Choose Ireland. The EU Gateway. #chooseireland

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1 Choose The EU Gateway #chooseireland

2 Choose The EU Gateway Cliffs of Moher

3 WELCOME TO IRELAND... is a great place for business and a great place to live. Whether you are a dynamic start-up seeking guaranteed access to a European market of 500 million people or an established business looking to meet high performance objectives, delivers. However, don t just take our word for it the list of successful companies that have chosen proves that smart decision makers value our probusiness policies, exceptional people and reputation as a highly attractive place to work and live. We re also famous for our warm welcome and can do attitude, so please get in touch and we ll make sure you get the most out of your decision to choose. Shaun Murphy Managing Partner, KPMG in is the location of choice for successful businesses. A winning combination of talented people, attractive business taxes, commitment to the EU and an exceptional track record sets apart. We re home to entrepreneurs, innovators and business leaders in every sector. They choose for many different reasons but they each have one thing in common a desire to succeed in a business friendly European gateway that s great for business and great for living. We look forward to working with you and telling you about how - if you choose - our KPMG teams can help your business succeed. Anna Scally Partner, International Tax Head of Technology and Media KPMG in 1

4 IRELAND DELIVERS... Guaranteed access to an EU market of 500 million people A proven pro-business environment A transparent, consistent and certain tax environment A highly competitive Corporation Tax rate of 12.5% An English speaking, committed member of the EU and Eurozone A stable political environment and legal system A thriving R&D environment and a strong national research ecosystem A track record of delivering for international investors - one of the best countries in the world for doing business. is the data capital of Europe ranks 6th in the world for competitiveness Forbes Google IMD World Competitiveness Yearbook 2017 One of the top 10 most innovative countries in the world Global Innovation Index No.1 destination in the world for inward investment by quality and value of investment project. IBM Global Location Trends Report

5 THE CHOICE OF WINNERS is the location of choice for: 9 of the Top 10 global ICT corporations Choose The EU Gateway 10 of the Top 10 Born on the Internet companies 8 of the Top 10 global pharmaceutical corporations 13 of the Top 15 global medical technology companies 15 out of 25 of the world s leading Financial Services firms 8 of the top 10 aircraft lessors is the largest exporter of software in the world Source: IDA River Liffey 3

6 A HIGHLY ATTRACTIVE CORPORATE TAX REGIME Tax Certainty has consistent, transparent, long term tax policies. 12.5% Corporation Tax Rate The lowest rate in Western Europe applicable on trading income of Irish resident companies and Irish branches of foreign companies. Excellent Tax Treaty Network 72 tax treaties including US, UK, Australia, China, Canada, Japan and Russia. Facilitates reduction in foreign taxes and withholding taxes on cross border payments. R&D Tax Credit 25% Tax credit available on qualifying R&D spend - includes staff salaries and related costs and other direct R&D costs. The credit is additional to the 12.5% deduction available for R&D spend. The credit reduces corporation tax or is refundable over 3 years where the company is loss making. Knowledge Development Box A 6.25% rate may apply if undertaking R&D in and developing patents or similar assets or copyrighted software. IP Allowances Tax depreciation allowances are available on the acquisition of a wide range of intangible assets including patents, software and registered designs. Start-up Relief There is a 3 year exemption for new businesses where profits are less than 320k, with marginal relief where profits are below 480k. 25% Tax Rate Applies to passive and non-trading income. The benefit can be taken above the line i.e. before tax. Further credits may be available on buildings used for R&D. 4

7 Choose The EU Gateway TAX Corporation tax rate of 12.5% and a tax treaty network with 72 countries IDA IRELAND Grand Canal Dock 5

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9 SUPPORTING A WINNING ENVIRONMENT FOR INNOVATION Allowances for acquiring IP R&D Tax Credit R&D Grant Aid 12.5% Tax Rate Knowledge Development Box Giant s Causway 7

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11 LIVING & WORKING IN IRELAND is a fully committed member of the European Union According to the Economist Intelligence Unit s where-to-be-born index, scores ahead of the US, Germany, France and the United Kingdom Expats are also attracted by a beautiful unspoilt environment, vibrant social and cultural scene and ease of access to other countries is one of very few countries with the ability to pre-clear US customs and immigration at the point of departure to the US Visa & Permits For non EEA nationals, and depending on personal circumstances, entry visas and employment permits may be required Start-Up Entrepreneur Programme: This enables non EEA nationals with an innovative business idea to secure residency in for the purposes of developing their business Initial funding of 50,000 is required and 30,000 per additional principal involved in the business Employment Permits: Non EEA nationals (with a number of exceptions), must have employment permits in order to take up employment in. There are a number of different permits depending on personal circumstances and these include: Critical skills permit Inter-company transfer General employment permit Contract service provider Investor Programme: This is available to non EEA nationals and their families who commit to an approved investment in. The programme is designed to facilitate participants in establishing a permanent relationship with. IRELAND takes world top 10 spot as must visit region for 2017 LONELY PLANET 9

