One way of doing this is to ensure that we are maximising all the taxation reliefs and exemptions that are available to us.
O Connor Pyne & Co is delighted to provide you with some tax tips of saving cash during these recessionary times.
Corporation Tax
As we all know, during a recession the most successful entrepreneurs are born.
Are you considering starting up your own company?
Corporation Tax Exemption
A three year exemption from taxation on trading profits and capital gains for companies with a tax liability of less than €40,000 per annum was announced in the Budget 2009.
- The exemption works by reducing the corporation tax attributable to certain profits to nil. However a marginal relief applies where the total corporation tax payable by the new company is between €40,000 and €60,000. This relief applies for three years from the commencement of the trade, subject to certain conditions.
- The new company must carry on a qualifying trade.
A qualifying trade is a trade which is set up and commenced by a new company in 2009 only. - To constitute a new company, it must be incorporated anywhere within the EU on or after 14 October 2008 and commence a new trade during 2009.
The following items are also restricted from this relief:
- Capital gains tax which would arise on the disposal of development land;
- A trade which was previously carried on by another person in the State;
- Close Service Companies.
If you have decided to set up a new company and have prepared forecasts or projections for the next three years, perhaps you would like us to review these projections to determine whether or not you will be able to avail of the corporation tax exemption.
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