Ireland Enhances Its Leasing Regime

Author:Mr Gerry Thornton
Profession:Matheson Ormsby Prentice

New tax credit for non-treaty withholding taxes

Ireland is a world-leading jurisdiction for leasing business and has recently improved its tax regime for cross-border leasing. Irish lessors have always been entitled to the benefit of Ireland's wide tax treaty network (currently 66 tax treaties). Tax treaties play a key role in Ireland's successful leasing industry by reducing or eliminating withholding taxes on inbound lease rental payments. Tax treaties also allow Irish lessors to claim tax credits against their Irish corporation tax for any unrelieved foreign withholding taxes. However, until recently, an Irish lessor could not claim a similar tax credit for foreign withholding taxes where no tax treaty applied. In a welcome development, an Irish lessor carrying on a trade in Ireland may now also claim a tax credit for foreign withholding taxes on lease rentals where there is no applicable tax treaty. The relief is granted on a unilateral basis by Irish domestic law. This latest improvement will position Ireland as an attractive leasing jurisdiction for leasing aircraft and other assets into jurisdictions which do not have a wide tax treaty network.

Flight crew on international flights

The Irish tax authorities recently published guidance on the payroll tax treatment of flight crew. This guidance follows recent tax...

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