Our consulting service DEinternational is looking forward to advise you on tax issues and problems.
The double taxation agreement states from when a company can have a permanent establishment in Ireland. For a construction company from Germany it is generally 12 months and for UK companies six months. The Irish Double Taxation Agreements with various countries outline the details when a site constitutes a permanent establishment. These can be found under this link.
The standard Irish corporation tax is 12.5%. In addition, there is a taxation rate of 25% form income from investments, for example from rent or interest. For companies that are not registered in Ireland and are also non-tax residents the corporation tax rate of 25% will apply.
- Consultancy on the double taxation agreement and the requirements for a business premises
- Consultancy on the corporation tax rate, start-up exemption, capital allowance, intellectual -property, research and development
- Company formation and registration for corporation tax
- Corporation tax returns filing
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Income tax and personal income tax
Income tax in Ireland
Our consulting service DEinternational offers tax advice on Irish income tax. This includes corporate income tax as well as income tax.
Our corporate tax advisory services include:
- Information on applicable corporate income tax rates (generally 12.5% or 25% for passive income such as rental and interest income)
- Registration for corporation tax and filing of reports
- Advice on permanent establishments within the meaning of the German-Irish double taxation agreement, in particular for construction companies (presumption of permanent establishment after 12 months)
- Tax permanent establishment as compared to "letterbox companies" (25% tax rate also applies to companies registered in Ireland but not resident for tax purposes)
Our income tax advisory services include:
- Information on applicable tax rates (20% for income up to €33,800, 40% for income above €33,800)
- Universal Social Charge rates, PRSI rates (in particular with regard to posting of workers)
- Calculation of credits and exemptions according to double taxation agreements
- Registration for income tax and submission of declarations
- Advice for persons with income in Ireland and Germany according to double taxation income
Relevant Contract Tax (Construction Withholding Tax) in Ireland
We assist companies with the registration for RCT and filing of returns. We also advise about if the services in question are liable to RCT.
Before a subcontractor can be paid the payment must be filed on Revenue’s online system so that the authority can check whether and how much RCT should be paid.
There are three different tax rates, depending on the amount payable to the subcontractor:
- 0% for companies that fulfilled their tax liabilities without any difficulties and on time in the last three years
- 20% for companies with an Irish tax number
- 35% for companies without an Irish tax number and/ or companies that did not meet their tax liabilities
If the payments are filed too late or not at all this may lead to fines up to 35% from the amount payable.
Normally subcontractors that pay the Irish RCT do not need to charge the VAT. In this case the main contractor is responsible for filing VAT returns (“reverse charge”).
Construction Withholding Tax in Germany
There is also a construction withholding in Germany. The rate is 15% and it might apply on payments to subcontractors. It is possible to apply for an exemption from this deduction.
Irish Taxation offers advice on Construction Withholding Taxes in Germany as well as registering for taxes, filing returns and applying for the exemption from the construction withholding tax.
VAT in Ireland
We offer our clients a comprehensive service regarding VAT in Ireland.
The rates are as follows:
- 23% – standard rate
- 13,5% – „reduced rate“, especially for services in the agriculture, cleaning and construction sector and car rentals
- 9% – „second reduced rate“, mainly for the tourism sector and catering industry
- 5,2% – only for the agricultural industry
- 4,8% – „livestock rate“ for farm animals and greyhounds
- 0% – for staple foods and other goods that are deemed as necessary (e.g. children’s clothing)
This enumeration should just give a rough overview. An individual case-by-case examination is always recommended.
Distance Sales to Germany and other EU countries (B2C)
A registration for VAT in Germany needs to be made for Irish companies whose sales of goods to private customers living in Germany exceeds the annual threshold of €100,000. For sales less than €100,000 per year the company has the option to register for VAT in Germany. If the sales go to other EU Member States the border is usually €35,000 per year.
Telecommunications, Broadcasting and Electronic services (B2C)
VAT also needs to be deducted if electronic services are offered to private customers living in Germany or other EU Member States. The rates are based on the ones applying in the respective Member State.
To make this process easier for the suppliers it is possible to use a “Mini One Stop Shop” (MOSS). For this procedure the company needs to register in one Member State (“Member State of Identification”) and then files all returns regarding telecommunications, broadcasting and electronic services in EU countries together with the VAT due.
VAT in Germany
The standard rate for VAT in Germany is 19%. Companies may be liable to register for VAT in Germany or to pay VAT on expenses, depending on the services offered. In the latter case, the company can apply for a refund. You may also be able to claim expenses that you don’t get back in Ireland such as fuel, meals, car rental and hotel accommodation.
Our services for VAT in Germany include registration, filing returns and applying for refunds. Our VAT refund service is offered at comparatively low fees. We charge a basic fee of 150 € and a success fee of 10%. In cases where no refund is obtained, you will not incur any costs.
Worldwide VAT Refund
Even VAT paid in other countries can be refunded with the assistance of Irish Taxation, as we are part of a global network.