swedish chamber of commerce tax incentives for business gerry vahey 11 april 2013
TRANSCRIPT
SWEDISH CHAMBER OF COMMERCETAX INCENTIVES FOR BUSINESSGERRY VAHEY11 April 2013
TABLE OF CONTENTS
1. Corporation Tax Rates, Losses, deductions etc
2. Start up Exemption
3. Holding Company – Participation Exemption
4. Research & Development Tax Credit
5. EIIS & Seed Capital Relief
6. Assignment Relief (“SARP”)
7. Foreign Earnings Deduction (“FED”)
8. Other Issues
2
CORPORATION TAX - GENERAL
• 12.5%, 25%
• Tax deduction for most items of expenditure
• Incorporation versus Sole Trade
• Intangible Assets
3
• Overview
• Relief from Corporation Tax
• First 3 years Profits
• Incorporation and Commencement
• Employment Based Relief
START UP EXEMPTION
• The Relief
• Relief of up to €40,000
• Marginal Relief to €60,000
• Trading Profits
• Carry forward of losses
START UP EXEMPTION
HOLDING COMPANY – PARTICIPATION EXEMPTION
6
HoldCo
Trade Co
RESEARCH & DEVELOPMENT TAX CREDIT
• 25% Tax Credit
• Offset against Corporation Tax
• Refunded over 3 years
• Reward key employees
COMPANY TAX CREDIT €60,000
RDTCYear 1Refund
Year 2Refund
Year 3Refund
Year 4Refund
Year 1 20,000 20,000 20,000 -
Year 2 - 20,000 20,000 20,000
Year 3 - - 20,000 20,000
Year 4 - - - 20,000
20,000 40,000 60,000 60,000
DIRECT R&D EXPENDITURE
Direct Staff Costs
Raw Materials
Direct Over-headsComputer Software &
Hardware costs
Sub Contracted R&D Costs
(Rules)
Plant & MachineryBuildings
(Special Improved Rules Apply)
Fixtures & Fittings
Other ?
SOME….QUALIFYING ACTIVITIES
prototyping design trials testing moulding workings drawings failed attempts
recipes blending reaction
extensive testing process &
output performance Stability
control
first batch scale up
production clinical trials
process & output improvements
Algorithm & OS development statistical data management generic software improvements
Qualifying Activities
SOME …. QUALIFYING ACTIVITIES (BROWN COAT?)
Process Improvements : Definable Increases in Output, Volume, Running Time etc
Automation
MONEY BACK FROM REVENUE
• Reliefs
• Employment and Investment Incentive Scheme (EIIS)
• Seed Capital Relief
• Start-up Relief
• How these interact with
• R&D Tax Credit
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
• Benefits
• Cash for Company
• Income Tax Relief for Investor
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
• The Company
• Trading company
• Unquoted
• Residence & Incorporation
• Micro, Small and some Medium Sized Enterprises
• Max Lifetime limit of €10m
• Max Annual limit of €2.5m
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
• The Investor
• Resident in Ireland
• Hold shares for 3 years
• Not connected to company
• Relief of €150,000 in any one year
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
• Tax Relief
• Initially - 30%
• After 3 years - 11%
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
• Practical Issues
• EIIS Investors
• EIIS Funds
• Exit Strategies?
SEED CAPITAL RELIEF
SEED CAPITAL RELIEF
• Key
• Employment in last 6 years?
• Paid PAYE on Employment Income?
• Entitled to Income Tax Refund?!!
SEED CAPITAL RELIEF
• The Relief
• Refund of Income Tax
• Max of €100k per annum
• Previous 6 years
SEED CAPITAL RELIEF
• Conditions
• Investment in Shares
• Qualifying Company
• Creation of Employment
• Qualifying Employment
ASSIGNMENT RELIEF “SARP”
• Inbound employees
• Exempt 30% of income - €75K to €30K
• Relevant Employee
23
FOREIGN EARNINGS DEDUCTION
• Outbound workers
• BRICS + Others
• Max relief is €35K
• Dependent on number of days
24
OTHER ISSUES
• Double taxation network
• Ease of administration
• Expansion abroad
• Remittance Basis
• Revenue Audits
25
mazars.ie
CONTACT
Mazars
Harcourt Centre Block 3, Harcourt Road
Dublin 2, IrelandTel: +353 (01) 4494400Email: [email protected]
Mazars Place, Salthill
Galway, IrelandTel: +353 (091) 583242Email: [email protected]