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The
development of the European single market
during the 1980s and 1990s, together with a consistently pro-business
attitude on the part of the Irish Government has seen the emergence of
Ireland as one of the fastest-growing European states, and the
establishment of the International Financial Services Centre in Dublin,
along with the Shannon Airport tax-free area, has led to the
development of a substantial offshore business sector, made more or
less redundant in 2003 by Ireland's adoption of a universal 12.5%
corporate tax rate.
According
to the Finance Dublin Yearbook 2008, total employment in the three core
sectors of banking, funds and insurance stood at more than 25,000 at
end December 2007, up by 31% from 19,095 on the same date two years
earlier.
Ireland
Corporate Financial Sector
The 'offshore' environment provided by the International Financial
Services Centre (IFSC) in Dublin is attractive to multinationals
looking to locate treasury management and other corporate financial
functions in a fiscally-flexible but sophisticated environment, and
many such operations have based themselves there.
Application
for a certificate entitling a company to favourable tax treatment is
made to the Industrial Development Agency (IDA) and the certificate is
issued by the Minister of Finance.
Among
the stated activities which the IFSC was set up to encourage and
accommodate are a number of corporate functions, including the
following:
- the
provision of foreign currency services for non-residents;
- the
carrying on of financial services for non-residents including global
money management, dealing and trading in securities denominated in
foreign currencies;
- the
provision for non-residents of services of or facilities for
processing, control, accountancy, communication, clearing, settlement
or information storage in relation to financial activities; and
- the
development or supply of software for use in the provision of services
or facilities mentioned in the last item.
Since
2003, companies established in the IFSC are supervised by the Irish
Financial Services Authority.
It is not necessary to establish a separate subsidiary in order to
carry out corporate financial functions in the IFSC; there are agency
companies and 'shared service centres' which provide certificated
services to overseas client corporations for a number of the more usual
corporate functions.
Ireland
is a convenient location in which to base companies for the collection
of royalties or other payments resulting from the exploitation of
intellectual property rights.
The
activities eligible for Royalty treatment are: Activities relating
to the acquisition, disposal, license, sub-license and exploitation
generally of intellectual property rights.
Acquisition
by the Irish company of the rights in the first place can usually be
carried out without a stamp duty or transfer charge; and there are no
thin capitalisation rules, so that capital duties will be minimal.
Ireland's
extensive network of Double Tax Treaties will ensure that incoming
revenues are normally free of withholding taxes. In some cases, the tax
treaty might have excluded payments destined for companies which don't
pay 'normal' taxes; this problem has perhaps disappeared now that the
12.5% rate is in force, because it is the EU-accepted 'normal' rate.
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