The company behind the Angry Birds phenomenon is the latest in a long line of European companies considering migrating to Ireland. With all the discussion centring on Ireland’s corporation tax rate, it is sometimes easy to forget about the other selling points of the Irish tax regime. Recent pro-business tax changes have been positively received by foreign investors doing business in Ireland. In addition to specific measures targeted at the international financial services industry, the many general enhancements should encourage further investment in Ireland.

Here are some of the key recent developments:

• Minimal Compliance Headaches

Ireland has maintained its position for the fifth year in a row as the easiest country in Europe to pay taxes in the World Bank and PWC ‘Paying Taxes in 2012’ Report. Ireland is also ranked fifth most user-friendly country for business taxes globally in 2012.

• Reducing Costs of Rewarding Employees

Employees sent to work in Ireland from abroad may now benefit from the enhanced Special Assignee Relief Programme (SARP) which provides an income tax exemption for a portion of a qualifying employee’s salary.

Companies can also now reward key employees (excluding directors) whose duties are primarily R&D related with a portion of the credit for R&D expenditure which can be used to offset the income tax liability of the employee. This R&D relief was previously only utilisable by the company itself against its corporate tax liability.

A further welcome measure is the reversal of the 2011 proposal to charge employer PRSI (social security contributions) on share based remuneration. Share based remuneration therefore continues to be exempt from the 10.75% employer PRSI.

A new Irish income tax deduction (capped at €35,000 per annum) is now available to employees sent to the “BRICS” countries for business purposes. BRICS includes South Africa (S), as well as the BRIC countries of Brazil, Russia, India and China.

• Irish Property

Irish property prices are now considerably down from the peak reached in 2006. A newly introduced relief from Capital Gains Tax applies to properties purchased before 31 December 2013, provided the property is held for seven years. A further positive change is a reduction in the rate of stamp duty (transfer tax) on commercial property (including business assets) to a maximum of 2%. Previously a rate of up to 6% applied.

• Research and Development (R&D) Regime

In addition to the potential to use R&D credits to reward key employees, further changes to the R&D regime should benefit companies. Previously the special R&D tax relief was only available to a company in a tax year if the company’s R&D expenditure in that year exceeded its expenditure in the base year which was set at 2003. This meant that companies already engaged in R&D in 2003 were at a disadvantage.

In future, the first €100,000 of qualifying R&D spend will benefit from the R&D credit regardless of the level of R&D expenditure of the company in 2003. Further enhancements also improve Ireland’s offering as a R&D centre.

• Other Enhancements

The corporation tax exemption for certain start-up businesses will be extended to include companies set up in 2012, 2013 and 2014. The exemption applies to new trading companies in respect of which the corporation tax payable does not exceed €40,000 in a year, provided other conditions in relation to the number of employees are satisfied.

When weighing up the positives of investing in Ireland, foreign investors are increasingly looking beyond the corporate tax rate to the host of other advantages offered by the Irish system – not least the finding that we are the easiest country in Europe to pay taxes!

Contributed by Niamh Keogh.