Corporation Tax Exemption for Start Up Companies

An exemption from Corporation Tax for the first three years of trading applies to certain new start up companies.

Where a company is incorporated after 14 October 2008 and commences to trade up to 31 December 2014 it will be exempt from Corporation Tax and Capital Gains Tax on the disposal of assets used for the purposes of the new trade. The exemption is subject to a threshold, and no relief will be available where profits exceed €60,000.

Corporation tax Liability for the period

Availability of Relief

Less than €40,000

Full exemption

€40,000 to €60,000

Marginal relief

More than €60,000

Fully taxable

 The following conditions apply for companies that commenced to trade during 2009 or 2010:  

  • The company must be incorporated on or after 14th October 2008 
  • 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 three years from the commencement of the new trade 

The following additional conditions apply for companies that have an accounting period commencing in 2011 or later     

  • The tax relief is linked to the amount of employers PRSI that the company has paid. The maximum credit that can be claimed is €5,000 per employee.
  • The maximum amount of corporation tax relief is €40,000 per annum for 3 years.

The relief has been extended to companies that have commenced to trade by 31st December 2014.

 The following companies are excluded from the relief:

  • Companies that are dealing in land or petroleum and mineral activities 
  • Professional service companies 
  • Companies in the fishery and aquaculture sectors
  • Companies involved in the primary production of agricultural products
  • Companies in the coal sector

Contact Mark Butler or Maura Duffy for more information.

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