Tom Maguire: Territorial gains to be won from tweaks to foreign income tax
The laws on taxing foreign income are complex and any moves to change and simplify the system will be welcomed by businesses, investors and the tax authorities
The public consultation on a potential move to a territorial system for tax purposes finished recently. That’s tax speak for allowing an Irish company to tax Irish income but exempt certain foreign income.
Why exempt foreign income? It has probably already been subject to foreign tax, so by exempting it in Ireland we are ensuring that it is not taxed twice. We already have an exemption for capital gains tax where certain conditions are met.