By Carolyn de Búrca, 11th June 2020
An Irish Permanent Establishment (PE) may be described as a fixed place of business within the State in which the business of an enterprise is wholly or partly carried on.
The business must perform revenue generating activity on an ongoing and persistent basis or create value of some kind to be considered as a permanent establishment in Ireland.
A permanent establishment may also be determined if the business has an agent or an employee acting on behalf of the company. This person must be authorised to do business and/or be authorised to conclude contracts on behalf of the company in Ireland. There is no requirement for the agent to be resident in Ireland.
Benefits of a Permanent Establishment
As a permanent establishment, there is a requirement to report and pay corporate taxes to the local authority within that jurisdiction on the profits arising from the business.
Due to this, an Irish based permanent establishment could avail of Ireland’s favourable corporation tax rate of 12.5%.
If you are deemed to have a permanent establishment as a sole trader or a partnership, Ireland’s income tax rate may be more attractive, depending on the business’ country of origin.
What type of entity is considered to be a permanent establishment?
As there is a requirement to have a fixed place of business within the State, the following may be considered as a permanent establishment:
- a branch
- a place of management
- an office
- a building site or construction or installation project which lasts for more than six months
- a factory
- a mine, oil well, quarry, or other place of extraction of natural resources
The following are examples of cases where a permanent establishment in Ireland would not be considered:
- use of a facility solely for the purpose of storage, display or delivery of goods or merchandise belonging to the business
- the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information for the business
- the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character for the business
How to register a permanent establishment in Ireland
One way in which you could register a permanent establishment is by registering an existing non-Irish company as a branch (external company). Visit our service page to find out more information on setting up a branch company in Ireland.
You could also consider incorporating a separate subsidiary in Ireland in the form of a Private Company Limited by Shares (or another company type). Visit our service page to find out more information on setting up an Irish company
As Ireland’s leading Company Formation & Company Secretarial experts, Company Bureau are happy to assist you with your permanent establishment queries and with registering your PE. Please complete our Contact Form or call to speak with an expert on +353 (01) 646 1625.
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.