Thanks to its tax policy, Ireland is counting on a massive boost to its business community, including shipping-related companies, as a result of neighbour UK quitting the European Union
The move will leave Ireland as the only English-speaking country in the EU, as it already is within the[ds_preview] Eurozone. More than 100 companies have made enquires about relocating to the Republic of Ireland following last summer’s Brexit vote, the Irish Development Agency (IDA) has reported, with the vast majority being banks or financial services from the City of London.
Ireland’s biggest advantage is its ultra low Corporation tax rate of 12.5%, which it is firmly committed to keeping, says IDA chief executive Martin Shanahan. »I do not see any circumstances that it will change any time in the near future, or even the long-term future for that matter,« he said recently. He added, Investors placed great store in the fact that Ireland has been unwavering and consistent. They knew exactly what they are getting.
»For the financial services sector it is the fact that they need to have access to the European market and they need a jurisdiction in which they can do that,« Shanahan said. »Ireland is extremely attractive because we are English speaking, have a common law system, there is the close proximity to the UK.«
For shipping companies, unwavering 12.5% corporation tax makes the Irish Tonnage Tax regime highly competitive. Here as with most other EU tonnage tax regimes including the UK (see separate article), standard corporation tax rate is levied on a notional profit figure assigned to companies based on their net tonnage.
Under Irish Tonnage Tax notional taxable profit is calculated on a sliding-scale rate ranging from 1€ per 100 net tons for the first net 1,000tons, to 0.25€ per 100 net tons over 25,000 net tons. Other advantages of the Irish regime include the fact that it is flag blind, and – unlike the UK – ship management companies also qualify, with no obligation to provide training berths.
Ireland also affords a 25% Research & Development tax credit (refundable), as well as a Seafarer Training Grant provided to companies providing training for cadets studying in Ireland.
As a further incentive there is an Irish Maritime Development Office (IMDO) that has been specially created to advise and assist companies interested in setting up operations in Ireland. Its free services stretch arranging familiarisation trips that include access and introductions to key contacts; helping select suitable locations; and advising on tax and grant matters.
IMDO also liaises with the Irish Ministry of Transport on the development and co-ordination of national policy relating to shipping, and operates under the auspices of the Department of Transport.
Already several shipping-related companies have decided to move their headquarters to Ireland to benefit from the favourable conditions, such as marine electronics supplier Transas or Italian shipowner the d’Amico Group.
