ICLG The International Comparative Legal Guide to: Corporate Tax 2019 15th Edition A practical cross-border insight into corporate tax work Published by Global Legal Group, with contributions from: Blackwood & Stone LP Puri Bracco Lenzi e Associati Boga & Associates Rui Bai Law Firm Braekhus Advokatfirm DA Sameta Carey Schindler Attorneys Eric Silwamba, Jalasi and Linyama Legal Practitioners Sele Frommelt & Partners Attorneys at Law Ltd. Gibson, Dunn & Crutcher LLP Slaughter and May Greenwoods & Herbert Smith Freehills SMPS Legal GSK Stockmann Stavropoulos & Partners Law Office Houthoff T. P. Ostwal & Associates LLP, Chartered Accountants Lenz & Staehelin Tirard, Naudin LEX Law Offices Totalserve Management Limited Maples and Calder Utumi Advogados Marval, O’Farrell & Mairal Vivien Teu & Co LLP Mul & Co Wachtell, Lipton, Rosen & Katz Nagashima Ohno & Tsunematsu Waselius & Wist Nithya Partners WH Partners Noerr LLP Wong & Partners The International Comparative Legal Guide to: Corporate Tax 2019 General Chapters: 1 Fiscal State Aid – Some Limits Emerging at Last? – William Watson, Slaughter and May 1 2 Taxing the Digital Economy – Sandy Bhogal & Panayiota Burquier, Gibson, Dunn & Crutcher LLP 9 Country Question and Answer Chapters: Contributing Editor William Watson, 3 Albania Boga & Associates: Genc Boga & Alketa Uruçi 15 Slaughter and May 4 Argentina Marval, O’Farrell & Mairal: Walter C. 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Ostwal Global Legal Group Ltd. & Siddharth Banwat 112 59 Tanner Street London SE1 3PL, UK 18 Indonesia Mul & Co: Mulyono 120 Tel: +44 20 7367 0720 19 Ireland Maples and Calder: Andrew Quinn & David Burke 128 Fax: +44 20 7407 5255 Email: [email protected] 20 Italy Puri Bracco Lenzi e Associati: Guido Lenzi & Pietro Bracco, Ph.D. 135 URL: www.glgroup.co.uk 21 Japan Nagashima Ohno & Tsunematsu: Shigeki Minami 142 GLG Cover Design 22 Kosovo Boga & Associates: Genc Boga & Alketa Uruçi 151 F&F Studio Design GLG Cover Image Source 23 Liechtenstein Sele Frommelt & Partners Attorneys at Law Ltd.: Heinz Frommelt 156 iStockphoto 24 Luxembourg GSK Stockmann: Mathilde Ostertag & Katarzyna Chmiel 163 Printed by 25 Malaysia Wong & Partners: Yvonne Beh 171 Ashford Colour Press Ltd November 2018 26 Malta WH Partners: Ramona Azzopardi & Sonia Brahmi 177 Copyright © 2018 27 Mexico SMPS Legal: Ana Paula Pardo Lelo de Larrea & Alexis Michel 183 Global Legal Group Ltd. 28 Netherlands Houthoff: Paulus Merks & Wieger Kop 190 All rights reserved No photocopying 29 Nigeria Blackwood & Stone LP: Kelechi Ugbeva 196 ISBN 978-1-912509-43-0 30 Norway Braekhus Advokatfirm DA: Toralv Follestad ISSN 1743-3371 & Charlotte Holmedal Gjelstad 201 Strategic Partners 31 Russia Sameta: Sofia Kriulina 207 32 Sri Lanka Nithya Partners: Naomal Goonewardena & Savini Tissera 213 33 Switzerland Lenz & Staehelin: Pascal Hinny & Jean-Blaise Eckert 219 34 United Kingdom Slaughter and May: Zoe Andrews & William Watson 229 35 USA Wachtell, Lipton, Rosen & Katz: Jodi J. Schwartz & Swift S.O. Edgar 238 36 Zambia Eric Silwamba, Jalasi and Linyama Legal Practitioners: Joseph Alexander Jalasi & Mailesi Undi 247 Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720 Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. WWW.ICLG.COM Chapter 19 Ireland Andrew Quinn Maples and Calder David Burke 1 Tax Treaties and Residence 1.6 What is the test in domestic law for determining the residence of a company? 1.1 How many income tax treaties are currently in force in your jurisdiction? A company is resident in Ireland if it is incorporated in Ireland or, if not Irish-incorporated, is centrally managed and controlled in Ireland. This latter test is based on case law and focuses on board As of September 2018, 74 treaties have been signed, 73 of which control, but is a question of fact based on how decisions of the are in force. company are made in practice. If a company incorporated in Ireland is managed and controlled in a 1.2 Do they generally follow the OECD Model Convention treaty state, it may be regarded as resident in that other state under or another model? the “tie-breaker” clause of Ireland’s double taxation treaty (“DTT”) with that state. Generally speaking, they follow the OECD Model. 