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13 OUR SKILLED WORKFORCE The Irish workforce is highly skilled and adaptable. 30% of students are currently enrolled in science and engineering courses, and another 20% are currently enrolled in social sciences, including business and law. Attainment in higher education is high among year olds in at 52%, which is 10% above the OECD average. Furthermore, is part of the EU open labour market thus ensuring that your Irish based business can benefit from a wide pool of European talent. also ranks number 1 in the IMD Competitiveness Yearbook 2017, for labour productivity, flexibility and adaptability of our people when faced with new challenges, attracting and retaining talent, and global attitude. IRELAND has the youngest population in Europe with 33.3% under 25 years of age IDA IRELAND is also increasingly multilingual, with a wide range of skilled people able to converse fluently in languages, in addition to English. Each year attracts a significant influx of foreign workers eager to work in a dynamic and enjoyable environment with a pro-european and diverse outlook. EDUCATION has one of the highest % population of graduates in science, maths and computing in the EU. IMD WORLD COMPETITIVENESS YEARBOOK

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15 PERSONAL TAXES Employee income tax and social security is accounted for through the payroll withholding tax system. This is known as the PAYE system. The Irish tax year is aligned with the calendar year. The rates of personal tax and social security for an employee in for 2018 are set out below: Tax/Levies Rate Income tax 20% up to 34,550* 40% thereafter Social Security Employee: 4% on total earnings Employer: 10.85% on total earnings Universal 0 12,012: 0.5% Social Charge 12,013 19,372: 2% (USC)** 19,373-70,044: 4.75% 70,045 upwards: 8%*** Capital gains tax Gift/ inheritance tax 33% Entrepreneur s Relief: 10% on gains up to 1 million (after an annual exemption of 1,270) 33% (subject to certain exempt thresholds) * The 20% tax band is increased depending on marital status. ** Individuals with income lower than 13,000 are exempt from USC. *** 11% > 100,000 for self employed. Various tax credits and reliefs are also available depending on personal circumstances. Companies are required to operate a payroll withholding tax system (PAYE) in respect of cash payments and benefits in kind, e.g. medical insurance and company cars provided to employees. Certain equity based compensation is also processed through the PAYE system. bonus, stock-based-compensation (Stock options, RSU s, ESOP), if appropriate and other benefits. Reliefs and Incentives There are a number of reliefs and incentives which can reduce the personal income tax burden. These include: Entrepreneurs Relief First 1m of capital gains can avail of a reduced 10% rate of CGT. This requires the entrepreneur to own at least 15% of the equity of the company and have been involved on a full time basis for 3 years. Employment and Inventive Investment (EII) Individuals can secure personal income tax relief on investments of up to 150,000 per annum in qualifying companies. Tax relief equal to 40% of the investment is available, 30% upfront and the remaining 10% after year 3. Special Assignee Relief Programme (SARP) Tax relief may be available to assignees transferred to. SARP operates by reducing taxable employment income over a threshold of 75,000 by 30%. Where employees are required to perform duties outside of, the relief will still apply. The SARP relief is available for a maximum of 5 consecutive tax years. Employees who qualify for the regime can also recover the cost of one return trip for their family to their home country from their employer tax-free and can also have school fees (of up to 5,000 for each child) paid by the employer tax-free. A typical compensation package might include: salary, 13

