Corporation Tax

Corporation Tax is charged on all profits (income and gains), wherever arising, of companies resident in the State, with some exceptions, and non-resident companies who trade in the State through a branch or agency.

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 two rates of Corporation Tax:

  • 12.5% for trading income unless the income is from an excepted trade* in which case the rate is 25%
  • 25% for non-trading income (e.g. investment income, rental income)

* Excepted trades include certain land dealing activities, income from working minerals and petroleum activities

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.

Tax & Duty Manuals - Section 16 FOI Act

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