Ireland is referred to as a tax haven because of the country's taxation and economic policies. Legislation heavily favors the establishment and opera

Is Ireland a Low Tax Haven?

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2021-05-23 21:30:03

Ireland is referred to as a tax haven because of the country's taxation and economic policies. Legislation heavily favors the establishment and operation of corporations, and the economic environment is very hospitable for all corporations, especially those invested in research, development, and innovation.

The United States has a flat corporate tax rate of 21%. Ireland’s taxation rate for corporations is 12.5%. In addition, Ireland only charges a corporate tax rate of 6.25% for revenue tied to a company’s patent or intellectual property. This lower rate is intended to provide tax breaks for the protection and support of royalties derived from intellectual property. Ireland's development as a low corporate tax regime can be traced to 1956, when it introduced tax relief on export profits.

Ireland’s taxation policies on research and development positions offer great incentives for corporations to invest in innovative ideas. Ireland has enacted policies allowing research and development intensive start-ups the ability to claim back taxes. This is true even if the start-up is incurring losses and cannot pay their corporate tax. In addition, the 25% tax credit is applied against the corporate tax rate of only 12.5%.