Favourable Irish tax treatment exists with regard to the transfer of shares in Irish companies between non-Irish residents.
Where carefully structured, no Irish Capital Gains Tax (“CGT”) will arise on the disposal by a non-Irish resident individual or corporate of the shares in the Irish company.
Also, depending on the market value of the shares in the Irish company or whether any relief is possible under Irish tax law, no Irish stamp duty may arise on the acquisition by a non-Irish resident individual or corporate of a shareholding interest in an Irish company.
Disposal Of Shares In An Irish Company By A Non-Irish Resident
A non-Irish resident person is liable to Irish CGT at a rate of 33% in respect of chargeable gains arising on the disposal of the following assets (i.e. “Specified assets”):
- Land, buildings, mineral and exploration rights situated in Ireland; or
- Unquoted shareholdings in a company which derive the greater part of their value from the assets listed at #1; or
- Capital assets used for the purposes of a trade carried on in Ireland through a permanent establishment
Therefore, if the shares in the Irish company are either:
- quoted, or
- unquoted and do not derive their value from Irish land, buildings, mineral or exploration rights,
no Irish CGT will arise on the disposal of the shares in the Irish company by the non Irish resident individual or corporate.
No Irish VAT arises on the disposal of shares in Irish companies.
Acquisition Of Shares In An Irish Company By A Non-Irish Resident
Irish Stamp Duty
The transfer of shares in Irish incorporated companies (quoted or unquoted) with a value in excess of €1,000 is liable to Irish stamp duty at the rate of 1%.
This duty is levied on the market value of the shares or the consideration provided, whichever is greater. The duty is payable by the transferee.
If an Irish stamp duty liability arises on the transfer of the shares in an Irish incorporated company and the transfer of the shares is between two group companies, Associated Companies Relief (i.e. group relief) may be claimed on the transfer provided certain conditions are satisfied.
No Irish VAT arises on the acquisition of shares in Irish companies
Disclaimer: Please note that this commentary does not purport to be a comprehensive review of the Irish taxation treatment on the transfer of shares in Irish companies by non-Irish residents. Detailed appropriate advice should be taken before any particular transaction is entered into.