How to Reduce Tax when in Ireland

If an international consultant is coming to the Ireland from abroad to provide services and/or work then the transverse of what has already been mentioned for UK/Irish ordinary residents working abroad will apply in that it may – depending on nationality – be possible to extricate themselves from their primary fiscal residence and work around different countries using a suitable company before intricating themselves back into their original place of ordinary fiscal residence. In the case of the Ireland, the fiscal year for self-employed consultants starts with the calendar year, which often provides – subject to applicable tax treaties – a honeymoon period for non-Irish based consultants.

What if I decide to base myself as a non-Irish domiciled person in the Ireland but still have work outside Ireland?

There are some very attractive incentives for those based in Ireland but offering their consultancy services abroad basically exempting much of their income from Irish tax exposure and these are apart from the benefits afforded to non-domiciled but resident individuals residing in Ireland.

If you become ordinarily resident in the Ireland but are non-Irish domiciled then – subject to various anti-avoidance provisions and having taken advice – it could well be the case that you could set up an external company to carry out all your non-Irish consultancy work and thus control Irish taxable remittances to the amount you actually need to live in the Ireland rather than pay personal taxes on all your worldwide income. However, it should be remembered that whilst Ireland has high – but very controllable income taxes – it has a very low corporate tax rate of only 12.5%. In addition, Ireland has not gone through the same changes to its domicile and residence laws as occurred in the UK making it even more attractive for those wishing to permanently reside in Ireland with there being no equivalent to the £30k-£50k annual duty/tax that applies to non-domiciled individuals having lived in the UK for more than 7 out of the last 9 years. Please see the UK Domicile & Residence above for more details.

General Irish Tax Incentives

Ireland like the UK has a very pro-business environment meaning that domestic tax planning incentives must not be forgotten especially the very friendly corporate tax rate of 12.5% but in many ways this is just the start of what is offered. For example, business start up’s can enjoys a tax holiday for the first two years whilst there are also significant research and development incentives and technical back-up facilities from the Irish Industrial Development Authority (IDA)

Ireland as a Tax Haven

Just like the UK, there is little doubt that Ireland is a very attractive and ‘safe’ fiscal location for non-domiciled individuals to live and in many ways is a far better prospect than living in a tax free location such as the Bahamas or Monaco. Why? Simply because unlike a tax haven Ireland enjoys full tax treaty protection and helps a non-domiciled person protect themselves from their original countries anti-avoidance provisions many of which having reverse burdens of proof and extrication taxes for those who try and leave and take up residence in a tax haven. However, in the case of the UK the very fact that there are many genuine business, social and economic attractions and that local taxes apply – albeit not evenly – mean that in most cases little can be done by original ‘home’ countries to penalise wealthy and/or successful non-domiciled individuals.

For more information on these benefits please contact one of our tax planning consultants.