Ireland’s Corporation Tax Explained: Rates, Exemptions, and Compliance Tips

By Shannon Power, 24^th February 2025

When it comes to Corporation Tax in Europe, the landscape is diverse, with each country offering different rates and incentives. Ireland, in particular, has built a reputation as one of the most attractive corporate environments, largely due to its low corporation tax rate.

However, understanding Ireland’s corporation tax system goes beyond the headline rate. Businesses must be aware of key exemptions, reliefs, and compliance obligations to fully benefit from the system while ensuring they meet their legal requirements. In this guide, we’ll break down Ireland’s corporation tax rates, available tax reliefs, and essential compliance tips to help businesses navigate their tax obligations effectively.

Ireland’s Corporation Tax

Ireland remains a key hub for international business, offering a highly competitive tax environment. The standard corporation tax rate stands at 12.5% for most businesses, while companies engaged in Research and Development (R&D) benefit from a reduced 6.25% rate under the Knowledge Development Box (KDB).

However, recent global tax reforms have introduced new tax obligations. As part of the OECD’s global tax reform, Ireland has implemented a 15% minimum tax rate for multinational corporations with global revenues exceeding €750 million. Meanwhile, non-trading income and excepted trades are subject to a higher 25% rate.

Despite these changes, Ireland continues to be a top choice for businesses due to its pro-business policies, extensive tax reliefs, and strong international trade agreements.

Tax Exemptions & Benefits

Aside from the highly attractive corporate tax rates, Ireland also boasts multiple tax exemptions and benefits that you should be aware of to optimise your finances.

• Startup Relief for Entrepreneurs (SURE): Revenue offers the SURE scheme to new businesses which provides a refund of Income Tax that you paid in previous years. You can claim the relief if you are starting your own business and you are:

• • an employee

• • an unemployed person

• • a person who has recently been made redundant

• Section 486C Tax Relief: This relief, also provided by Revenue, offers a reduction in Corporation Tax for the first five years of trading. Businesses may qualify for full relief if their corporation tax liability is €40,000 or less in a tax year. For those with a tax liability between €40,000 and €60,000, partial relief may be available.

• R&D Tax Credit: This 30% credit on eligible expenditure was introduced to promote innovation. It can be used to reduce a company’s corporation tax liability or, for loss-making businesses, claimed as a cash refund.

Compliance and Filing Requirements 

Ensuring compliance with Ireland’s corporation tax system is crucial for avoiding penalties and maintaining good standing with Revenue. All companies must register for Corporation Tax within four weeks of commencing trade.

Once registered, businesses must adhere to strict filing deadlines. The Corporation Tax Return is due nine months after the company’s financial year-end, but no later than the 23rd of that month if filing online. Companies must also make preliminary tax payments. Smaller businesses with a Corporation Tax liability under €200,000 pay a single instalment, while larger businesses must make two payments. Failing to meet these deadlines can result in penalties, surcharges, and interest charges.

Common compliance pitfalls include late filings, which incur a surcharge of 5% for delays up to two months and 10% for longer delays. To avoid these issues, companies should maintain clear tax records and work with professional advisors to ensure timely compliance.

Missed your filing deadline? Use our free annual return late filing fee calculator to estimate your penalties and get back on track!

Conclusion 

Ireland’s corporation tax system remains one of the most attractive in Europe, offering competitive rates, valuable exemptions, and a business-friendly environment. While the 12.5% standard rate continues to be a major draw for companies, businesses must also be aware of other tax rates, such as the 6.25% Knowledge Development Box rate, the new 15% global minimum tax for large multinationals, and the 25% rate on non-trading income.

However, by taking advantage of the available tax reliefs, such as startup tax exemptions, the R&D tax credit, and Section 486C relief, companies can optimise their tax position.

Whether you’re a startup, an SME, or a multinational, understanding Ireland’s corporation tax system can help you make informed financial decisions and ensure long-term success.

Need help with tax compliance? Contact the experts at Company Bureau today! Give us a call at +353(0)1 6461625 or fill out our online contact form.

Disclaimer: This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.