Holding Companies In Ireland - August 2016

Ireland has become a destination of choice for holding companies due to its capital gains participation exemption, generous foreign tax credit system, membership of the EU, ever expanding double tax treaty ("DTT") network (72 signed, with 70 in effect), lack of controlled foreign companies legislation, thin capitalisation rules and the general ability to pay dividends free of withholding tax. The ability of US companies migrating to Ireland to continue to use US generally accepted accounting practice ("GAAP"), the broadening of the application of the 12.5% rate to foreign dividends received from companies based in non EU/DTT countries and the simplification of the administrative requirements which must be satisfied in order for an Irish company to pay a dividend to a non-resident company free of withholding tax can be seen as continuing evidence of the Irish Government's commitment to attracting holding companies to Ireland.