Concept
Ireland is one of the most popular EU holding jurisdictions. The combination of a low 12.5% rate on trading profits, an extensive network of tax treaties, and an English-language common law system makes it a convenient location for the parent company of an international group. Passive and non-trading income is taxed at a higher rate—25%.
History
Low corporate tax has attracted the headquarters of American technology and pharmaceutical groups to Ireland for decades. Under pressure from the OECD and the global minimum tax reform, the country has retained the 12.5% rate for most companies, adding Pillar Two rules on top for the largest groups.
Pillar Two
Since 1 January 2024, Ireland has applied Pillar Two rules: the Income Inclusion Rule and a Qualified Domestic Minimum Top-up Tax (QDTT), and from 2025—the Undertaxed Profits Rule. Groups with consolidated revenue of €750 million or more must top up to an effective 15%. For smaller companies, the base rate of 12.5% remains.
Holding Exemptions
A holding company in Ireland relies on two exemptions. The first is for capital gains (substantial shareholding exemption): the sale of a stake of at least 5%, held for 12 months, in a subsidiary from the EU or a tax treaty country is exempt from capital gains tax. The second appeared recently: from 1 January 2025, a participation exemption for foreign dividends applies—distributions from EEA countries and treaty partners, with a stake of at least 5% held for 12 months, can be exempted from Irish tax.
⚙️ The exemption for foreign dividends is an optional regime. The previous system of "tax plus foreign tax credit" continues to apply for those who have not elected the new regime; in practice, the structure is calculated under both options and the more favourable one is chosen.
Treaties and Intellectual Property
🔗 Related
Holding Structures · Holding in the Netherlands (BV) · Luxembourg SOPARFI · Cyprus Holding · Economic Substance
Ireland's strong point is a network of 74 tax treaties, covering all major economies and reducing withholding tax on incoming flows. For intellectual property businesses, separate incentives apply: the Knowledge Development Box regime and an R&D tax credit, which historically attracted technology groups to the country.
🍓 Ireland is strong as a holding and operational base for groups with a real presence and trading activity. For large international groups, the decisive factor has become Pillar Two: the nominal 12.5% remains, but an effective minimum of 15% is now inevitable for them.
This material is for reference purposes only and does not constitute individual advice.
Key factual claims
- Since 1 January 2024, Ireland has applied Pillar Two rules: the Income Inclusion Rule and a Qualified Domestic Minimum Top-up Tax (QDTT), and from 2025—the Undertaxed Profits Rule.
- Ireland's strong point is a network of 74 tax treaties, covering all major economies and reducing withholding tax on incoming flows.
- Related links: Holding Structures · Holding in the Netherlands (BV) · Luxembourg SOPARFI · Cyprus Holding · Economic Substance · Revenue.ie: Pillar Two · Revenue.ie: participation exemption (TDM 35-02-11).