Choose Ireland | The EU Gateway - KPMG · 2020-06-16 · THE CHOICE OF WINNERS 3 Ireland is the location of choice for: 9 of the Top 10 global ICT corporations 10 of the Top 10 ‘Born

Choose IrelandThe EU Gateway

#chooseireland


Cliffs of Moher

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, Ireland delivers.

However, don’t just take our word for it – the list of successful companies that have chosen Ireland proves that smart decision makers value our pro-business 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 Ireland.

Ireland 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 Ireland apart.

We’re home to entrepreneurs, innovators and business leaders in every sector. They choose Ireland 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 Ireland - our KPMG teams can help your business succeed.

1

Shaun Murphy Managing Partner, KPMG in Ireland

Anna Scally Partner, International Tax Head of Technology and Media KPMG in Ireland

WELCOME TO IRELAND...

IRELAND DELIVERS...

2

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

Ireland - one of the best countries in the world for doing business.

Ireland ranks 6th in the world for competitiveness

Ireland is the data capital of Europe

IMD World Competitiveness Yearbook 2017GoogleForbes

IBM Global Location Trends Report 20162016 Global Innovation Index

One of the top 10 most innovative countries in the world.

No.1 destination in the world for inward investment by quality and value of investment project.

THE CHOICE OF WINNERS

3

Ireland is the location of choice for:

9 of the Top 10 global ICT corporations

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

Ireland is the largest exporter of software in the world Source: IDA

River Liffey


A HIGHLY ATTRACTIVE CORPORATE TAX REGIME

4

Knowledge Development BoxA 6.25% rate may apply if undertaking R&D in Ireland and developing patents or similar assets or copyrighted software.

IP AllowancesTax depreciation allowances are available on the acquisition of a wide range of intangible assets including patents, software and registered designs.

Start-up ReliefThere 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.

Tax CertaintyIreland has consistent, transparent, long term tax policies.

12.5% Corporation Tax RateThe lowest rate in Western Europe – applicable on trading income of Irish resident companies and Irish branches of foreign companies.

Excellent Tax Treaty Network72 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 Credit25% 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.

The benefit can be taken ‘above the line’ i.e. before tax. Further credits may be available on buildings used for R&D.

5

Grand Canal Dock


Corporation tax rate of 12.5% and a tax treaty network with 72 countriesIDA IRELAND

TAX

6


7

Giant’s CauswayGiant’s Causway

12.5% Tax Rate

R&D Tax Credit

R&D Grant Aid

Knowledge Development Box

Allowances for acquiring IP

SUPPORTING A WINNING ENVIRONMENT FOR INNOVATION

8


Ireland is a fully committed member of the European Union

According to the Economist Intelligence Unit’s ‘where-to-be-born’ index, Ireland 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

Ireland 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 Ireland 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 Ireland. 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 Ireland. The programme is designed to facilitate participants in establishing a permanent relationship with Ireland.

LIVING & WORKING IN IRELAND

9

takes world

top 10 spot as

“must visit” region

for 2017

LONELY PLANET

IRELAND

10


OUR SKILLED WORKFORCE

11

Ireland has one of the highest % population of

graduates in science, maths and computing in the EU. IMD WORLD COMPETITIVENESS

YEARBOOK 2017

EDUCATION

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 25-34 year olds in Ireland at 52%, which is 10% above the OECD average.

Furthermore, Ireland is part of the EU open labour market thus ensuring that your Irish based business can benefit from a wide pool of European talent.

Ireland 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 is also increasingly multilingual, with a wide range of skilled people able to converse fluently in languages, in addition to English.

