Likely developments concerning non-resident companies

In Ireland, all of the worldwide profits of resident companies are charged to corporation tax. Non resident companies, on the other hand, pay tax only on profits derived from any trade carried on through a branch or agency of the company in Ireland. There is a growing perception that some non-resident companies are being used to facilitate tax evasion and/or money laundering of profits derived from activities outside Ireland. Furthermore, corporation tax legislation does not set out how the residence of a company is to be determined - the rules relating to residence have evolved though caselaw and are not always clear.

However, non-resident companies are currently under scrutiny and legislation in this area is likely to be introduced before the end of this year or early next year. At present it is unclear what exactly will be contained in such legislation but it is anticipated that the Irish registered non-resident company issue will be tackled on three fronts as follows:-