Transcript Swedish chamber of commerce tax incentives for business

SWEDISH CHAMBER OF COMMERCE
TAX INCENTIVES FOR BUSINESS
GERRY VAHEY
11 April 2013
TABLE OF CONTENTS
1.
Corporation Tax Rates, Losses, deductions etc
2.
Start up Exemption
3.
Holding Company – Participation Exemption
4.
Research & Development Tax Credit
5.
EIIS & Seed Capital Relief
6.
Assignment Relief (“SARP”)
7.
Foreign Earnings Deduction (“FED”)
8.
Other Issues
2
CORPORATION TAX - GENERAL
• 12.5%, 25%
• Tax deduction for most items of expenditure
• Incorporation versus Sole Trade
• Intangible Assets
3
START UP EXEMPTION
•
Overview
•
Relief from Corporation Tax
•
First 3 years Profits
•
Incorporation and Commencement
•
Employment Based Relief
START UP EXEMPTION
•
The Relief
•
Relief of up to €40,000
•
Marginal Relief to €60,000
•
Trading Profits
•
Carry forward of losses
HOLDING COMPANY – PARTICIPATION EXEMPTION
HoldCo
Trade Co
6
RESEARCH & DEVELOPMENT TAX CREDIT
• 25% Tax Credit
• Offset against Corporation Tax
• Refunded over 3 years
• Reward key employees
COMPANY TAX CREDIT €60,000
RDTC
Year 1
Refund
Year 2
Refund
Year 3
Refund
Year 4
Refund
Year 1
20,000
20,000
20,000
-
Year 2
-
20,000
20,000
20,000
Year 3
-
-
20,000
20,000
Year 4
-
-
-
20,000
20,000
40,000
60,000
60,000
DIRECT R&D EXPENDITURE
Direct Staff Costs
Plant & Machinery
Buildings
(Special Improved
Rules Apply)
Raw Materials
Sub Contracted
R&D Costs
(Rules)
Fixtures &
Fittings
Direct Over-heads
Computer
Software &
Hardware costs
Other ?
SOME….QUALIFYING ACTIVITIES
prototyping design
trials testing moulding
workings drawings
recipes blending reaction
extensive testing process &
output performance Stability
control
failed attempts
Qualifying
Activities
first batch scale up
production clinical trials
process & output
improvements
Algorithm & OS
development statistical
data management generic
software improvements
SOME …. QUALIFYING ACTIVITIES (BROWN COAT?)
Process Improvements :
Definable Increases in
Output, Volume, Running
Time etc
Automation
MONEY BACK FROM REVENUE
•
•
Reliefs
•
Employment and Investment Incentive Scheme (EIIS)
•
Seed Capital Relief
•
Start-up Relief
How these interact with
•
R&D Tax Credit
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
•
Benefits
•
Cash for Company
•
Income Tax Relief for Investor
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
•
The Company
•
Trading company
•
Unquoted
•
Residence & Incorporation
•
Micro, Small and some Medium Sized Enterprises
•
Max Lifetime limit of €10m
•
Max Annual limit of €2.5m
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
•
The Investor
•
Resident in Ireland
•
Hold shares for 3 years
•
Not connected to company
•
Relief of €150,000 in any one year
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
•
Tax Relief
•
Initially - 30%
•
After 3 years - 11%
EMPLOYMENT AND INVESTMENT INCENTIVE SCHEME (EIIS)
•
Practical Issues
•
EIIS Investors
•
EIIS Funds
•
Exit Strategies?
SEED CAPITAL RELIEF
SEED CAPITAL RELIEF
•
•
Key
•
Employment in last 6 years?
•
Paid PAYE on Employment Income?
Entitled to Income Tax Refund?!!
SEED CAPITAL RELIEF
•
The Relief
•
Refund of Income Tax
•
Max of €100k per annum
•
Previous 6 years
SEED CAPITAL RELIEF
•
Conditions
•
Investment in Shares
•
Qualifying Company
•
Creation of Employment
•
Qualifying Employment
ASSIGNMENT RELIEF “SARP”
• Inbound employees
• Exempt 30% of income - €75K to €30K
• Relevant Employee
23
FOREIGN EARNINGS DEDUCTION
• Outbound workers
• BRICS + Others
• Max relief is €35K
• Dependent on number of days
24
OTHER ISSUES
• Double taxation network
• Ease of administration
• Expansion abroad
• Remittance Basis
• Revenue Audits
25
CONTACT
Mazars
Harcourt Centre Block 3, Harcourt Road
Dublin 2, Ireland
Tel: +353 (01) 4494400
Email: [email protected]
Mazars Place, Salthill
Galway, Ireland
Tel: +353 (091) 583242
Email: [email protected]
mazars.ie