In the last budget, in an attempt to encourage new companies and provide some stimulus for the economy, the government introduced a scheme exempting certain companies commencing to trade during 2009 from corporation tax for a period of three years.
This scheme has the potential to offer significant tax savings for many companies.
The terms of the scheme allow a full exemption from corporation where the total amount of corporation tax does not exceed €40,000. At the current rate of 12.5% corporation tax, this means that a company can earn profits of up to €320,000 per year without being required to pay corporation tax.
In order to qualify, the company must meet the following criteria:
- the company must have been incorporated on or after 14th October 2008
- the company must commence to trade during 2009
- the trade must be a new trade and must not have been carried on previously by another person in Ireland
- the company's business activity must not be dealin in land or petroleum and
- the company must not be a professional service company
This scheme is subject to EU approval through the granting of a Ministerial Commencement Order.
If you have been thinking of starting of business, doing so before the end of 2009 could offer you significant tax savings.
Fenero provides company incorporation services for €205 plus VAT. If you are interested in forming a company, contact us now on 01-8851735 or enter your details online at Fenero Online Company Formations.