New Exemption on Corporate Tax for certain new Start-Ups

 An exemption from Corporation Tax (CT) for the first three years of trading applies to certain new startup companies.

Where a company is incorporated after 14 October 2008 and commences to trade in 2016, 2017 or 2018, it is exempt from CT and Capital Gains Tax (CGT) on the disposal of assets used for the purposes of the new trade. The exemption is subject to a liability threshold, and no relief will be available where profits exceed €480,000.

CORPORATION TAX LIABILITY FOR THE PERIOD                                        AVAILABILITY OF RELIEF
 €40,000                                                                                                                                         Full exemption
€40,000 to €60,000                                                                                                                      Marginal relief
 €60,000                                                                                                                                         Fully taxable

​The relief is restricted to new trades and does not apply where the trade was previously carried on by another person, where the trade, or part of trade was carried on by an associated company.

Any unused relief in the first three years of trading may be carried forward to subsequent periods.

The relief is limited to the amount of employer PRSI that is paid. There is a cap of €5,000 applicable per person, with an overall limit of €40,000.

The relief does not apply to companies carrying on professional services, nor does it apply to companies which carry on a trade of:

• land dealing,
• petroleum and mineral activities,
•  aquaculture or agriculture, 
• coal,
• road freight operations,
•  export related activities,
•  undertakings in difficulty

In addition, in order to comply with EU requirements it should be noted that Revenue may disclose details of relief granted under the scheme.

​This relief is due to end on 31 December 2018 as it will not apply to companies who commence trading in 2019.

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