🇮🇪 Ireland Company Formation
12.5% CIT on trading income, Knowledge Development Box at 10%, and 30% R&D tax credit. The English-speaking EU base with 76 tax treaties and the strongest US–EU bridge.
Updated April 2026
Corp Tax
12.5%
KDB IP Rate
10%
R&D Credit
30%
Tax Treaties
76
Passport Rank
190 countries
Tax System
Rates and incentives
| Tax | Rate | Note |
|---|---|---|
| Corporate income tax — trading | 12.5% | On trading/active business income. One of the lowest standard rates in the EU. |
| Corporate income tax — passive | 25% | On non-trading income: investment income, rental income, certain foreign income. |
| Knowledge Development Box | 10% | On qualifying IP income from patents and copyrighted software. OECD nexus approach. |
| R&D tax credit | 30% | Credit on qualifying R&D expenditure. Increased from 25% in 2024. |
| Capital gains tax | 33% | Section 626B participation exemption for disposals of 5%+ qualifying shareholdings held 12+ months. |
| Withholding — dividends | 25% | EU Parent-Subsidiary Directive applies (0% for qualifying EU parents). Treaty rates can reach 0%. |
Why Ireland
Key advantages
12.5% CIT — consistently the lowest standard EU rate
Ireland has maintained its 12.5% trading rate for over two decades. Combined with participation exemption from 2025, it provides one of the most stable and competitive corporate tax environments in Europe.
Knowledge Development Box at 10%
Qualifying IP income from patents and copyrighted software taxed at 10%. OECD-compliant nexus approach. Combined with 30% R&D tax credit, effective rate on innovation income is among the lowest in the EU.
Strongest US–EU treaty bridge
Ireland's DTA with the United States is the most favourable of any EU member state. English-speaking common law system makes Ireland the natural EU base for US companies.
Section 626B participation exemption
Capital gains from disposal of qualifying shareholdings (5%+, 12+ months, in EU/DTA-resident trading companies) are fully exempt. New foreign dividend participation exemption from 2025.
EU's leading fund domicile
Ireland is the largest EU domicile for UCITS and AIFs. Central Bank of Ireland issues e-money, payment, and fund management licenses with full EU passporting.
What We Build
Full scope of implementation
- ✓Irish Limited Company (LTD) or Section 110 SPV registration
- ✓EEA-resident director provision or Section 137 bond arrangement
- ✓Tax registration with Revenue Commissioners
- ✓Knowledge Development Box application and IP structuring
- ✓Corporate bank account — full KYC file and compliance dossier
- ✓Annual CRO return, corporation tax filing, and audit coordination
- ✓Transfer pricing documentation for related-party transactions
Who This Is For
Ideal client profiles
2025 – 2026
What has changed
Participation exemption for foreign dividends — from January 2025
New participation exemption eliminates Irish tax on qualifying foreign dividends. Strengthens Ireland's position as an EU holding jurisdiction.
⚠ Pillar Two — 15% minimum tax for large MNEs
QDMTT and IIR effective from 2024, UTPR from 2025. Raises effective rate to 15% for groups with consolidated revenue above EUR 750M. SMEs unaffected.
R&D tax credit increased to 30%
Enhanced from 25%. Combined with KDB at 10%, Ireland offers one of the most competitive innovation tax packages in the EU.
Common Questions
FAQ
Does the 12.5% rate apply to all income?
No. 12.5% applies to active trading income only. Passive income (investment returns, rental income, certain dividends) is taxed at 25%. Structures must be designed to ensure income qualifies as trading. Close company surcharge of 20% applies to undistributed passive income.
What is the Knowledge Development Box?
The KDB taxes qualifying IP income at 10% (increased from 6.25% in 2024). Qualifying assets include patents and copyrighted software developed by the Irish company. The nexus fraction links the benefit to qualifying R&D expenditure actually incurred in Ireland.
Do I need an Irish-resident director?
At least one EEA-resident director is required by the Companies Act 2014. The alternative is a Section 137 bond of EUR 25,000 with Revenue Commissioners (valid 2 years, renewable). For banking and substance purposes, a genuine Irish-resident director is strongly recommended.
How does Ireland compare post-Pillar Two?
For large MNEs above the EUR 750M threshold, the effective rate rises to 15%. For SMEs and mid-market companies, 12.5% remains unchanged. Ireland's ecosystem — talent, common law, EU access, English language — continues to differentiate it from competitors at the same rate.