Background
1986 Finance Act

Introduced financial incentives to encourage urban renewal and investment by the private sector
The History of the IFSC 10% Corporation Tax Rate IFSC Tax Incentives

The IFSC tax incentive zone was established in 1987 with EU approval to apply a 10% corporate tax rate for companies setting up in the IFSC known as "designated financial services activities". At the time, more than 500 operations were approved to trade under the IFSC programme.

From the end of 2002, this 10% rate ceased to apply to financial services companies, except for those operations that set up before July 1998, which continued until the end of 2005.

Companies which had IFSC certificates fell into two categories

  1. those whose tax certificates ceased to have effect after 31 December 2002 and

  2. those whose tax certificates ceased to have effect after 31 December 2005. Once the IFSC tax certificate ceases to have effect, the company is no longer entitled to claim accelerated tax depreciation allowances.

The special IFSC rate ended in accordance with agreements between Ireland and the EU on state aid rules. The 12.5% was still below the corporation tax rate of many of Ireland's European competitors; although several new EU countries from eastern and central Europe have also slashed their corporation tax rates to emulate Ireland's achievements in attracting foreign direct investment.