Real estate investment trusts (REITs) in Ireland were established in 2013 through the Irish Finance Act. The main objective of the REIT legislation is to attract foreign investments on the real estate market in Ireland. This type of investment fund is a legally recognised entity available across the world and foreign investors who are interested in opening a company in Ireland in this field will have to list the company on the Irish Stock Exchange. Our team of Irish lawyers can offer an in-depth presentation referring to the registration of this type of investment vehicle.
Registration of a REIT in Ireland
When forming a new company established as a REIT in Ireland, the investors will have to present a set of documents at the Revenue Commissioners. The main requirements the investors should meet are the following:
• the company must be registered as an Irish resident legal entity;
• it was incorporated following the procedures available under the Companies Act;
• it is listed on the local stock exchange;
• it is not a close company (which refers to the number of investors).
Taxation of an Irish REIT
Companies which meet all the criteria imposed by the local authorities will be exempted on the corporation tax applicable to the rental profits or the property gains. However, Ireland applies to this vehicle the withholding tax on dividends, imposed at the rate of 20%. The regulations in this sense specify an exemption from the payment of the withholding tax on dividends available for professional investors representing pension funds and several investment undertakings, on which our team of attorneys in Ireland can provide more details.
The distributions from a REIT will be taxed with a25% corporate tax, as well as for the disposal of shares, which is applied at the rate of 33%.
It is important to know that the Irish shareholders are also liable to taxation in a REIT. If the shareholders aretax residents in a foreign country, they can benefit from the stipulations of the double taxation treaties signed with that particular state regarding thetaxation of dividends.
Businessmen interested in receiving further details on the real estate investment trusts in Ireland can address to our Irish law firm.