1.3 Do treaties have to be incorporated into domestic law 2 Transaction Taxes before they take effect? 2.1 Are there any documentary taxes in your jurisdiction? Yes, but a number of Irish domestic provisions, including certain exemptions from withholding tax, take effect immediately when a Generally a document is chargeable to stamp duty, unless exempt, treaty is signed. where the document is both: ■ listed in Schedule 1 to the Irish Stamp Duties Consolidation 1.4 Do they generally incorporate anti-treaty shopping Act 1999 (the principal head of charge is a transfer of any rules (or “limitation on benefits” articles)? Irish property); and ■ executed in Ireland or, if executed outside Ireland, relates to No, other than in respect of certain treaties such as the treaty with property situated in Ireland or to any matter or thing done or the US. to be done in Ireland. Additionally, the OECD’s Base Erosion and Project Shifting project The transferee is liable to pay stamp duty and a return must be recommended that members include in their double tax treaties a filed and stamp duty paid within 45 days of the execution of the limitation-on-benefits test and/or a principal purpose test (“PPT”) as instrument. a condition for granting treaty relief. This recommendation will be Stamp duty is charged on the higher of the consideration paid for, or implemented by means of a multilateral instrument (“MLI”). The the market value of, the relevant asset at the following rates: MLI was signed by Ireland on 7 June 2017 and Ireland has indicated ■ Shares or marketable securities: 1%. that it will include the PPT in its treaties. Ireland’s double tax treaty ■ Non-residential property: 6%. with another country will be modified by the MLI where both treaty partners have ratified the MLI. ■ Residential property: 1% on consideration up to €1 million and 2% on the excess. There are numerous reliefs and exemptions including: 1.5 Are treaties overridden by any rules of domestic law (whether existing when the treaty takes effect or ■ Group relief on transfers between companies where the introduced subsequently)? transferor and transferee are 90% associated at the time of execution and for two years afterwards. No, Irish double tax treaties prevail over domestic law. As noted ■ Reconstruction relief on a share-for-share exchange or under question 1.3, certain domestic exemptions mirror the treaty share-for-undertaking transaction, subject to meeting certain relief and indeed may be more favourable and apply before a treaty conditions. comes into force. ■ Exemptions for transfers of intellectual property, of non-Irish shares and land, loan capital, aircraft and ships. 128 WWW.ICLG.COM ICLG TO: CORPORATE TAX 2019 © Published and reproduced with kind permission by Global Legal Group Ltd, London Maples and Calder Ireland 2.2 Do you have Value Added Tax (or a similar tax)? If so, 2.7 Are there any other indirect taxes of which we should at what rate or rates? be aware? VAT is a transaction tax based on EU directives as implemented Customs duties are payable on goods imported from outside the EU. into Irish law. It is chargeable on the supply of goods and services Excise duty applies at varying rates to mineral oils, alcohol and in Ireland and on goods imported into Ireland from outside the EU. alcoholic beverages, tobacco products and electricity, and will also Persons in business in Ireland generally charge VAT on their apply to certain premises and activities (e.g. betting and licences for supplies, depending on the nature of the supply. retailing of liquor). The standard VAT rate is 23% but lower rates apply to certain There is an insurance levy on the gross amount received by an Ireland supplies of goods and services, such as 13.5%, e.g. on supplies of insurer in respect of certain insurance premiums. The rate is 3% for land and property, and 0%, e.g. on certain food and drink, books, non-life insurance and 1% for life insurance. There are exceptions and children’s clothing. for re-insurance, voluntary health insurance, marine, aviation and transit insurance, export credit insurance and certain dental insurance contracts.