If your company earns rental income in Ireland, it’s important to understand how that income is taxed — and what steps you can take to remain compliant and tax-efficient.

Rental income generated by a company falls under corporation tax (CT) rules, and the tax treatment depends on the nature of the rental activity.

Standard Rental Income

For most limited companies earning income from letting residential or commercial properties — such as houses, apartments, offices, or farmland — the standard corporation tax rate of 25% applies.

However, if that rental income is not distributed as a dividend within 18 months of the end of the accounting period, a 20% surcharge may be charged on the undistributed amount (per TCA 1997, s.440). This is a key consideration for company directors and shareholders.

Serviced Lettings

Where a company provides additional services alongside the rental, such as cleaning, linen changes, or other hospitality offerings, the income may be treated differently. If the rental operation qualifies as a trading activity, it may be taxed at the 12.5% corporation tax rate instead.

This distinction can have a significant impact on your company’s tax liability and is worth discussing with a tax adviser to ensure you’re applying the correct classification.

Non-Resident Companies

The rules are slightly different for companies that are not resident in Ireland but earn income from Irish property:

• Prior to 2022, rental income was generally subject to 20% income tax, with tenants required to withhold this tax and pay it directly to Revenue.

• From 1 January 2022 onwards, non-resident companies must register for Irish corporation tax and are taxed at the 25% rate on rental income.

This change aligns non-resident companies more closely with Irish-resident ones in terms of compliance and tax rates.

Allowable Deductions

When calculating taxable rental income, companies can deduct a range of allowable expenses, including:

• Repairs and maintenance

• Property management fees

• Insurance

• Accountancy fees

Claiming these deductions correctly can help reduce the amount of corporation tax owed.

VAT Considerations

Rental income is generally exempt from VAT, but there are exceptions, particularly in the case of certain commercial properties where the property has been opted for VAT. This area can be complex, so professional guidance is often recommended.