How corporate tax works in Ireland
An Irish-resident company is generally taxed on worldwide profits. Trading income usually falls into the 12.5% corporation-tax rate. Many passive items such as rental income, certain interest and non-trading income are taxed at 25%.
Ireland remains a major location for multinationals because of the trading rate, EU membership, treaty network and holding-company infrastructure. That does not mean a zero-substance 12.5% answer: transfer pricing, interest limitation, CFC-style rules and Pillar Two all matter.
Groups with consolidated revenue of EUR 750 million or more can face Ireland’s 15% minimum tax framework. Qualifying R&D and Knowledge Development Box regimes can still improve the effective rate for genuine IP and research activity.
Tax rates at a glance
- Trading profits
- 12.5%Headline
- Passive / non-trading
- 25%
- Company capital gains
- 33%
- Pillar Two minimum
- 15%
- Knowledge Development Box
- Effective 10%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersMultinationalsHolding companiesIP and tech groupsCross-border operators
Watch out for
- 12.5% only applies where the income is correctly characterised as trading. Passive income can jump to 25%.
- Extracting profits to individuals can reintroduce high personal tax through salary, bonuses or dividends.
- Employer PRSI, VAT registration, local property costs and economic substance still shape the all-in operating cost.
- Large groups should model Pillar Two before assuming the domestic 12.5% rate is the final effective rate.
Frequently asked questions
What is Ireland’s corporate tax rate?
The standard rate on trading profits is 12.5%. Many passive incomes are taxed at 25%, and large multinationals can face a 15% minimum under Pillar Two.
Is Ireland still attractive for companies in 2026?
Yes for many trading and holding structures, but substance, transfer pricing and minimum-tax rules mean the old “rate only” pitch is incomplete.
Are company capital gains taxed at 12.5%?
No. Corporate capital gains are generally taxed at 33%, separate from the trading corporation-tax rate.