12 Aug 2003 - Irish companies & invoicing intra-european
MONACO CORPORATE
SECRETARIAT
International tax planning
Protecting your assets is our mission
Irish companies & invoicing intra-European
When trading intra European Ireland is and has been a favourable jurisdiction. Up until 1999 the Irish non resident company was an acceptable vehicle to use for trading across European borders, however
1. IRISH COMPANIES
Since 1999 all Irish companies :
- have been taxable (i.e. subject to Irish corporation tax) and be considered tax resident in Ireland. The current Irish corporation tax on trading income is 12.5 % p.a.
- Must have one local (Irish resident) Director (or lodge IR£ 20,000.- as a deposit with the Irish government).
- Directors may only hold a maximum of twenty five Irish company Directorships.
2. OFFSHORE EUROPEAN COMPANIES - WHERE ACCEPTABLE
There are still several European Anglo Saxon jurisdictions where I.B.C. style tax exempt companies may be used. These include Jersey, Guernsey, Isle of Man Singapore and Gibraltar. Jersey, Guernsey, Singapore and Gibraltar are not part of the British V.A.T. regime whereas the Isle of Man is - however it is possible to obtain a British V.A.T. for any of these jurisdictions' companies. Jersey, Guernsey and Isle of Man all have expensive annual jurisdiction fixed government levies. Gibraltar does not. Thus for comparable benefits to the old pre 1999 Irish non resident company we suggest a Gibraltar company.
3. ONSHORE USE OF AN IRISH RESIDENT COMPANY
When large or regular amounts are required to be billed to a continental European company in a high tax jurisdiction there are two onshore ways of being able to get these amounts out. They involve using either an agency arrangement (with an onshore Irish or U.K. company) or a limited partnership (English or Scottish).
- With an agency arrangement an onshore tax resident, Irish V.A.T. registered Irish company with resident Irish Directors and shareholders acts as an undisclosed agent for an offshore beneficiary (a traditional I.B.C. style company). These arrangements are defined by contract. The Irish company invoices the continental European company takes an agency fee of 7.5% (which is the Irish company's turnover) and pays the 92.5% directly free of all charges (other than bank charges) to the offshore company. There are variations of this whereby in a trading situation the agency fee is worked out on the gross margin (sales less purchases) or where the amounts are large the agency fee may be slightly less than 10%. What makes this structure ideal is that one onshore Irish company may be an agent for several quite different client, transactions thus giving the Irish company legitimacy. Also an Irish company may have up to four different trading names. An agency arrangement may also be operated by an English company although it should be noted that the U.K. revenue is currently studying agency arrangements for U.K. companies.
- With a limited partnership you have an onshore tax resident British V.A.T. registered English (or Scottish) company with resident British Directors and shareholders acts as a limited partner with the offshore company as an undisclosed general partner (with unlimited liability). These arrangements are defined by contract. Also defined in the contract is the limited partners fee (either as a percentage or as a fixed amount). The partnership invoice the continental European company pays the limited partners fee and then pays the balance to the offshore company.
4. SUMMARY
While the end of the Irish non resident caused many traders to revaluate ? there are replacements. However to which extend these replacement suits a trader depends very much on the activities of that trader i.e. which markets he wants to bill into, the levels of profits that he wants to take out, where the trader himself is resident and to what extend the trader himself is willing to pay for a structure.
More information
For further information please contact :
Derek R. SMITH of M.C.S
Email: assetprotect@libello.com
Tel: +377 9797 6230
Fax: +377 9797 6233
While every effort has been made to ensure that this information sheet is accurate and up-to-date we cannot be held responsible for any errors or omissions.
International tax planning
Protecting your assets is our mission
Irish companies & invoicing intra-European
When trading intra European Ireland is and has been a favourable jurisdiction. Up until 1999 the Irish non resident company was an acceptable vehicle to use for trading across European borders, however
1. IRISH COMPANIES
Since 1999 all Irish companies :
- have been taxable (i.e. subject to Irish corporation tax) and be considered tax resident in Ireland. The current Irish corporation tax on trading income is 12.5 % p.a.
- Must have one local (Irish resident) Director (or lodge IR£ 20,000.- as a deposit with the Irish government).
- Directors may only hold a maximum of twenty five Irish company Directorships.
2. OFFSHORE EUROPEAN COMPANIES - WHERE ACCEPTABLE
There are still several European Anglo Saxon jurisdictions where I.B.C. style tax exempt companies may be used. These include Jersey, Guernsey, Isle of Man Singapore and Gibraltar. Jersey, Guernsey, Singapore and Gibraltar are not part of the British V.A.T. regime whereas the Isle of Man is - however it is possible to obtain a British V.A.T. for any of these jurisdictions' companies. Jersey, Guernsey and Isle of Man all have expensive annual jurisdiction fixed government levies. Gibraltar does not. Thus for comparable benefits to the old pre 1999 Irish non resident company we suggest a Gibraltar company.
3. ONSHORE USE OF AN IRISH RESIDENT COMPANY
When large or regular amounts are required to be billed to a continental European company in a high tax jurisdiction there are two onshore ways of being able to get these amounts out. They involve using either an agency arrangement (with an onshore Irish or U.K. company) or a limited partnership (English or Scottish).
- With an agency arrangement an onshore tax resident, Irish V.A.T. registered Irish company with resident Irish Directors and shareholders acts as an undisclosed agent for an offshore beneficiary (a traditional I.B.C. style company). These arrangements are defined by contract. The Irish company invoices the continental European company takes an agency fee of 7.5% (which is the Irish company's turnover) and pays the 92.5% directly free of all charges (other than bank charges) to the offshore company. There are variations of this whereby in a trading situation the agency fee is worked out on the gross margin (sales less purchases) or where the amounts are large the agency fee may be slightly less than 10%. What makes this structure ideal is that one onshore Irish company may be an agent for several quite different client, transactions thus giving the Irish company legitimacy. Also an Irish company may have up to four different trading names. An agency arrangement may also be operated by an English company although it should be noted that the U.K. revenue is currently studying agency arrangements for U.K. companies.
- With a limited partnership you have an onshore tax resident British V.A.T. registered English (or Scottish) company with resident British Directors and shareholders acts as a limited partner with the offshore company as an undisclosed general partner (with unlimited liability). These arrangements are defined by contract. Also defined in the contract is the limited partners fee (either as a percentage or as a fixed amount). The partnership invoice the continental European company pays the limited partners fee and then pays the balance to the offshore company.
4. SUMMARY
While the end of the Irish non resident caused many traders to revaluate ? there are replacements. However to which extend these replacement suits a trader depends very much on the activities of that trader i.e. which markets he wants to bill into, the levels of profits that he wants to take out, where the trader himself is resident and to what extend the trader himself is willing to pay for a structure.
More information
For further information please contact :
Derek R. SMITH of M.C.S
Email: assetprotect@libello.com
Tel: +377 9797 6230
Fax: +377 9797 6233
While every effort has been made to ensure that this information sheet is accurate and up-to-date we cannot be held responsible for any errors or omissions.