Allowance for Corporate Equity:
Interest payments to 75%-nonresident affiliated companies may be treated as distributions of profit and consequently are not deductible.
Any expenses incurred wholly and exclusively for the purpose of the business may be deducted.
Capital allowances are available in lieu of depreciation of certain assets (for example, certain industrial buildings and items of plant and machinery). There are accelerated capital allowances for energy efficient equipment which allow the full amount of depreciation to be claimed in year 1 instead of spread out over 8 years.
A tax credit of 25% of qualifying Research and Development (‘R&D’) expenditure is available which includes capital expenditure on buildings/structures used for purposes of carrying on qualifying R&D activities.
Tax relief is given in the form of capital allowances for capital expenditure on the acquisition of specified intangible assets for the purposes of trade.
A start-up company that commences a new trade may be exempted from corporation tax for the first three years of trading in respect of the profits and chargeable gains related to that new trade. This relief is targeted at small start-ups and is subject to limits on the total amount of relief given, with a link to employment created by such companies.
Credit Unions and certain State-controlled bodies are exempt on all of their profits. Charitable companies promoting amateur or athletic games or sports, friendly societies, trade unions, approved superannuation funds and mutual trading companies are all exempt from corporation tax on income, which fulfils certain statutory requirements. Profits from stallion fees to 31 July 2008, stud greyhounds and certain woodlands are exempt. Certain grants to industrial undertakings and certain employment grants are also exempt.
Relief for increases in stock values is available in respect of the trade of farming. The relief consists broadly of allowing a deduction in computing trading profits of 25% (or 100% in the case of certain young farmers who have undertaken designated training and in the case of restocking using compensation payments from disease eradication schemes).