The 3 year Corporate and Capital Exemption scheme for start up Companies was first introduced in 2009 although the terms of the scheme were modified in the 2011 budget. The relief has the potential to enable new start-up businesses be exempt from corporation tax in each of their first 3 years provided that their tax liability in the year does not exceed €40,000 (i.e. Profits less than €320,000).
The modification in the 2011 budget limited the relief to the amount of employers PRSI paid by a Company in an accounting period, subject to a maximum of €5,000 per employee. If the amount of qualifying employers PRSI is lower than the reduction in Corporation Tax Liability otherwise applicable, relief will be based on the lower amount.
The 2013 Budget provides for unused relief arising in the first 3 years of trading to be carried forward for use in subsequent years. It was due to expire in 2014 but has been extended to 2018
The relief excludes certain trades and professional services.
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