10.1

STAMP DUTIES AND CAPITAL DUTIES

Stamp Duties

Stamp duty is a once off tax on documents implementing certain transactions. The principal act governing stamp duty is the Stamp Act, 1891. The First Schedule to the Act, which has been amended over the years, sets out the transactions giving rise to a charge to duty. Under the Finance Act, 1991 any instrument which is executed on or after November 1, 1991 and which relates to property situate in Ireland or any matter or thing done or to be done in Ireland will require to be stamped within 30 days of execution, regardless of where it is executed.

Stamp duty on the transfer of shares is payable at the rate of 1% of the value of the consideration or, where the transfer constitutes a voluntary disposition, at the rate of 1% of the market value of the shares.

Deeds of transfer of immovable property and chooses in action are subject to stamp duty at rates that are progressively variable. The maximum rate is 6% of the value of the consideration where it exceeds IR£60,000 or, in the case of a voluntary disposition, 6% of the market value of the property transferred. For a transaction involving residential property (i.e. dwelling house plus one acre) the maximum rate is 9% where the consideration or value exceeds IR£500,000.

Stamp duty is also payable on the granting of leases of property. The stamp duty is calculated under two headings. First, where any consideration is paid for the granting of the lease, then the lease will be stampable with stamp duty calculated as a percentage of the consideration. Subject to the comments above in relation to residential property, the maximum amount payable is an amount equal to 6% (again, up to 9% for residential property) of the consideration paid where the consideration paid exceeds IR£60,000. Secondly, stamp duty is payable calculated on the basis of the rent reserved by the lease. The maximum amount of stamp duty payable under this heading is an amount equal to 12% of the annual amount of the rent where the term of the lease exceeds 100 years.

Stamp duty is also payable on mortgages, debentures, bonds, etc. charged over Irish property. While different rates of stamp duty are payable depending on the exact nature of the deed, stamp duty on the most usual forms of mortgages etc. has, with the passing of the Finance Act, 1991 been capped at IR£500.

Various reliefs from stamp duty exist for company reconstructions and amalgamations and for transfers of assets between associated companies.

Capital Duties

Capital duty is payable by a limited liability company where it allots shares. The amount of duty is 1% of the value of the assets contributed to the company for such shares. Capital duty is not payable by unlimited companies. A relief from capital duty also exists for certain capital company reorganisations.

10.2

CUSTOMS AND EXCISE DUTIES

Customs duties are EU duties which are levied on a variety of goods such as cars, textiles, televisions, VCR's and audio equipment imported from outside the EU. The rates of duty are many and varied.

Excise duties are Irish taxes which are levied on certain goods such as intoxicating liquor and tobacco whether imported from other EU countries or from outside the EU or whether manufactured in Ireland. Once again the rates are many and varied. There are however various reliefs from customs and excise duties.

10.3

INWARD PROCESSING SCHEME

Under this scheme, goods may be imported into Ireland for the purpose of being processed here and subsequently exported outside the customs territory of the EU without the payment of customs duties. There are two systems of relief available under the scheme; the suspension system under which the customs duties otherwise payable are suspended at importation and the drawback system under which the customs duties are paid on importation and reclaimed on subsequent export of the processed goods. The operations which can be carried on in respect of such imported goods includes fitting or assembling, adoptions or repairs to other goods.

10.4

PROCESSING UNDER CUSTOM CONTROL

Under the provisions of this scheme, goods originating from outside the EU may be imported into Ireland on the suspension of customs duties for the purpose of undergoing certain types of processing. Unlike the inward processing system, the processed goods do not require to be re-exported outside the EU. Where the products arising from the processing are subsequently put into free circulation in the EU duties are assessed as if the processed product itself had been imported rather than the original goods. This can give an advantage where the rate of customs duties payable on the processed goods is actually lower than on the goods originally imported.

10.5

DEFERRED CUSTOMS PAYMENT

It is possible to defer payment of customs duties in the same way and on the same conditions as one may defer payment of VAT on imported goods (see Section 9).

This article is intended to provide general guidelines. Specialist advice should be sought about specific facts.