12.5 per cent corporation tax is attractive. It is not yet a company structure.
Whether an Irish company makes sense for you depends on what you do, where you live, who owns it and where it is really run. The tax rate is only the starting point.
If you think like an entrepreneur, you probably knew about the 12.5 per cent before anything else about Ireland. The rate is the reason half of Silicon Valley has a Dublin address, and it turns up as a promise in every other video about moving abroad. This page explains what the number is, who it matters to, and why on this site it deliberately stands without a blueprint.
What the number is
The 12.5 per cent is the Irish corporation tax rate on company profits from active trading. It is real, it has been the backbone of Irish economic policy for decades, and it is one of the reasons Ireland supports such a dense landscape of international companies.
Just as important is what the number is not: it is not a tax rate on you. Your salary, your dividend and your private capital follow other rules, and Irish personal income tax is high, as the tax overview says openly. The 12.5 per cent lives at the level of a company, and between the company and your family account lies exactly the stretch where serious planning can be told apart from advertising.
The second rate nobody mentions
The 12.5 per cent applies to profits from active trading, to trading income. Everything else meets a second rate: 25 per cent on passive income, that is on interest, rents, royalties without active exploitation and income that cannot be attributed to a trade.
This second rate hardly appears in the usual summaries, and it is the reason a company used to manage investments is precisely not part of the 12.5 per cent story in Ireland. The line between active and passive is no formality but a question of fact, and in case of doubt the tax authority decides it.
The two surcharges
This is where the sums for a family company most often tip over. For closely held companies, close companies, Ireland has two surcharges on profits that are not distributed.
The first hits undistributed investment and rental income at 20 per cent (section 440 TCA 1997). The second hits undistributed income from professional and similar services at 15 per cent (section 441 TCA 1997). Both exist expressly to prevent exactly what many people plan: leaving profits in the company to avoid personal income tax.
| Item | Rate | Provision |
|---|---|---|
| Profits from active trading | 12.5 per cent | section 21 TCA 1997 |
| Passive income | 25 per cent | section 21A TCA 1997 |
| Surcharge on undistributed investment and rental income | 20 per cent | section 440 TCA 1997 |
| Surcharge on undistributed service income | 15 per cent | section 441 TCA 1997 |
The surcharges apply only to close companies and only to the undistributed part. Whether and how much they cost in a given case depends on the make-up of the income.
Source: Revenue, Tax and Duty Manual Part 13-02-06 "Surcharge on undistributed income of service companies" (last reviewed November 2024), referring to section 440 TCA 1997; Tax and Duty Manual Part 34-00-01, sections 2.2 and 5; sections 21, 21A and 23A TCA 1997. As of: retrieved 24 August 2026.
For consulting or planning work run through your own company, this means the 12.5 per cent is not the end of the calculation but its beginning.
Where the company is resident
Since 1 January 2015 Ireland has had a clear rule (section 23A TCA 1997): A company incorporated in Ireland is resident in Ireland, unless a double taxation agreement assigns its residence to another state.
The sentence has a second half, and for someone moving to Ireland it is the more important one. An Irish company that is in fact run from a living room in London, Manchester or Edinburgh is resident in the UK under British law: HMRC treats a company incorporated abroad as UK resident wherever its central management and control is exercised in the UK. Ireland and the UK then both claim it, and the UK-Ireland convention no longer settles that conflict by a fixed rule: the two tax authorities try to agree on it, and without agreement the company gets no relief under the convention at all. What comes out is not an Irish company at 12.5 per cent but a company that pays UK corporation tax on all its profits, wherever they arise. What taxes follow for an Irish Limited run by a UK resident is set out in detail on its own page.
| Level | Provision | Rule |
|---|---|---|
| UK law | De Beers (central management and control); HMRC INTM120060 | A company incorporated abroad is UK resident if its central management and control is exercised in the UK. |
| UK law | Corporation Tax Act 2009, section 5(1) | A UK resident company is chargeable to corporation tax on all its profits wherever arising. |
| UK-Ireland convention | Article 4(3) of the 1976 convention, replaced by Article 4(1) of the MLI | For a company resident in both states, the two tax authorities endeavour to settle its residence by mutual agreement; without agreement it gets no relief or exemption under the convention. |
Both legal orders turn on the same fact: where the business decisions are really taken.
Source: HMRC International Manual INTM120060; legislation.gov.uk (Corporation Tax Act 2009, section 5); GOV.UK, synthesised text of the MLI and the 1976 Ireland-UK double taxation convention. As of: retrieved 6 November 2026.
That is why substance is neither a formality nor a letterbox. It is the question whether your company is run where it is registered. For a family that really moves to Ireland it is the easiest substance question of all, because the move makes the answer right anyway.
The director's public office
An Irish peculiarity that rarely appears even in specialist texts, and that regularly surprises entrepreneurs who move over: Under Irish law, the director of a company incorporated in Ireland holds a public office and is taxable in Ireland on the fees and salary from it, whatever his or her own residence and wherever the duties are carried out.
The basis is section 19(2) TCA 1997 and Tipping v Jeancard, 2 ITR 68. In practice: anyone who forms an Irish company and becomes its director before moving to Ireland is liable to Irish tax on the director's pay, even without having spent a single day in the country. Whether a treaty gives relief is then a separate question.
The same holds the other way round: anyone who later leaves Ireland but stays on as director takes this tax liability along.
What it can do for a family
For the families this site is written for, the rate becomes interesting in two situations. First: if you bring your business with you or start trading in Ireland, you can retain profits in an Irish company at 12.5 per cent instead of paying them out to yourself straight away at high personal rates. Second: together with the non-dom position, non-Irish activities raise the question of which entity sits where and what money flows into Ireland at all.
Both are possibilities, not automatic outcomes. Whether they hold up in your case depends on what you do, on questions of substance, on how UK tax law treats the years before you leave, and on details that can differ completely between two families with the same wealth. A company is not a tax rate, and a tax rate is not a plan.
Why there is no blueprint here
At this point other sites usually show you a structure chart with boxes and arrows. There is deliberately none here, for two reasons.
First, we work with our own proven structures for business families moving to Ireland, and their mechanics belong in a personal consultation, not on a marketing page. What circulates publicly as a blueprint is regularly out of date, incomplete or simply wrong, and in tax law half a set of instructions is more dangerous than none.
Second, every box diagram would answer a question nobody has asked yet: yours. The honest order is the other way round: first your activity, your assets and your timetable, then the structure. That is exactly how the consultation works: you describe your situation, and Sebastian tells you whether and how the 12.5 per cent plays a part in your case, and what it costs before it pays.
This page describes the rules for a company owned by someone resident in Ireland. The process, scope and price of a formation are set out alongside: under company formation you will find the three ready packages, the Irish Limited, the Irish holding and the Limited with a UK holding. The network's sister site compares Ireland with other locations: Firmengründung Ausland (in German).
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From 12.5 per cent to a company that actually gets it
Your Irish Limited, formed in Dublin, with registered office, company secretary and ongoing support in English. Fixed price €4,420 for the formation and the first year.