Ireland will close the “double Irish” corporate tax loophole beginning January 1, 2015, by requiring all companies registered in Ireland after that date to also be tax resident, the Irish government has announced.
Multinational firms with existing arrangements in Ireland will be able to use transition rules that will allow them to continue to use the loophole until the end of 2020, though, according to budget documents released October 14.
The legislative change to Ireland’s company residence rules will be introduced in Finance Bill 2014.
Ireland also announced a package of new business incentives in the budget. The government said it will launch a consultation in late 2014 on the introduction of a “knowledge development box” regime for the taxation of intangible assets.
In addition, the existing s.291A capital allowances regime for expenditure on intangible assets will be enhanced in Finance Bill 2014. The current 80% cap on the aggregate amount of allowances and related interest expense that may be claimed will be removed. Also, the definition of specified intangible assets will be amended to explicitly include customer lists, the government said.
No changes will be made to Ireland’s low 12.5% corporate tax rate.
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