CORPORATION TAX EXEMPTION FOR NEW COMPANIES – DEADLINE 31 DECEMBER 2009

This relief enables start up companies, which are incorporated and commence trading in 2009 to have an exemption from corporation tax and capital gains tax in each of the first 3 years of trading. This tax break is the first of its kind and is a major advantage to eligible companies.

How it works:
The exemption is granted by reducing the total corporation tax liability (including chargeable gains) relating to the trade to nil. Full relief is granted where the total corporation tax liability does not exceed €40,000.

Marginal relief applies for companies with corporation tax liabilities of between €40,000 and €60,000.

No relief applies where corporation tax payable is €60,000 or more. The exemption is only available for a period of three years from the commencement of the new trade.

There are separate exemptions available for each new trade.

Where the relief doesn’t apply:

· When existing trades have been transferred to a new company

· Service companies and companies carrying on excepted trades cannot qualify for this exemption.

· The relief will cease if the trade qualifying for the exemption is transferred to a connected person.