Audit and Corporate Compliance
Basis of Assessment
- Corporation Tax is assessed on the profits of a company's accounting period at the relevant rate in force during the accounting period.
- Where the rate of Corporation Tax changes during an accounting period, the profits of that period are apportioned on a time basis and taxed at the appropriate rate for the purpose.
- Capital gains, other than gains from development land, are included in a company's profits for Corporation Tax purposes and are charged to tax under a formula that means in effect that tax is paid at the prevailing capital gains tax rate. As a result of changes introduced in Finance Act 2012 the rate of capital gains is increased from 25% to 30% in respect of disposals made on or after 7th December 2011 so the formula will now mean that tax is paid at this rate.
- Gains by companies from disposals of development land are chargeable to capital gains tax and are not included in profits chargeable to Corporation Tax.
- A company resident in the state is liable to Corporation Tax on its worldwide profits, not just its Irish source profits, whether or not these profits are brought into Ireland is irrelevant for this purpose.The term 'residence' was not, until recently, defined in law. The general rule was that companies, whose 'central management and control' was exercised in the State, were treated as resident here. This rule or test emerged as a result of judicial decisions set down in case law.
- Factors to be taken into account in establishing where the company's central management and control lie include, for example, where the important questions of company policy are determined, where the majority of directors reside, where the negotiation of major contracts is undertaken and where the company's head office
is located - Information correct at time of publication, please see budget section for any changes to the above information or contact us, thank you
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