| Tax Exemption for Start-Up Companies |
 |
 |
 |
| Written by Administrator |
| Monday, 28 September 2009 09:39 |
|
In an attempt to encourage the establishment of new companies a three year remission from taxation from profits and capital gains for companies with a tax liability of less than €40,000 per annum was announced in Budget 2009. The aim is to provide a stimulus for entrepreneurs in a challenging commercial environment. Companies that qualify will be fully exempt from corporation tax on trading profits and chargeable gains on the disposal of assets used for the new trade where the total amount of corporation tax does not exceed €40,000. At the current rate of corporation tax i.e. 12.5% this equates to €320,000 of profits per year. Where corporation tax for the period is between €40,000 and €60,000, marginal relief will apply. No relief is available where corporation tax liability for the period exceeds €60,000. This relief will apply for three years from the commencement of the new trade. Therefore the company could shelter from tax up to €960,000 of trading profits over a three year period. The following conditions apply: - The company must be incorporated on or after 14th October 2008 - The company must commence to trade during 2009 - The trade must be a new trade and must not have been carried on previously by another person in the State. - The tax relief will apply for 3 years from the commencement of the new trade. - The tax relief does not apply to companies that are dealing in land or petroleum and mineral activities. - The tax relief does not apply to professional service companies. - The tax relief for companies operating in the road transport sector is restricted to a total of €100,000 over the 3 year period. If you are considering starting a business and expect to be profitable from an early stage then we would advise speaking with an accountant ot tax consultant to determine whether this makes sense for you. Comments (1)
  written by Adrienne O'Sullivan, January 11, 2010 Write comment
|
| Last Updated on Monday, 28 September 2009 09:47 |
Subscribe to this comment's feed
Show/Hide comments
Although originally set to apply to businesses which commenced trading in 2009 the scheme has now been extended in the 2010 Budget to cover businesses commencing trading during 2010.
Quote from the Budget 2010 website of the Department of Finance: "Extension of the existing scheme providing a three year exemption from tax on the income and gains of new start-up companies to include companies who commence trading in 2010. This measure will cost approximately €15m over a three year period".
Adrienne