Corporation Tax (CT)

Company residency rules

Rules for companies that are incorporated in Ireland

Different residency rules may apply to a company, depending on whether it was incorporated in Ireland before or after 1 January 2015.

A company is deemed to be tax resident here if it was incorporated in Ireland on or after 1 January 2015. This will apply unless it is treated as a tax resident company in another country under a Double Taxation Agreement.

If a company was incorporated before 1 January 2015, there is a transition period up to 31 December 2020. From this date, a company will be deemed to be tax resident unless it is tax resident in another country under a Double Taxation Agreement.

There is an exception to this rule if, after 31 December 2014, a company has both:

• a change of ownership
• and
• a major change in the nature and conduct of the business.

In these circumstances, the company will be tax resident from the date of the change in ownership.

Before these rules were introduced, the central management and control rule was used to decide if a company was resident. A company was regarded as resident if its central management and control was performed in Ireland. This was the case whether the company was incorporated in Ireland or not. This rule will continue to apply, on a transitional basis, to Irish companies that were incorporated before 1 January 2015.

Rules for companies that are not incorporated in Ireland

The central management and control rule applies to foreign incorporated companies. If a company is incorporated in a foreign country and is centrally managed and controlled in Ireland, it is resident in Ireland for tax purposes.

The central management and control test

Revenue will consider the highest level of control to decide where central management and control exists. Certain critical questions are included in this assessment to discover where:

• company policy is decided
• investment decisions are made
• major contracts are defined
• the company’s head office is located
• the majority of directors live.

Cessation of residency

When a company is no longer tax resident its assets will be deemed to be disposed of at market value. The company must pay tax on any capital gains received from the disposal, except where:

• the assets continue to be used in Ireland by a branch or agency of the company
• the company is controlled by residents of a European Union (EU) or tax treaty country.

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