Equipment Leasing In Ireland: New Developments

Until the passing of the Finance Act, 2011, an equipment leasing platform in Ireland generally was established as an Irish resident trading company availing of the 12.5% rate of corporation tax applying to trading profits. This meant that the Irish company was required to carry on a trade in Ireland (thus requiring a certain level of substance and activity) and the capital cost of acquiring the equipment would generally qualify for tax depreciation (known in Ireland as capital allowances). The combination of the 12.5% rate of corporation tax and the generous capital allowances available in respect of the capital cost incurred meant that the Irish company generally suffered a very low effective rate of tax.