Budget 2009 - Corporation Tax

Preliminary Tax Payment dates for Large Companies

Companies with a corporation tax liability of more than €200,000 in their previous accounting period are obliged to pay preliminary corporation tax, amounting to 90% of the final liability for the current accounting period, one month before the end of the current accounting period (but not later than the 21st of the relevant month). The current single payment for such companies’ preliminary corporation tax will now be due in two instalments. This will apply to accounting periods commencing on or after 14 October 2008.

The first instalment will be payable in the 6th month of the accounting period (i.e. 21 June for a company with calendar year accounts) and the amount payable will be 50% of the corporation tax liability in the preceding accounting period or 45% of the corporation tax liability for the current accounting period.

The second instalment will be payable (as at present) in the 11th month of the accounting period (i.e. 21 November for a company with calendar year accounts) and the amount payable will bring the total preliminary tax paid to 90% of the corporation tax liability for the current accounting period.

Tax Credit scheme for Research and Development Expenditure

The current 20% rate of tax credit for incremental expenditure undertaken by a company on qualifying research and development (R&D) is being increased to 25%. This will apply to accounting periods commencing on or after 1 January 2009.

3 Year tax exemption for Start-up Companies

New start-up companies which commence trading in 2009 will be exempt from corporation tax and capital gains tax in each of the first 3 years provided that their tax liability in the year does not exceed €40,000.

This measure is being examined to ensure that it is in compliance with EU rules on State-Aid. Further details of this incentive will be contained in the Finance Bill.