Groups above EUR 750M consolidated revenue face a 15% floor, and the domestic top-up tax carries its own filing obligation. What that adds for an Irish subsidiary of a large group.
- PRSI rate change mid-year
- Pillar Two scope test
- Does the 12.5% corporate tax rate still apply to all companies in Ireland?
Ireland applies a 12.5% corporate tax rate on trading income (25% on passive, non-trading income), among the lowest headline rates in the OECD, and has built three decades of foreign direct investment policy around that number. Budget 2026 leaves the rate unchanged, but its meaning has narrowed for large groups: under the OECD's Pillar Two framework, companies within groups with consolidated revenue of €750 million or more in at least two of the preceding four years now face a Qualified Domestic Top-Up Tax (QDTT) that brings the effective rate on their Irish profits to 15%, computed and filed as a distinct obligation alongside the standard CT1 return.
What a company pays in Ireland. Every figure below is published on the Ireland country page.
| Ireland | |
|---|---|
| Corporate tax rate | 12.5% trading income · 25% passive income · 15% minimum effective rate (QDTT) for groups with consolidated revenue ≥ €750M |
| VAT standard rate | 23% |
| VAT reduced rates | 13.5%, a second reduced rate of 9% (from July 2026: restaurant/catering, hairdressing, gas & electricity), 4.8% livestock rate, and 0% zero rate (basic food, children's clothing) |
| Accounting standard | FRS 102 (Irish/UK GAAP), or IFRS for larger and listed entities |
| Currency | EUR |
What makes it complex in Ireland
- PRSI rate change mid-year — — employer Class A PRSI rises from 11.25% to 11.40% on 1 October 2026, with a lower 9.15% band for weekly earnings at or below €441, so payroll applies two different rates within the same tax year.
- Pillar Two scope test — — €750M consolidated group revenue checked annually against the preceding four years, determining whether the separate QDTT return must be filed alongside CT1.
Does the 12.5% corporate tax rate still apply to all companies in Ireland?
Yes, for trading income, and this remains unchanged in Budget 2026. But groups with consolidated revenue of €750 million or more in at least two of the preceding four years face an additional Qualified Domestic Top-Up Tax that brings their effective rate on Irish profits to 15%, filed separately from the standard CT1 return.
What's the difference between trading and passive income for tax purposes?
Trading income — income from an actively conducted trade — is taxed at 12.5%. Passive income, including most rental and investment income, is taxed at 25%. Correctly classifying income at source materially affects the company's overall tax position.
PRSI rate change mid-year is one of the points HTLC Network handles for clients operating in Ireland, within a single engagement that covers every other country they operate in — executed locally, governed centrally.
In Ireland the scope is: Statutory accounts under FRS 102 or IFRS, VAT returns across Ireland's three active rates, and CT1 corporation tax filings including QDTT computation for in-scope groups.
See Accounting & Tax Compliance in Ireland for the full scope, or the Ireland country page for the statutory framework across every service.
Figures as published on the HTLC Network country pages, reviewed September 2026 and collected from public sources. They are not a substitute for advice on a specific case and should be verified before being relied on.