16 Choose The EU Gateway Inch Beach 14

17 PERSONAL TAXEScontinued Foreign Earnings Deduction A Foreign Earnings Deduction may be available for employees who are required to travel to work in emerging markets, i.e. Brazil, Russia, India, China and South Africa, along with a growing number of other African, Middle Eastern and Asian countries. The relief provides a tax refund for the relevant employee where they spend 30 full days working in the relevant countries in a continuous 12 month period and meet certain other conditions. The maximum annual deduction for a relevant employee from taxable income is 35,000. Key Employee Engagement Program ( KEEP ) has recently announced the introduction of a new share option plan designed to support start-ups and SME s in attracting and retaining key talent in certain sectors. This scheme is due to take effect for share options granted from 1 January Each individual who qualifies for the scheme can be granted options with a value of up to 250,000 over a three year period (certain other limitations may apply). The effect of this incentive will be that qualifying options will be taxed at the CGT rate, currently 33%, rather than being subject to income tax at rates up to 52%. Tax efficient income and benefits There are a number of other tax relieving provisions available to employees coming to work in, including the following: Relocation expenses such as shipping, storage costs and costs associated with the purchase of a new home (e.g. stamp duty, solicitors fees etc,) can be reimbursed tax free; Accommodation and subsistence costs for the first 12 months of an assignment that is expected to last less than 24 months can be paid or reimbursed tax free; Employer contributions to Revenue approved occupational pension schemes. This exemption can be extended to foreign employer pension schemes in certain circumstances; Employee contributions to Revenue approved occupational pension schemes are deductible for income tax purposes, subject to certain income and age related limits. There is no deduction for PRSI and the Universal Social Charge; It is possible to obtain Revenue approval in respect of certain share schemes, e.g. Approved Profit Sharing Schemes and SAYE Share Option Schemes which can result in tax savings for employees. Remittance Basis Non-Irish domiciled individuals who are resident in are taxable in on Irish source income. Foreign income is only taxable to the extent it is remitted to. 15

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19 SETTING UP YOUR BUSINESS Company Set Up Before you start doing business in, you need to decide if you are going to operate through a branch or company. Most fast growing businesses choose to operate through a company. Irish companies are registered with the Companies Registration Office (CRO), and can be formed having public or private status, and with limited or unlimited liability. A company must have at least one shareholder, which may be an individual or a corporate entity, along with a minimum of two directors in most cases, or one director and secretary in certain cases. At least one of the directors must be resident in the EEA, except where there is a bond in place to the value of 25,395. The incorporation of a company can be completed in a number of ways, with the most efficient being online, using a specific application process. Under this online scheme, where standard constitutional documents are used, the CRO guarantees to issue a Certificate of Incorporation within 5 working days. State Support IDA provides advice, assistance, grant aid and incentives to international companies coming to. A wide range of supports are available from capital, employment and R&D grants, to support recruiting talent and finding office space. For international companies coming to, IDA will be the principal body responsible for providing assistance. Further information is available on For entrepreneurs looking to come to to start their business, assistance is provided by Enterprise ( Supports are available through the Competitive Start Fund (CSF) and High Potential Start-up (HPSU) funding, mentor programmes and workshops. In addition, Enterprise has a 10m fund to attract entrepreneurs to relocate to and establish ambitious start-ups focused on international markets. Financing Aside from equity and bank financing, has a vibrant angel and Venture Capital (VC) environment. Levels of angel and VC funding have increased significantly in recent years, particularly in financing and developing high potential innovative companies. The Halo Business Angel Network (HBAN and the Irish Venture Capital Association (IVCA are important representative bodies of such angel and VC funding in. 50% of the Top 10 Worlds most innovative companies choose FORBES 17

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21 HOW KPMG CAN HELP We understand the pressures faced by businesses of every type and size when locating to a new jurisdiction. We re the adviser of choice for a wide range of start-ups and established business who choose as their EU Gateway. Our approach is based on simplicity and total commitment and includes support and advice on: Company set-up and tax registration Fundraising Corporate and operating structures Maximising group tax benefits and minimising group tax costs Shareholder and employee tax matters Intellectual Property planning Expat tax matters R&D tax credits Routine compliance matters (legal & tax) VAT and customs duty Outsource accounting Accounting advice and assistance Statutory & US GAAP Audit What s more, we can draw on the experience of our colleagues globally. For further information, please contact one of our team or visit 19

22 YOUR KPMG IRELAND CONTACTS ANNA SCALLY Partner, International Tax Head of Technology and Media & Fintech Lead KPMG in Tel: anna.scally@kpmg.ie EOIN CASEY Associate Director, International Tax KPMG in Tel: eoin.casey@kpmg.ie ORLAITH DE VALERA Associate Director, International Tax KPMG in Tel: orlaith.devalera@kpmg.ie AMY O TOOLE Manager, International Tax KPMG in Tel: amy.otoole@kpmg.ie NIALL FLOOD Director, Corporate Finance KPMG in Tel: niall.flood@kpmg.ie 20

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24 kpmg.ie 2017 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG name and logo are registered trademarks of KPMG International Cooperative ( KPMG International ), a Swiss entity. If you ve received this publication directly from KPMG, it is because we hold your name and company details for the purpose of keeping you informed on a range of business issues and the services we provide. If you would like us to delete this information from our records and would prefer not to receive any further updates from us please contact us at (01) or sarah.higgins@kpmg.ie. Produced by: KPMG s Creative Services. Publication Date: October (3223)