How is a company taxed?
- How is a Company Taxed?
- What is the rate of Corporation Tax?
- How do I decide whether to trade as a Sole Trader or as a Company?
How is a Company Taxed?
Companies pay Corporation Tax. This tax is charged on the company’s profits which include both income and chargeable gains. A company’s income for tax purposes is calculated in accordance with Income Tax rules. Chargeable gains are calculated in accordance with Capital Gains Tax rules.
What is the rate of Corporation Tax?
There are three rates of Corporation Tax:
Rates effective from 1 January 2002
- 12.5% for trading income
- 25% for non-trading income
- 12.5% for small and medium-sized enterprises where the trading income does not exceed €253,948 (provision for marginal relief where income does not exceed €317,435).
The rate for Manufacturing, IFSC and Shannon companies remains at 10%.
How do I decide whether to trade as a Sole Trader or as a Company?
Your own individual circumstances will dictate whether you should operate as a limited company or as a sole trader. In addition to the taxation issues you need to consider there are various other practical and legal matters which should be taken into account when setting up a company and on which you should seek professional advice.