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Irish tax on foreign based company

  • 16-12-2018 3:15pm
    #1
    theglobe
    Registered Users, Registered Users 2 Posts: 300 ✭✭


    I am an Irish citizen but my company is based only in the United States. I pay taxes there but run the company from Ireland. What taxes, if any, do I need to pay in Ireland?


Comments

  • #2
    Victor
    Registered Users, Registered Users 2 Posts: 78,491 ✭✭✭✭Victor


    Sales / purchases in Ireland, if any - VAT (0-23%, dependent on product), possibly excise, import duties. That you don't trade here puts you in an odd position, which needs particular care. In the USA, you will have to deal with any sales tax, excise or duties.

    Buildings in Ireland - rates (% dependent on council area).

    Company profits - corporation tax (12.5%), can be offset against corporation tax in the USA.

    Dividend withholding tax - on dividends, but this gets off-set against other taxes.

    Income tax, USC, PRSI - on your income.

    There are of courses allowances and credits.

    You need professional tax advice.


  • #3
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,441 ✭✭✭✭Marcusm


    theglobe wrote: »
    I am an Irish citizen but my company is based only in the United States. I pay taxes there but run the company from Ireland. What taxes, if any, do I need to pay in Ireland?

    You need proper advice; on it’s face your company is chargeable to corporation tax in Ireland either through being resident here (if you are sole director make senior level decisions here) or has a taxable branch here. There can be defences depending on the nature of the business but I doubt their availability. Also liable to register as an employer!


  • #4
    Daxve
    Registered Users, Registered Users 2 Posts: 162 ✭✭Daxve


    Per the Double Taxation Agreement with the US

    https://www.revenue.ie/en/tax-professionals/tax-agreements/double-taxation-treaties/u/usa-1997.pdf

    Article 4 Residence

    1a Any person, who under the laws of that state is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature.

    A person includes a company. The company is resident in the US if it’s incorporated there (you haven’t actually stated the place of incorporation) but Revenue also apply the central management and control test to determine the place of management

    The criteria are

    The place where

    company policy is decided
    investment decisions are made
    major contracts are defined
    the company’s head office is located
    the majority of directors live.

    Other criteria can be used and you don’t have to meet every one to be deemed to have a place of management in Ireland.

    If you’re managing the company from Ireland you likely meet the effective place of management as Ireland test and the company is also resident in Ireland.

    Where a person other than an individual is resident in both states then subsection 4 applies a tie breaker and says the competent authorities of both states shall endeavor by mutual agreement to deem for the purposes of the convention the person to be resident in one state only.

    The residence of the company isn’t yours to decide it’s a matter for Revenue and the IRS to determine between them.

    As has also been mentioned even if your company is deemed a US resident you still have a Permanent Establishment (PE) in the Irish state and would be liable to Irish tax on any income attributable to that PE.

    Per article 5

    A PE is a fixed place of business through which the business of the enterprise is wholly or partly carried out and includes:

    a place of management
    an office
    a branch
    a factory
    a workshop

    Best to get professional advice.


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