Ireland Corporate Tax - Guide for international expansion

Are you planning to do business in Ireland? Then it’s essential to understand how corporate income tax (CIT) works and what it means for your company.

In this guide, we’ll break down everything you need to know about corporate taxes in Ireland, from setting up your business to staying compliant. Whether you’re launching a new venture or expanding your business, understanding your tax obligations is key to running a successful operation.

And if you're looking for smart ways to save money and manage international payments, we’ll also show you how Wise Business can help simplify cross-border transactions and keep your finances running smoothly.

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This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Ireland's corporate tax rate in 2026

The basic corporate income tax rate in Ireland is 12.5%¹ since 2003. Which is significantly lower than the OECD average of around 23%.² The tax is levied on a company’s profits over an accounting period of below 12 months.

Ireland also offers certain companies that qualify for the Knowledge Development Box (KDB) scheme a reduced corporation tax rate on profits earned from qualifying IP, lowering the rate from the standard 12.5% to as low as 10% (or previously 6.25%), depending on the period.³

Additionally, there’s a higher tax rate of 25%¹ for non-trading (or passive) income from rentals, investments, mining, and petroleum. For example, if a company earns income from renting out properties, that income is considered passive and taxed at a rate of 25%.

Companies resident in Ireland are taxed on all their income and gains worldwide. A company is deemed to be tax resident if it was incorporated in Ireland on or after 1 January 2015.⁴

Non-resident companies are only taxed on trading profits of an Irish branch or agency and on certain Irish income, typically via withholding tax (for example, tax deducted before paying dividends or royalties).

How to pay corporate tax in Ireland

For most companies registered in Ireland, you're required by Revenue (Ireland’s tax authority) to use their online system called Revenue Online Services (ROS)¹¹ to file and pay your corporate tax.

ROS is a 24/7 online system that allows you to check your details, pay taxes you owe, file tax returns, and even claim refunds. Using ROS to pay and file your corporate tax may also give you an extension of existing deadlines for paying tax and filing returns.

The majority of businesses are legally obliged to use ROS to file and pay their corporate tax. Failure to use ROS to file your returns and make payments can attract a penalty of €1,520 each time you don’t use it.¹²

Corporate taxes in Ireland are paid in Euros. If your company’s functional currency is not the Euro, it must be exchanged into Euros. However, the Irish Revenue may waive interest charges on underpaid preliminary Corporation Tax if the underpayment occurred solely due to changes in currency exchange rates.¹³

A company in Ireland is expected to file its corporation tax return and pay any tax it owes later than nine months after the end of its accounting period. Specifically, a company must file and pay by the 23rd day of the ninth month electronically.¹⁴

If a company pays its corporate tax late or does not pay the full amount, interest will apply at a daily rate of 0.0219%.¹⁴ The interest is calculated by multiplying together:

• The amount of tax that is underpaid.
• The number of days the payment is late
• The daily interest rate.

Let’s say your company has a turnover of €1.5 million and operates with a profit margin of 10%, giving it a taxable profit of €150,000.
At Ireland’s standard corporation tax rate of 12.5%, the tax owed would be:

€150,000 × 12.5% = €18,750

Now, if your company misses the tax payment deadline by 30 days, it will be charged daily interest at a rate of 0.0219%.

The interest is calculated as:

€18,750 × 30 × 0.0219% = €123.28

So, the total amount the company would owe is:

€18,750 (tax) + €123.28 (interest) = €18,873.28

Note: You cannot appeal interest charges to the Tax Appeals Commission. Once interest has been charged, you must pay the full amount owed, and it cannot be reduced.

In addition to interest, if a company submits its tax return after the deadline, there will also be a surcharge of:¹⁴

• 5% of the tax due, up to €12,695 maximum, if the return is filed within two months of the deadline.
• 10% of the tax due, up to €63,485 maximum, if the return is filed more than two months after the deadline.

Filing your taxes late can also impact your ability to claim certain tax reliefs, depending on how late the return is. This can result in restrictions on capital allowances, loss relief, and group relief.

When incorporating your business in Ireland, having the right financial tools will make the process easier. Using a platform like Wise Business makes it easy for international businesses to expand with local EUR account details (only with Wise Business Advanced) . Having a local account makes it easy to pay for incorporation, registration fees, and government fees in local currency without paying high fees.

