Search

Digitalize Global

The importance of an Irish company secretary, tax residency and corporation tax

The importance of an Irish company secretary for tax residency and corporation tax purposes

Company Secretary in the context of tax residency and incorporation

In this blog post, we will discuss the important role of an Irish company secretary in relation to the tax residency of a company and the application of the Corporate income tax and Double taxation agreement (DBAs) in more detail.

What is a company secretary?

A company secretary is a prescribed function within an Irish limited company under Irish company law. Every Irish company must appoint a company secretary throughout its existence. This role performs important statutory and administrative duties to ensure the company's compliance with relevant regulations such as the Companies Act 2014.

Duties of an Irish Company Secretary:

  • Maintenance and updating of the Register of Beneficial Shareholders
  • Monitoring the deadlines for submitting the annual financial statements and uploading the financial reports
  • Notification of changes in the company structure or office address to the Companies Registration Office
  • Recording the minutes of meetings, in particular the Annual General Meeting

Application for the foundation

In order to Limited liability company in Ireland to form a company, at least one of the directors must be resident within the European Union. But what if a potential director does not have a partner and lives outside the EU?

An Irish company secretary and a non-EU resident director are unfortunately not sufficient to meet the residency requirements for incorporating a Limited Company in Ireland. In this scenario, the director must either be resident in the EU or the company must post a guarantee of EUR 25,000 to meet the legal requirement.

Tax residency and corporation tax

The appointment of an Irish resident company secretary is not sufficient to establish the place of effective management (management and control) in Ireland. Residency for tax purposes is primarily determined by the place of management. If the company is not considered resident in Ireland, a higher corporation tax rate of 25 % may be applied instead of the preferential rate of 12.5 %.

Double taxation agreements (DTAs)

Appointing an Irish company secretary can help to demonstrate the necessary substance in Ireland to take advantage of double taxation agreements (DTAs) entered into by Ireland with other countries, including EU countries.

The DTAs regulate in which country a company's income is taxed and how double taxation is avoided. Appropriate management and control in Ireland by a resident director can help a company to take advantage of the DTAs.

Conclusion

The appointment of an Irish company secretary alone is not sufficient to ensure the tax residency of a company in Ireland and the application of the favorable corporation tax rate of 12.5 %. It is essential that at least one director is resident within the EU or an appropriate guarantee is lodged in order to meet the legal requirements and benefit from the tax advantages and double taxation treaties.

Was this useful?

Yes
No
Thank you for your feedback!
Disclaimer: Please note that the above dates, tax rates and regulations may change over time. Do not make any independent decisions without first consulting an expert for your individual situation. It is in your interest to always receive individual information from an experienced expert who knows your situation.

Leave a Reply

Your email address will not be published. Required fields are marked *

Leave the field below empty!

Similar topics
New