Each year Ireland attracts a significant influx of foreign workers eager to work in a dynamic and enjoyable environment with a pro-European and diverse outlook.

has the youngest population in Europe with 33.3% under 25 years of age

IDA IRELAND

IRELAND

12

O’Connell Street


PERSONAL TAXESEmployee 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 Ireland for 2018 are set out below:

Tax/Levies RateIncome tax 20% up to €34,550*

40% thereafterSocial Security Employee: 4% on total earnings

Employer: 10.85% on total earningsUniversal Social Charge (USC)**

€0 – €12,012: 0.5% €12,013 – €19,372: 2% €19,373 - €70,044: 4.75% €70,045 upwards: 8%***

Capital gains tax

33% Entrepreneur’s Relief: 10% on gains up to €1 million (after an annual exemption of €1,270)

Gift/ inheritance tax

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.

A typical compensation package might include: salary,

bonus, stock-based-compensation (Stock options, RSU’s, ESOP), if appropriate and other benefits.

Reliefs and IncentivesThere are a number of reliefs and incentives which can reduce the personal income tax burden. These include:

Entrepreneurs ReliefFirst €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 Ireland. SARP operates by reducing taxable employment income over a threshold of €75,000 by 30%.

Where employees are required to perform duties outside of Ireland, 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.

13

14

Inch Beach


PERSONAL TAXES continued

Foreign Earnings DeductionA 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’)Ireland has recently announced the introduction of anew share option plan designed to support start-upsand SME’s in attracting and retaining key talent incertain sectors. This scheme is due to take effect forshare options granted from 1 January 2018.

Each individual who qualifies for the scheme can begranted options with a value of up to €250,000 overa three year period (certain other limitations mayapply).

The effect of this incentive will be that qualifyingoptions will be taxed at the CGT rate, currently 33%,rather than being subject to income tax at rates upto 52%.

Remittance BasisNon-Irish domiciled individuals who are resident in Ireland are taxable in Ireland on Irish source income. Foreign income is only taxable to the extent it is remitted to Ireland.

Tax efficient income and benefitsThere are a number of other tax relieving provisionsavailable to employees coming to work in Ireland,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.

15

16


For entrepreneurs looking to come to Ireland to start their business, assistance is provided by Enterprise Ireland (www.entreprise-ireland.com). Supports are available through the Competitive Start Fund (CSF) and High Potential Start-up (HPSU) funding, mentor programmes and workshops. In addition, Enterprise Ireland has a €10m fund to attract entrepreneurs to relocate to Ireland and establish ambitious start-ups focused on international markets.

FinancingAside from equity and bank financing, Ireland 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 – www.hban.org) and the Irish Venture Capital Association (IVCA – www.ivca.ie) are important representative bodies of such angel and VC funding in Ireland.

SETTING UP YOUR BUSINESSCompany Set UpBefore you start doing business in Ireland, 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 SupportIDA Ireland provides advice, assistance, grant aid and incentives to international companies coming to Ireland. 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 Ireland, IDA Ireland will be the principal body responsible for providing assistance.

Further information is available on www.idaireland.com

17

of the Top 10 “Worlds

most innovative

companies” choose

Ireland

FORBES

50%

18


Dublin City

HOW KPMG CAN HELPWe 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 Ireland 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 www.kpmg.ie

19

Partner, International Tax Head of Technology and Media & Fintech Lead

KPMG in Ireland

Tel: +353 1 410 1240 Email: [email protected]

Associate Director, International Tax KPMG in Ireland


Associate Director, International Tax

KPMG in Ireland


Director, Corporate Finance

KPMG in Ireland


Manager, International Tax KPMG in Ireland


YOUR KPMG IRELAND CONTACTSANNA SCALLY

EOIN CASEY

ORLAITH DE VALERA

NIALL FLOOD

AMY O’TOOLE

20

Dollymount Beach


21

© 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 Ireland.

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) 410 2665 or e-mail [email protected]. Produced by: KPMG’s Creative Services. Publication Date: October 2017. (3223)

kpmg.ie

Documents

Choose Ireland | The EU Gateway - KPMG · 2020-06-16 · THE CHOICE OF WINNERS 3 Ireland is the location of choice for: 9 of the Top 10 global ICT corporations 10 of the Top 10 ‘Born