Corporation tax rate

The 12.5% corporation tax rate will be maintained.

Tax residence of companies

As a default measure (subject to the provisions of double tax treaties) all companies incorporated in Ireland from 1 January 2015 will be tax resident in Ireland.  For existing companies utilising the current rules there will be a transitional period up to the end of 2020.

3 year tax exemption for start-up companies

The relief from corporation tax on profits is being extended to new businesses starting in 2015.  This measure will be reviewed in 2015.

Changes to R&D tax credit

From 1 January 2015 the 2003 base year restriction will be removed.
 
Capital allowances for expenditure on intangible assets

Under current rules companies are only permitted to utilise allowances up to a maximum of 80% of the trading income from the trade in which the acquired assets are used.  This restriction will no longer apply.

Accelerated capital allowances for expenditure on Energy Efficient Equipment

The availability of accelerated capital allowances on energy efficient equipment is being extended for three years up until the end of 2017.

Employment and Investment Incentive Scheme

Subject to EU approval being granted, companies will be permitted to raise €5m per annum under this scheme with a lifetime maximum of €15m.  Activities that are permitted to avail of the scheme will now include nursing homes, medium sized enterprises in non-assisted areas and internationally traded financial services certified by Enterprise Ireland.  Hotel, guest houses and self catering accommodation activities can avail of this incentive for a further three years.
Investors will be required to hold their shares for four years instead of three years.

Foreign Earnings Deduction

This tax relief for employees travelling to and working in certain foreign countries is being extended to include Chile, Mexico, and some other countries in the Middle East and Asia.  The requirement to have 60 qualifying days spent in those countries is being reduced to 40 days, the minimum stay in a country is reduced to three days and travelling time will be taken into account as time spent abroad.

Special Assignee Relief Programme

This is a relief aimed at foreign workers working in Ireland.  It is being extended for an additional three years up to the end of 2017.  Further amendments are being made to make it easier for employees to avail of the relief.

Knowledge Development Box

The Government plans to introduce an income-based tax incentive regime for intangible assets and will open consultations on this issue in late 2014 with measures to be introduced in next year’s Finance Bill.  Similar measures have proved very attractive in the UK.