Corporation Tax Calculator — Ireland 2026

What this calculator does

This tool estimates Irish corporation tax (CT) for a company for one accounting period. It applies Ireland's two main CT rates: 12.5% on active trading income and 25% on non-trading passive income. It also handles chargeable gains at 33%, capital allowances, trading loss relief, and the R&D tax credit.

It is designed for company directors, accountants, and finance managers doing preliminary tax planning — for example, estimating a CT bill before year-end or modelling the impact of a capital expenditure decision.

How Irish corporation tax is calculated

Step 1 — Trading Income

Start with your accounting profit from the main business activity. Adjust for non-deductible items (entertainment, fines, certain depreciation) to arrive at the taxable trading profit. Then deduct:

• Capital allowances — replaces accounting depreciation. Plant & machinery: 12.5% per year over 8 years (straight-line). Vehicles: capped at €24,000 cost.
• Trading losses — current year losses from the same trade, or brought-forward losses from prior years.

Step 2 — Non-Trading / Passive Income

Passive income (investment income, deposit interest, rent received as an investment — not a property trade) is taxed at 25%.

Step 3 — Chargeable Gains

When a company sells a capital asset (shares in a subsidiary, investment property, IP), the gain is subject to the 33% company CGT rate. This is added to the CT bill.

Step 4 — Gross CT

Step 5 — Apply Credits

Credits reduce the CT bill directly (unlike deductions which only reduce taxable income). Key credits:

• R&D tax credit: 30% of qualifying R&D expenditure. Excess can be refunded over 3 years.
• Employment Investment Incentive (EII): For companies that raised EII funding.
• Film Section 481 credit: 32% of qualifying film expenditure.

Worked examples

How to interpret your result

Effective rate versus headline rate

Ireland's 12.5% rate applies to taxable trading profit — not accounting profit. Capital allowances, loss relief, and certain deductions reduce the taxable base before the rate is applied. For a company with significant capital investment or R&D, the effective CT rate can be materially lower than 12.5%. A company spending heavily on equipment or R&D in a single year might have an effective rate of 5–8% or even achieve a net refund position.

Planning around preliminary tax

For companies whose prior year CT was €200,000 or less, preliminary tax of at least 90% of the final CT liability must be paid by day 31 before the accounting period end. For large companies (prior year CT over €200,000), two preliminary tax payments apply. Setting aside CT provisions monthly — roughly 12.5% of monthly net trading profit — prevents a cash flow shock at the preliminary tax deadline.

When credits exceed your CT bill

If R&D credits or other incentive credits exceed your CT liability, the excess is not wasted. R&D credits can be refunded by Revenue in cash over three years, or can be allocated to key employees as a payroll benefit. This makes the Irish R&D regime one of the most accessible for early-stage companies that are not yet profitable.

Common mistakes when calculating Irish CT

• Using accounting depreciation instead of capital allowances: Revenue does not accept accounting depreciation as a deduction. You must replace it with capital allowances (12.5%/year for plant & machinery). These are often different amounts, especially in the year of purchase.
• Claiming entertainment expenses: Client entertainment is explicitly disallowed as a deduction for CT purposes, even if it appears in the P&L. So is any expenditure with a dual personal/business purpose unless the business element is clearly identifiable.
• Misclassifying investment rental income as trading: If your company holds a property as an investment (not as part of a property development trade), the rental income is taxed at 25%, not 12.5%. The distinction matters significantly at higher income levels.
• Missing the R&D credit deadline: R&D claims can be made up to 12 months after the CT1 filing deadline for the accounting period in which the expenditure was incurred. Late claims are forfeited — don't assume you can revisit a prior year's R&D spend at any time.
• Not tracking brought-forward losses: Many growing companies have early-year losses that were not fully utilised. These carry forward indefinitely. Review your historic CT returns to ensure all available losses have been captured and are being used.
• Assuming director expenses are always deductible: Expenses paid to or on behalf of a director must be wholly, exclusively, and necessarily for business purposes. Personal phone contracts, home broadband, and similar mixed-use costs require careful apportionment.

Frequently Asked Questions

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