📘Estimate for 2026. Ireland taxes by income type — there's no marginal relief. This covers the SME position (12.5% / 25%); the 15% Pillar Two minimum applies only to groups over €750m. It doesn't model losses, group relief, the Knowledge Development Box or start-up relief. Not advice — confirm with an accountant.
How Irish corporation tax works
Ireland doesn't tax company profit at a single rate — it depends on the type of income. Active trading profit is taxed at the famous 12.5%; passive income — rent, interest and most foreign dividends — is taxed at 25%. There's no marginal relief or profit-band system like the UK's, so a company with both kinds of income pays a blended effective rate.
The close-company surcharge
Most owner-managed Irish companies are "close companies" (five or fewer participators). To stop passive income being rolled up inside a company at 25% instead of being taxed in the owner's hands, a 20% surcharge applies to investment and rental income that isn't distributed within 18 months (with a €2,000 de minimis). It's a common trap for companies holding rental property or cash.
R&D credit and Pillar Two
Qualifying research and development earns a 35% credit (raised from 30%) against the tax — on top of the normal deduction. The 15% Pillar Two global minimum tax only touches groups with €750m+ revenue; the vast majority of Irish companies are unaffected and stay on 12.5% / 25%.
Frequently asked questions
Is Irish corporation tax really 12.5%?
Yes, on trading profit. Passive income (rent, interest, foreign dividends) is taxed at 25%, so your effective rate depends on your income mix.
Does the 15% rate apply to me?
Only if you're in a group with €750m+ consolidated revenue. SMEs remain on 12.5% / 25%.
What's the close-company surcharge?
A 20% surcharge on undistributed passive income of a close company, to discourage sheltering investment income inside a company.
Related
Educational estimate — not tax advice. Ireland 2026: 12.5% on trading profit, 25% on passive/non-trading income, 20% close-company surcharge on undistributed passive income (€2,000 de minimis, modelled as 20% of after-tax passive income above the threshold), 35% R&D credit. It doesn't model trading losses, group relief, the Knowledge Development Box (10%), start-up relief, the precise surcharge mechanics, or the full Pillar Two/QDMTT computation. Confirm with
Revenue.ie and an accountant.