Corporation Tax
The Corporation Tax Rate in Ireland Explained
TL;DR
Ireland's corporation tax rate is 12.5% on trading income and 25% on passive income such as rent and investments. A 15% rate applies to large groups with turnover above €750 million. Most Irish SMEs pay 12.5%. The CT1 is due nine months after the year end.
What is the corporation tax rate in Ireland?
The headline trading rate is 12.5%, one of the lowest in the developed world and a cornerstone of Irish enterprise policy. Passive or non-trading income, such as rental and investment income, is taxed at 25%. Source: revenue.ie.
The 15% rate for large groups
Since 2024, Ireland applies a minimum effective rate of 15% to very large groups, those with annual consolidated turnover above €750 million, under the OECD Pillar Two agreement.
For the overwhelming majority of Irish companies, including almost every SME in Kildare, this does not apply. They continue to pay 12.5% on their trading profits.
Trading versus non-trading income
The distinction matters because it doubles the rate. Trading income is profit from an active business. Non-trading income includes rent, deposit interest, and dividends from certain investments, taxed at 25%.
Getting the classification right, and structuring the company well, can make a real difference to the bill. This is one of the areas where advice pays for itself.
When is the corporation tax return due?
A company files its CT1 within nine months of its accounting year end, by the 23rd of that month when filing on ROS. A company with a 31 December year end files by 23 September the following year.
Preliminary tax is due earlier, so both dates need to be managed. Late filing brings a surcharge and can restrict valuable loss and group relief.
Reliefs that reduce the bill
Beyond the low rate, several reliefs can cut what a company pays:
- The Research and Development tax credit, worth 30% of qualifying spend
- The three-year start-up relief for new trading companies
- Loss relief, carrying losses back, forward, or against group profits
- Capital allowances on plant, machinery, and equipment
Would you rather we just handled it?
Our corporation tax service, on a fixed fee.
Corporation Tax
Frequently asked questions
What is the corporation tax rate in Ireland?
Trading income is taxed at 12.5% and passive income at 25%. A 15% minimum rate applies to groups with turnover above €750 million under OECD Pillar Two. Most Irish SMEs pay 12.5%. Source: revenue.ie.
Why is Ireland's corporation tax rate so low?
The 12.5% trading rate has been central to Ireland's strategy of attracting investment and supporting enterprise since the late 1990s. It applies to active trading profits, while passive income is taxed at the higher 25% rate.
When does a company pay corporation tax?
Preliminary tax is paid during the accounting year, and the balance with the CT1 nine months after the year end. We map both dates for every company client so there are no surprises or interest charges.
What is the R&D tax credit?
It is a 30% credit on qualifying research and development spending, on top of the normal deduction, and it is not limited to tech firms. Manufacturing, engineering, and food businesses often qualify if their work meets Revenue's science test.
Does my small company pay 12.5% or 15%?
Almost certainly 12.5%. The 15% rate only applies to very large multinational groups with turnover above €750 million. Standard Irish SMEs pay 12.5% on their trading profits.