If you have started a new company, you may be able to apply for tax reliefs in Ireland for start-up companies.
The tax reliefs in Ireland are also known as Section 486C tax reliefs of the Republic of Ireland. It reduces your Corporation Tax (CT), for the first five years of trade. This relief is available for profits and chargeable gains on assets that you use in your new trade.
If your CT due in a tax year is less than EUR40,000, you may be eligible for relief. You may be eligible for partial relief if your CT dues are between EUR40,000-EUR60,000. Start-ups also get tax relief depending on how much employer’s Pay Related Social Insurance, (PRSI), you pay. This should not exceed EUR5,000 per employee and EUR40,000 for the entire company.
Your company may be able to transfer any unutilized reliefs from:
- The qualifying trade must have been made within the first five years of trading, or on or after January 1, 2018.
- The qualifying trade must have been initiated before January 1, 2018.
What is the eligibility to apply for corporation tax reliefs in Ireland
- Your company is formed on or after the 14th October 2008.
- Your company was established and started trading between the 1st of January 2009 and 31st December 2021
- Your company does not have to pay more than the Corporation Tax due.
Qualifying trade-in tax reliefs in Ireland
In most cases, a trade of a start-up company established between 1 January 2009 & 31 December 2026 will qualify as a qualifying trade. This excludes a few trades:
- Trades that were previously conducted by someone else, but which have been successfully completed by the company
- Activities that were previously performed as a trade or profession for another person
- Land development
- Exploration and extraction of petroleum and minerals
- Services company activities, as defined by section 441, part 13 of the 1997 taxes consolidation act
- Activities include aquaculture, fishery, and production of agricultural products. 1998/2006
- Activities of an associated company of a new company that forms part of the trade conducted by the associated company
Your company cannot take on activities related to another trade if you have already claimed relief. You will lose your relief if your company transfers a part of your qualifying trades to a related person.
Start-up tax reliefs available in the Republic of Ireland
How much tax reliefs you are entitled to depends on how much employers’ Pay Related Social Insurance, (PRSI), you pay. The total amount you pay to your employer’s PRSI will limit the relief you can claim. You may reduce this amount if your employee’s PRSI exceeds EUR5,000 or EUR40,000. If you pay EUR6,000 employer’s PRSI for one employee, EUR5,000 will be eligible for relief.
Start-ups in the Republic of Ireland can get partial tax relief.
You may be eligible for partial tax reliefs in Ireland (also called marginal relief) if your CT dues are between EUR40,000 and EUR60,000.
Your company may be able to transfer any unutilized relief from:
- If the qualifying trade began on or after January 1, 2018, then it is considered five years of trading.
- Three years are required for trading if the qualifying trade was made before January 2018.
For tax relief for your start-up company, you can use Revenue Online Services (ROS), which is available on your Form CT1 tax returns.