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TL; DR: I am moving from an "auto-entrepreneur" situation in France to opening a business and I am looking for the best country between the UK and Ireland that could host my business in terms of taxations as well for residency. Are software development and consulting services tax-exempted for a newly registered company in Ireland?

Indeed, I propose software development and consulting services, in collaboration with two freelancers, and I expect a turnover of maximum 58 350€, and probably more than 37 350€, mainly with clients in France. My expenses (the price of my freelancers) will be 27 000 €. I would have a net profit of 38 350€ maximum. I have a "pre-settled" situation in the UK until 2025, which allows me to open a business here. I first thought of opening my business in the UK when I read this:

The corporate tax rate is much more advantageous in England than in France. It varies according to the amount of profits. It is 0% for profits below 15 583€, between 0 and 19% for profits between 15 584€ and 77 919€, between 19 and 30% for profits between 77 920€ and 233 754€ and 30% beyond. This rate is more interesting than the 33% rate in force in France. - bloginfluent.fr

So, economically, it makes sense since I would be taxed on my profits: (38 350-15534)*20% = 4563.2€.

And maybe it could have helped me extend my pre-settle status as I don't live most of the year in the UK. But I recently thought about Ireland, and I read that it is an even better situation:

The UK offers one of the lower rates of corporation tax in the EU, currently at 20%. Ireland however offers an even more competitive rate of 12.5% for trading income. This is substantially lower than most leading economies, including the UK, France, Germany, the USA and China. Both countries also boast double taxation treaties with most of the world’s leading economies.

International businesses looking to expand elsewhere in Europe can benefit hugely from a base or holding company in Ireland. As long as your company doesn’t make money from Irish customers, you should be eligible for a complete tax exemption on international income. A three year tax exemption is also available to certain businesses offering qualifying goods and services. - eurostartentreprise.com

So, if I don't qualify for the tax exemption on international income, the company will be taxed on the profits: 38350* 12,5% = 4793.75 €.

So I get these profits after paying the freelance bills and taxation.

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So the difference will be between €130 and €3000. The latest is quite an amount of money but if it helps me to keep some residency status or get a Visa I would be okay with registering in the UK. However, if I can get some tax exemption in Ireland, I would definitely register my company there! So are software development and consulting services tax-exempted in Ireland?

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  • Do you also want to live in Ireland/UK or do you want to stay in France and just pay less taxes?
    – Solarflare
    Jun 5, 2022 at 11:09
  • @Solarflare I am a digital nomade, I want to work from wherever I want (France, UK, Europe ...) and pay less taxes as long as it is legal. I will only own this company, the director might be somebody different
    – Revolucion for Monica
    Jun 5, 2022 at 15:31
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    The problem is that the money the company owns (and paid low taxes for) is not money you own. If you extract it to you to buy food, it is (usually) your personal income and is (usually) taxed in the country you are legally a resident of. See Apples Irish money: to get irish money to the us, they need to pay new taxes to the us. So your planned residency/living status may be relevant for your situation and you may want to include it to double check if it's feasible.
    – Solarflare
    Jun 5, 2022 at 15:57
  • I'd check where you got your numbers for UK corporation tax from. It's not what I think it is.
    – gnasher729
    Jun 6, 2022 at 9:12
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    If you are aware about the complications, it's fine. This (and gnashers answer) was just supposed to be a fair warning that you personally may not save any money compared to e.g. self-employment this way. All countries want tax payers and most of them are actively fighting tax havens (e.g. the EU had to sue Ireland to force Ireland to force Apple to pay even the low Ireland tax that Ireland didn't even want to collect), in a way that makes it very hard for a normal citizen to actually save taxes by just signing a form to move a company somewhere.
    – Solarflare
    Jun 6, 2022 at 10:08

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Before you go any further please make a very big note in your head that "your company" and "you" are different entities. "You" can't just take your company's money. You can be employed by your company and get paid a salary on which you pay income tax. If you are a company director, you can get a director's loan which must be repaid in full so that doesn't help you. (And as a director you are personally liable). You can pay the company's shareholders, including yourself, a dividend, which will be taxable. There are lots of different taxes to be paid, not just corporation tax.

And then you have to find someone willing to pay for your services. The more complicated, the less willing they are. The company currently benefitting from my work (not my employer) has a rather simple contract with an agency who handles all this stuff professionally (not my employer) and who knows all the traps that you can fall into. I'm quite sure they wouldn't want a contract with an amateur. Too risky, because if things go wrong, the tax man will come after them.

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  • Of course, I don't intend to live on my company's money. I will either have some dividends or get the money when and if I close the company. I already have someone paying for my services. My question is whether development and consulting services are tax-exempted for a newly registered company in Ireland
    – Revolucion for Monica
    Jun 6, 2022 at 9:41
  • You pay dividend tax on dividends. You pay full income tax on all the money you take out when you close the company. Whether what you do will count as "qualifying research and development" can be doubtful.
    – gnasher729
    Jun 6, 2022 at 10:56
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    If getting tax benefits for research and development is half as difficult as in the UK, then consider it a full time job, for someone who is experienced handling bureaucracy. At the amounts of money you are talking about, simplifying is much more beneficial than trying to minimise taxes.
    – gnasher729
    Jun 6, 2022 at 14:05

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