Taxation in Ireland

The income tax in Ireland

Ireland has a tax credit system when calculating the income tax. Once the Irish income that will be taxed is determined, the tax is calculated and, if any, tax credits are deducted. Irish employees must apply for a Certificate of Tax Credits and Standard Rate Cut Off Point that will allow the PAYE  (Pay As You Earn) system to calculate the personal tax credit and band. Our Irish company formation experts can tell you more details about the PAYE system. The income tax also applies to all properties, gain and profits. The taxable income is divided into Irish schedules, as it follows:

• – Schedule C is for revenues from public dividends,
• – Schedule D applies profits from trading activities, interests, discounts, annual profits and rentals,
• – Schedule E applies to incomes from public offices, pensions and employment,
• – Schedule F applies to dividends earned from companies registered in Ireland.

The standard rate for the income tax is 20% and applies (in 2026) to the first EUR 44,000 for single persons, for the first EUR 48,000 for single parents and widowed persons qualifying for the single person child carer credit and the for the first EUR 53,000 for married couples or civil partners with one income (up to EUR 88,000 with two incomes). The Irish tax system also comprises a higher income tax rate established at 40%.

The taxation of companies in Ireland – presented by our Irish company formation consultants

Companies in Ireland are subject to the corporate tax of 12.5% applied to trading activities and 25% applied to non-trading activities. Non-trading income includes rents, interest and certain royalties; foreign dividends paid out of trading profits of EU/treaty-country companies can qualify for 12.5%, and since 2025 an optional participation exemption may apply. However, Ireland has concluded many double taxation agreements in order to avoid certain incomes such as dividends to be taxed twice. Foreign-owned companies are also subject to the 12.5% rate, although groups with revenue of EUR 750 million or more pay a 15% minimum effective rate under Pillar Two (since 2024), which is what makes Ireland a very attractive destination for foreign investors.

Our Ireland company formation agents present the other taxes applied to companies in this country:

• – the capital gains tax of 31% for disposals from 7 October 2026 (previously 33%; development land remains at 33%)
• – a carbon tax of EUR 71 per tonne of CO2 on petrol and diesel (since October 2025), rising annually towards EUR 100 by 2030,
• – stamp duty of 1% to 7.5% (1% on shares, 1%–6% on residential property, 7.5% on non-residential property; 15% on bulk purchases of houses).

Irish companies benefit from attractive tax exemptions, such as start-up relief from corporation tax (on trading income and gains on trade assets) of up to EUR 40,000 a year for the first five years of a new trade. The government also established a favorable tax regime for companies operating in the Research & Development sector.

We are at your service if you want to open a company in this country. Setting up a company in Ireland is a safe and legal option to reach the European and American markets with your products and services. Even non-residents can incorporate a firm in Ireland, giving them the opportunity to seize possibilities they would otherwise pass up in their home country. The process of forming a company in Ireland is not difficult with the help of our agents.

The value added tax in Ireland

The standard rate for the value added tax in Ireland is 23%, but reduced rates apply as it follows:

• – a 13.5% rate applies to construction and immovable goods, certain fuels and hotel accommodation (most medical services are exempt),
• – a 9% rate applies to gas and electricity, newspapers and sports facilities and, since 1 July 2026, to restaurant/catering food and hairdressing,
• – a 4.8% rate applies to livestock and greyhounds,
• – a 0% rate applies to most basic foodstuffs, printed books, children's clothing and footwear, and oral medicines

For detailed information about the Irish taxation system and registration for taxation purposes please contact our specialists in Ireland company formation matters.