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Tax compliance in Ireland

Here are some helpful tips to keep your company fully compliant with the Irish tax regulations:

• Register for taxes early: After incorporating your company, register for taxes early to avoid penalties. By registering for taxes on Revenue, you can legally operate in Ireland and fulfil your tax obligations by paying your Corporation Tax, VAT, and PAYE.
• Appoint a company secretary: In Ireland, all Private Limited Companies are legally required to appoint a company secretary. The secretary's primary role is to ensure the company complies with its legal and tax obligations. This includes filing annual returns with the Companies Registration Office (CRO) and keeping statutory registers accurate and up to date.
• File Annual Returns: As part of a legal obligation, you must file annual returns with the Companies Registration Office (CRO) even if your company has not traded during the year. This is the date your company was incorporated. You must file your annual return within 28 days of this date to stay compliant.

International expansion to Ireland

Ireland provides a supportive environment for companies expanding internationally.

First of all, Ireland has one of the lowest corporate tax rates, at 12.5%. This is significantly below the average of developed markets, such as the EU (approximately 21%)⁵ and the UK (approximately 25%)⁶. This has helped Ireland attract more than 1,800 multinational companies across various sectors.⁷

Non-EU companies gain direct access to the European Union’s single market, approximately 446 million consumers, by setting up a shop in Ireland. This means your non-EU company can conduct business operations across all EU member states without trade barriers or restrictions.

With the UK no longer being part of the EU, Ireland remains the only native English-speaking nation within the EU. Companies from English-speaking countries like the UK or the US overcome language barriers when conducting their business operations.

Lastly, Ireland has a highly skilled and educated workforce, which attracts investments. More than 65% of 25-34-year-olds in Ireland have a third-level qualification, making Ireland one of the most educated countries in Europe.⁸

Here’s a quick walkthrough of how businesses can set up a company in Ireland:

• Start with market research to give you a better understanding of the business environment in Ireland and your target audience.
• Develop a solid business plan that fits the market you’re targeting.
• Identify the requirements for your new business, such as business name, business location, talent, and others.
• Choose a legal structure.
• Register your business with the Companies Registration Office.
• Set up tax registration with your local Revenue Commissioners.
• Create a solid system for keeping business records.

Now that you have a roadmap for setting up a company in Ireland, let’s take a closer look at the business incorporation process.

Incorporation of a business in Ireland

To incorporate a business in Ireland, you’ll need to visit the Companies Registration Office (CRO) website.

Additionally, you need the following information to incorporate a company in Ireland:

• Company name - a unique name for your Irish company.
• Type of company (more on this below)
• Your company‘s constitution - a legal document that sets out the rules on how your company is run.
• Registered office - an office address which must be located in the Republic of Ireland
• Directors - the people appointed to manage the company on behalf of the shareholders.
• Company secretary - a person who ensures Annual Returns are filed on time.
• Authorised and Issued Share Capital - the maximum amount of share capital a company can issue to shareholders.
• Shareholders - the owners of the company.

Note: The Irish company law requires at least one director to be resident in a European Economic Area (EEA) member state to ensure local accountability for compliance with regulations. If this condition is not met, the company must secure a €25,000 bond or obtain a certificate showing a real and continuous economic link to Ireland.⁹

Business entities in Ireland

According to the Companies Act 2014¹⁰, here are some of the major types of business entities in Ireland:

• Private Company Limited by Shares (Ltd): A Limited Liability Company that allows shareholders to have limited liability. It’s the most frequently incorporated entity for private and commercial companies in Ireland. It requires one director and a separate secretary. This entity is also required to file an Annual Return with the Companies Registration Office (CRO), even if it has not traded.
• Designated Activity Company (DAC): This is a limited company that must state a specific business purpose in its constitution. As such, the entity cannot operate outside the scope of that purpose.
• Company Limited by Guarantee (CLG): This is ideal for a non-profit organisation such as social clubs, charities, and trade associations. It doesn’t have shareholders or share capital.
• Public Limited Company (PLC): This is ideal for businesses that plan to list on a stock exchange. They must have at least two directors, and there is no limit on the number of shareholders.

International corporate tax best practices

Here are some of the best strategies to ensure compliance with local tax laws, save more money, and reduce tax burdens.

