Ireland’s favorable business environment and competitive tax system have made it a preferred destination for international businesses seeking to establish their presence in Europe. However, in order to fully benefit from Ireland’s corporate tax advantages, companies must navigate certain regulatory requirements. One such requirement is demonstrating a ‘Real and Continuous Link’ to Ireland, which is crucial for avoiding the non-resident bond. In this article, we’ll explore the concept of a ‘Real and Continuous Link’ and provide guidance on how your Irish company can meet this requirement effectively.
Understanding the ‘Real and Continuous Link’
The ‘Real and Continuous Link’ is a legal concept in Irish tax law that serves to distinguish between companies that are genuinely conducting business activities in Ireland and those that are merely using Ireland as a tax shelter without a substantial presence in the country. This concept is crucial for determining whether a company qualifies for the benefits of Irish tax residency, including a reduced corporate tax rate.
The Irish Revenue Commissioners use various criteria to assess whether a company has a ‘Real and Continuous Link’ to Ireland. These criteria include the location of board meetings, the management of the company’s affairs, the presence of key decision-makers in Ireland, and the level of economic activity conducted within the country.
Tips for Establishing a ‘Real and Continuous Link’
- Maintain a Registered Office in Ireland: One of the first steps to establish a ‘Real and Continuous Link’ is to have a registered office in Ireland. This provides a physical presence and an official address for your company in the country.
- Appoint Irish Resident Directors: Having Irish resident directors who actively participate in the management of the company can strengthen your case for a ‘Real and Continuous Link.’ These directors should be involved in strategic decision-making and be physically present in Ireland for board meetings.
- Conduct Core Business Activities in Ireland: To demonstrate a genuine link, it’s essential to conduct significant business activities within Ireland. This includes having a physical presence such as offices, employees, and customers in the country.
- Maintain Comprehensive Records: Keep detailed records of board meetings, financial transactions, and other business activities conducted in Ireland. This documentation can serve as evidence of your company’s substantial presence in the country.
- Establish Banking Relationships in Ireland: Maintain bank accounts with Irish financial institutions and conduct your financial transactions through these accounts. This further demonstrates a commitment to operating within the Irish business environment.
- Seek Professional Advice: Consult with tax and legal experts in Ireland who are well-versed in the ‘Real and Continuous Link’ requirements. They can help you structure your company’s operations in a way that aligns with Irish tax regulations.
- Stay Informed: Keep up to date with changes in Irish tax laws and regulations, as these may affect your company’s compliance with the ‘Real and Continuous Link’ criteria.
For an Irish company, establishing a ‘Real and Continuous Link’ to Ireland is essential for benefiting from the country’s advantageous tax regime and avoiding the non-resident bond. By maintaining a registered office, appointing Irish resident directors, conducting core business activities within the country, and adhering to other guidelines outlined in this article, you can strengthen your company’s case for a ‘Real and Continuous Link.’ Seeking professional advice and staying informed about regulatory changes will help ensure that your company maintains its tax-resident status in Ireland.
Should your company need to explore its options when it comes to a real and continuous link in the state under Section 140 of the Companies Act, putting an EEA resident director in place or the options available to your company please don’t hesitate to contact us or call the office on 01 442 8230. A member of our expert Company Secretarial department would be happy to assist you.
Capital Gains Tax
Years of Experience
Running a payroll in Ireland involves several steps to ensure compliance with Irish tax laws and regulations. In this blog post, I will provide a general overview of the process for running a payroll in Ireland, including the necessary registration,...
1. Expertise and Insight Financial consultants are experts in their field. They possess the knowledge and experience to analyze your company's financial data, assess your current financial health, and identify opportunities for improvement. They can...
Expertise in Accounting TAS Consulting Limited boasts a team of highly skilled and certified accountants who are well-versed in the nuances of financial accounting. They provide a wide range of services, including: Financial Statement Preparation: TAS...
Repercussions of Missing CRO Deadlines: What Happens When an Annual Return Filing Is Late in Ireland
The Importance of Annual Return Filing Annual return filing is a fundamental requirement for all companies operating in Ireland, whether they are large corporations or small businesses. The annual return provides crucial information about the company's...
Value Added Tax (VAT) is an essential component of running a business in Ireland, and it's crucial to understand the registration process to ensure compliance with tax laws. This article will guide you through the steps of registering for VAT in Ireland...
Streamline Your Finances with Xero Accounting Software in Ireland: TAS Consulting Limited to the Rescue
Xero: The Game-Changer in Irish Accounting Xero is a cloud-based accounting software platform that has gained immense popularity in Ireland and worldwide. Its intuitive interface, robust features, and scalability make it a top choice for businesses of all...
Ireland's taxation system, encompassing both taxes and Value Added Tax (VAT), forms a critical aspect of the country's revenue generation and economic stability. For businesses and individuals alike, understanding and adhering to Ireland's tax regulations...