsidiary are liable to tax as passive income at a rate of 25%. However, credit against Irish corporate tax for tax paid abroad is available.
Credit not used in a certain fiscal year may be carried forward to offset future dividends received.
Capital gains from disposal of shares of foreign companies are exempt from tax if the following conditions apply:
Patent royalties received by Irish resident companies from patents created in Ireland are exempt if certain conditions are satisfied.
Besides the common advantages of a holding company, the Irish Holding Company may also enjoy from the following:
Dividends paid by resident companies are exempt from withholding tax if:
Interest paid by Irish holding companies to an EU or treaty country resident company is exempt from withholding tax if connected with a trade or business carried on in Ireland.
Irish companies may claim interest relief on borrowed funds for acquisition of foreign subsidiaries if such funds provide from a parent resident in an EU or treaty country.
Double Tax Treaties
11 If the recipient is not a company controlled by residents
14 Interest paid to an EU or treaty country company is usually exempt from withholding tax.
15 The higher rate applies to rental payments.
16 Withholding tax applies only to patent royalties or annual payments.
17 Unless shares derive from land in Ireland and are owned by Irish residents.
A bespoke 'offshore' solution can be complex and requires careful planning and execution. We
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