Given that marginal tax rates can be as much as 55% for individuals, compared with 12.5% for trading companies (or 0% for certain start-ups), it’s a worthwhile endeavour to identify the right legal and tax structure for your business. We work with our clients to understand their commercial, personal, financial and regulatory constraints and objectives and then recommend a business and legal structure that is both appropriate and tax-efficient.
We advise our clients on any tax-related changes needed during restructuring, whether for an individual company or when a more complex group of companies is involved. These can include; amending the capital structure, using a holding company, transferring shares, assets or complete businesses to one or more other companies, and issuing shares as required. Our goal is to help the client avoid paying tax unnecessarily while streamlining their corporate structure.
We help clients whose tax position involves at least two jurisdictions (one of which is generally Ireland). These include nationals of one country who work and are taxed in another, or companies based in one country opening a subsidiary in another and trading there. We advise them on their Irish tax obligations and help them to work out their foreign tax obligations, while minimising their overall tax burden.
If you lose your job or you stop being a director, particularly because of ill health, you may be entitled to significant tax-free payments from your company. We work with our clients to review the potential for such payments, calculate the best outcome and get tax approval if needed.
The EIIS, which replaced the Business Expansion Scheme (BES) in 2011, allows most trading companies to raise funds and allows individuals to get tax relief of up to 41% on their investment in the company. Companies may raise up to €10 million under the scheme, while individuals may invest up to €150,000. We work with client companies to establish the appropriate level of funding and the best structure to facilitate raising funds from individual investors.
The CAT rate has risen in recent years from 20% to 33%, while tax-free thresholds and reliefs have reduced significantly. These changes mean that the CAT is becoming a more important and widely applicable tax. We advise our clients on drafting wills, the use of trusts, asset protection, gifts, wealth transfers to the next generation, and all available tax reliefs in this area.
Capital allowances may be available for machinery and plant, industrial buildings or mechanical and electrical installations. We review our clients’ spending in these areas to make sure they are availing of the maximum capital allowance benefits.
Transfer pricing rules provide that certain transactions between associated persons (such as a parent company and a subsidiary) should be conducted on an arm’s length basis and be priced as similar transactions would be between people or companies with no association. We review our clients’ transfer pricing obligations; helping to price connected party transactions for goods and services, and put in place the necessary documentation.
RCT is a far-reaching and complex tax. Non-compliance generally leads to large tax exposures and penalties. Since the start of 2012, RCT administration is done entirely online. We review our clients’ activities, identify their RCT obligations, and advise on the application and administration of this tax.
If our clients are retiring, selling or leaving their business, we review their circumstances and work to minimise the tax arising on the sale of any shares or assets, or on liquidation. We will also assess whether or not retirement relief, business relief, termination payments and capital gains tax (CGT) exemptions apply.
We advise our clients on value-added tax (VAT) issues that arise when buying or selling property, or creating or surrendering leases. We also advise on VAT issues relating to the business supply of goods and services, including cross-border trade and the recovery of VAT incurred in foreign jurisdictions.
We review our clients’ R&D activities to ensure they are maximising the relevant tax credits, working with them to manage the claim process with Revenue. We also identify the appropriate structure to manage the development, holding and exploitation of intellectual property in a tax-efficient way.
We complete vendor, purchaser and lender due diligence tax reports for mergers and acquisitions. Before any merger or acquisition, we review the structure and tax profile of the enterprise. This enables us to recommend an efficient tax structure and to manage tax issues appropriate to the buyer or seller. When it comes to completing the tax process for a particular transaction, we plan the due diligence review process in a structured way. By doing so, we can get or provide the relevant information for the buyer or seller and interact with legal and corporate finance teams as needed.
We work with our clients to identify the best structure for paying international tax, bearing in mind both Irish and foreign taxes and double-tax treaty reliefs that apply.
For Irish taxes, we review the availability of the 0% corporation tax rate for certain start-up companies, the 12.5% corporation tax rate for trading companies, R&D credits, intellectual property reliefs, capital allowances and deductions for interest and funding costs.
We advise our clients on their pay-related social insurance (PRSI) and universal social charge (USC) obligations, including those for employees and directors.
If a company grants shares to directors or employees, it must carefully consider any potential exposure to income tax. We help clients by considering the legal basis on which shares are provided, the timing and allocation of the shareholding, and the nature and extent of rights attaching to shares. We work with our clients to consider the extent of share participation they envisage and assess how share grants could encourage employees to achieve corporate objectives.
Companies, individuals and partnerships who borrow money to fund their business will incur a funding or interest cost on those borrowings. Interest deduction is an important part of an efficient tax structure for trading or investment entities. In recent years, the relevant legislation has been changed to restrict the availability of related tax relief.
We advise our clients on the tax law and rules that apply when putting in place loan agreements, investments and corporate structures.
We identify efficient holding structures for property, including residential and commercial property, investment and development projects, both in Ireland and abroad.