Ireland is the European headquarters for many of the world’s leading technology companies.
This is due amongst other things to a low corporation tax rate of 12.5% which applies to all corporate trading profits, a competitive headquarter and holding company regime, including the availability of an interest deduction on funds borrowed to acquire shares in trading subsidiaries or to make loans to such subsidiaries, participation exemption from capital gains tax on certain disposals by resident companies of shares in direct and indirect foreign and in country subsidiaries, favourable treatment of divided income received from foreign subsidiaries in the EEA or tax treaty countries, and the availability of onshore pooling as a means of dealing with the situation where the foreign tax on dividends received, exceeds the Irish tax.
Additionally recent changes allow for unilateral credit relief for foreign tax suffered by a company that has a branch or agency in a country with which Ireland does not have a tax treaty. These changes also permit subject to conditions, pooling in the case of foreign branch profits.
There is no controlled foreign companies (CFC) legislation affecting foreign subsidiaries of Irish companies, although there are specific rules on the transfer of assets abroad.
Arising from the European Court decision in Cadbury Schweppes, a member state must not now apply a CFC measure to a resident company ( in respect of the activities of its foreign controlled subsidiary ) where it is proven on the basis of objective factors, that despite the existence of tax motives, that the controlled foreign company is actually established in a host member state and is carrying on genuine economic activities there. Please contact Paul Foley if you require more information on this.
Ireland has no thin capitalisation rules.
Ireland additionally has a research and development tax credit scheme, a unique patent royalty exemption and a much improved Business Expansion Scheme and Seed Capital Scheme.
In Technology, Paul Foley has over twelve (12) years experience in advising technology companies on the taking of investment, corporate structures, the purchase and sale of technology companies and the structuring of product offerings, particularly those geared to the financial services and insurance sectors.
- Business Expansion Scheme and Seed Capital Scheme investments, developing compliant structures
- Data Licence agreements The creation and compilation of data and licensing access to it has, with the development of technology and the internet, become a significant new business area. This data may be created by a database owner or be licensed in by it.
- Development agreements for auction platforms, for financial services systems
- eCommerce Platform licensing and development of systems that allow for inventory management, purchaser data capture, purchase of goods and the provision for payment functionality
- Electronic Signatures Directive and contracting electronically with customers
- Escrow agreements for source code
- Facilities Management and Disaster Recovery agreements
- Holding company structures for technology companies
- Internet Search Engine Optimisation agreements
- Intellectual Property Rights protecting works in which Intellectual Property rights may exist for international exploitation
- Licence agreements for software, including open source licensing and the implications for the company in taking such a route
- Maintenance agreements for hardware and software, how to structure them from the buyer and sellers perspectives
- Online Software Distribution Agreement. This type of agreement is designed for the owner to grant to distributors, the right to distribute software over the internet.
- Outsourcing and managed services agreements, their structuring, drafting and negotiation, including, technology obsolescence, SLA structuring and regulatory requirements in the financial services sector which impact the drafting and content of the agreement
- Purchase and sale of technology companies and related due diligence
- Procurement including drafting technology procurement contracts. In the case of public procurement, providing advice on classification of a proposed procurement from the perspective of the procurement directives, procurement and energy efficiency issues
- Patent Royalty structures in order to comply with the Patent Royalty Exemption. Ireland has a unique Patent Royalty Exemption. Irish resident Companies or individuals on making a claim are entitled to have certain income (exempt income) accruing from a qualifying patent disregarded for the purposes of Corporation Tax or Income Tax as appropriate ( up to a ceiling of 5 million Euro in any 12 months period). A qualifying patent is defined as a patent in relation to which the research, planning, processing, experimenting, testing devising, designing, developing or similar activity leading to the invention, the subject of the patent was carried out in Ireland or an EU member state. The patent does not need to be an Irish registered patent.
- R& D Tax Credit scheme. A 20% tax credit is available for incremental expenditure on research and development. Research and Development activities means, basic research, applied research or experimental development (as these terms are defined). Finance Act 2007 allows (subject to conditions ) for expenditure on subcontracting research and development to unconnected parties to qualify under the scheme, up to a limit of 10 per cent of qualifying R&D expenditure incurred by the company in any one year. However additional restrictions have been imposed by Finance Act 2008.
- Share options and share schemes ( both approved and unapproved). The implications of the Finance Act 2008
- Standards including on the advisability of becoming a member of a standards organization and also the pros and cons of seeking to have your technology adopted as a standard
- TUPE advice the provision of outsourced services to an end user may affect employment rights of either the supplier’s employers or his customer’s employees. We advise how to structure agreements to deal with the TUPE regulations
Contacts
Paul Foley (Partner) Profile