Stay compliant with local and international tax laws

Complete the legal registration process in every country where your business operates. File all required tax returns on time to avoid penalties, and ensure you stay up to date with local tax laws to remain fully compliant.

In the same vein, companies should understand and adhere to global standards set by organisations like the Organisation for Economic Co-operation and Development (OECD). With frameworks like Base Erosion and Profit Shifting (BEPS) and Pillar Two Global Minimum Tax, companies can ensure they are transparent, prevent tax avoidance, and avoid legal risks.

Leverage double taxation treaties (DTTs)

DTTs are essential in making sure that you’re not taxed on the same income twice. Therefore, CFOs and Directors need to have a clear understanding of these treaties between the countries in which your business operates and how they can potentially relieve your tax burden. Ireland has Double Taxation Agreements (DTAs) with 78 countries (75 of which are in effect).¹⁵

Maintain up-to-date and transparent financial records

Maintaining clear and up-to-date financial records helps companies prepare accurate tax returns, reducing the risk of errors that could lead to penalties. Additionally, having organised financial records simplifies the process during financial audits.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Ireland efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.
• Get paid like a local: Use local account details (only with Wise Business Advanced) for 8+ major currencies to easily receive payments from customers or investors.
• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.
• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.
• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate Tax in Ireland

Who is liable for corporate tax in Ireland?

Resident and non-resident companies are liable for corporate tax in Ireland.

Companies considered tax residents in Ireland are required to pay corporate tax on their worldwide profits. This includes a tax rate of 12.5% on trading income and a 25% tax rate on non-trading or passive income.

Non-resident companies are also liable for corporate taxes of 12.5% on trading income earned through a branch or agency in Ireland. Additionally, they are required to pay a non-trading fee on passive income generated in Ireland.

Are there any tax incentives for businesses in Ireland?

In addition to the low corporate fees that Ireland offers, there is also a wide range of tax incentives, such as:

• A 25% R&D Tax Credit on eligible research and development expenses
• Startup relief of up to 3% years
• A reduction of the 6.25% corporate tax rate on profits from qualifying intellectual property (IP).
• Accelerated Capital Allowances of 100% when investing in energy-efficient equipment.

What is the tax treatment of dividends in Ireland?

The Irish government taxes dividend income at a 25% rate. Also known as Dividend Withholding Tax (DWT). It is deducted at the source before dividends are paid to the shareholder.

You are obliged to pay tax on the dividends at your marginal tax rate before the DWT, including¹⁶:

• Income Tax (e.g., 20% or 40%)
• Universal Social Charge (USC)
• Pay Related Social Insurance (PRSI)

You can request a refund if the DWT exceeds your tax liability on the dividend income.

What is the process for registering for corporate tax in Ireland?

To register for corporate tax in Ireland, first incorporate your company with the Companies Registration Office (CRO). Then, submit a TR2 form (or TR2(FT) for non-resident companies) to Revenue to register your business for Corporation Tax.

What are the common pitfalls to avoid regarding corporate tax in Ireland?

Here are some common issues to watch out for:

• Failing to register for corporate tax within 30 days of starting to trade.
• Incorrectly applying the 12.5% trading rate to income that should be taxed at 25% (non-trading income).
• Poor record-keeping can cause compliance issues during Revenue audits.
• Missing out on tax reliefs and credits, such as the R&D Tax Credit or startup relief, due to a lack of awareness.

Sources used in this article:

1. Revenue Ireland - Basis of Charge
2. Tax Foundation - Corporate Tax Rates by Country, 2024
3. Revenue Ireland - Company Residency Rules
4. Revenue Ireland - Knowledge Development Box (KDB)
5. Tax Foundation - Corporate Income Tax Rates in Europe
6. Gov. UK - Corporation Tax Rates
7. European Economic Area Resident Director - Leaflet 17
8. Educational Attainment Thematic Report 2024
9. European Economic Area Resident Director - Leaflet 17
10. CRO - Company Type Information
11. Revenue Ireland - Online Services
12. Revenue Ireland - Mandatory eFiling
13. Revenue Ireland - Part 41A-07-01
14. Revenue Ireland - Payment and Filing
15. Revenue Ireland - Double Taxation Treaties
16. Revenue Ireland - Dividend Income

Sources last checked 13/08/2025

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