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How to Reduce Your Company’s Tax Obligation

  • Protecting your company’s assets is easier when you’re completely incorporated. You can, for example, reduce your tax liability and save money each year. This also has a number of tax benefits, such as fewer tax audits and more tax deductions.

Contact our Customer Services Team if you need assistance understanding your tax bill and saving money. We can discuss our accountancy services for Irish startups and small enterprises with you.

We’ll go over several examples below, but you should consult an accountant because each circumstance is unique and not all tax credits will apply.

Tax-obligations

    Claiming research tax credits in Ireland

    Research and development is eligible for a 30% tax credit (R&D)

    Limited Companies in Ireland are eligible for the R&D tax credit. It is a value-based incentive that encourages enterprises in the European Economic Area to invest in R&D. (EEA).

    Sole Traders and Directors are eligible for tax credits.

    A €1,500 Earned Income Tax Credit is available to self-employed/sole traders and proprietary directors.

    Sole traders can claim this tax credit in addition to the employee tax credit, but the total amount cannot exceed the maximum employee tax credit of €1,650..

    Both the earned income tax credit and the employee tax credit are available to sole traders who establish a firm while working full-time. The total sum cannot, however, exceed the maximum employee tax credit of €1,650.

    The employee tax credit is not available to Proprietary Directors, their spouses, or civil partners who receive income directly related to their directorship.

    Non-proprietary Directors, on the other hand, are eligible for the employee tax credit.

    Investing in your pension to lower your tax bill

    Pension payments are tax deductible because the government provides large tax benefits to encourage company directors to save for their retirement. When you retire, your retirement strategy can ensure that you get the most money out of the organisation.

    It’s calculated at the same rate as your personal income tax. In other words, if you pay the higher rate of income tax (40 percent), you will get a 40% tax break on your pension. Similarly, if your tax rate is lower (20%), you will receive tax relief at that rate.

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