1st Contract in Ireland

**pmeswani** · 20 March 2012, 14:57

Originally posted by mariof View Post

I was offered a contract in Dublin for a 18 months starting 1st of June (I will become an Irish resident). Im German citizen. I have never contracting neither in UK nor Ireland.
I asked a few accountants in Dublin about ltd company, umbrella and the like.
I got some answers and it looks that setting ltd company with monthly gross income around 8-12k euro will give me only 60% as net. For an umbrella they gave mi simillar figuers.
Is that correct? I'm expecting to have around 70-75% on ltd company.
I also got a proposal to set up an offshore company which gaves around 85% but is that lawful?

Thank you for helping me solving the issue.
Mario

None of us can really advise you on what to do. You have to assess your appetite for risk. You will need to ask yourself if you should contact an Accountant who is Contractor Friendly and has a full understanding of your circumstances as a German National living in Ireland.

If you believe offshoring your accounting responsibilities will not get you caught by the Irish Tax Authorities, then go for it. I can't endorse offshore Accounting, as I am not prepared to take the risk of losing a large stake of income and potentially bankrupt myself.

**mariof** · 20 March 2012, 17:53

Hi pmeswani,
Thank you for that but I'm only asking what net/gross factor should I expect. For UK contractors there is a lot of calculators online and also a lot of articles. But for contracting in Ireland I realy don't know how does it work.
Is anything similar to UK's dividends in Irish ltd company? I found a calculator where setting ltd company in UK gives me at least 70% from gross as net that's why I'm confused seeing 50-60%.

**ShandyDrinker** · 20 March 2012, 23:10

Hi Mario,

Having finished a contract in Dublin at the end of last year I can say that the retention rates you mention in your original email are pretty accurate. I was working through a UK Ltd for 6 months which is allowed in Ireland - officially you need to get a dispensation from the Irish Revenue to do this though and prove that you are paying PAYE, etc in the UK.

More importantly though I did investigate the whole Irish Umbrella solution route and found that the retention rates were shockingly poor, especially considering that contract rates in Dublin are typically quite a lot lower than in the UK for an equivalent role. Typically retention rates using this route are anything up to 60-65% if you are lucky. Even as a LTD in Ireland it looks like you can get around the 70% mark if you claim for every possible allowable expense.

I'd really recommend speaking to an accountant in Ireland as that's the only way you'll get sound advice rather than on an internet forum. If you are there for 18 months, this may be money well spent.

Cheers,

ShandyDrinker

**mariof** · 21 March 2012, 08:46

Hi Shandy,

thx for the answer its very helpful. I got another calculations from an accountant in Dublin were net/gross = 50% both with umbrella and ltd company. So now I have to find a good accountant

.
Do you know If I can withdraw some part of money from Ltd company in Ireland as dividend?

**mariof** · 21 March 2012, 19:30

Ok, I found I can't withdraw any dividends in simillar meaning as in UK. Assuming long term contract (18mth) in which cases can I treat flights germany<>ireland<>germany and an apartment as business expenses?

**ShandyDrinker** · 21 March 2012, 20:14

You've found pretty much what I did regarding dividends in Ireland although I never really got any further than that as I didn't stay in Dublin once the 6 months were up. If you do find a solution please post a reply here as I for one would be curious how other people have done it and what kind of retention they were looking at. I think if you can get 70-75% you're doing well and the contract is probably worthwhile at that point.

**mariof** · 26 March 2012, 21:09

Another idea for example for people from UK.
Set up two companies, one in Irealnd and another one in UK. From Irish Ltd take only small salary (ie. 2-3k euro a month) then pay corporate tax for difference ( Gross income - salary - expenses). Corporate tax is 12.5%.
Then send the profit to UK company as a dividend or something else (but what? ).
In UK you have beeter taxation rules.

Does it make sense?

1st Contract in Ireland