Contributed By Matheson LLP
The judicial system in Ireland is established by the Constitution of Ireland, the principal courts being the District Courts and Circuit Courts (with limited jurisdiction), the High Court (with unlimited jurisdiction in civil and criminal matters), the Court of Appeal (with appellate jurisdiction) and the Supreme Court (which usually exercises final appellate jurisdiction only). The judiciary is independent of the legislature and the executive.
Ireland is a member state of the EU and the United Nations. The Irish legal system is similar in many respects to that of the UK and the US. Irish law is based upon the common law, statute and the Constitution. The EU also represents an important source of Irish law, and decisions of the Court of Justice of the European Union (CJEU) exercise significant influence over Irish law.
Ireland is the only EU common law jurisdiction, making it an attractive jurisdiction in which to establish operations and litigate international commercial disputes. Other factors, such as the ease of doing business and the fact that it is the only eurozone country in which English is the main language spoken, make Ireland one of the best destinations for foreign direct investment.
The FDI Screening Regulation
The EU Investment Screening Regulation (Regulation (EU) 2019/452, the “FDI Screening Regulation‟) became effective in October 2020. The FDI Screening Regulation sets out rules which enable scrutiny of investment ventures pursued within the EU by third countries.
Individual member states retain discretion as to whether they implement a screening system, but any such system must then meet basic criteria concerning confidentiality, transparency and the application of review timeframes.
The Screening of Third Countries Transactions Bill
The Department published the Screening of Third Country Transactions Bill (“Screening Bill”) in August 2022. The Screening Bill provides for a new foreign investment or FDI screening regime, as mandated by the FDI Screening Regulation.
The regime provided for in the Screening Bill is suspensory (with criminal sanctions), involves very low thresholds, covers a wide variety of sectors and needs to be considered in parallel with merger control rules.
Under the Screening Bill, a new mandatory notification to the Minister for Enterprise, Trade and Employment (the “Minister”) would be required for certain transactions that involve third-country or foreign-controlled undertakings that are parties to a transaction if the following conditions are met:
A failure to correctly notify the Minister would be a criminal offence and parties could be liable to (a) on summary conviction, a fine of up to EUR2,500 and/or six months’ imprisonment or (b) on conviction on indictment, a fine of up to EUR4 million and/or five years’ imprisonment.
Irish authorities currently impose no specific commitments on foreign investors in relation to their investments.
The parties to a transaction may appeal a screening decision to an adjudicator within 30 days. Adjudicators’ decisions may be appealed further within 30 days to the High Court on points of law only. Such appeals proceedings would not be held in public due to the sensitivity of issues involved.
The Companies Act 2014 (the “Companies Act”) provides for the creation of various types of corporate vehicles in Ireland. A company of any type may be incorporated with a single shareholder.
Company Limited by Shares (LTD)
The LTD is the model form of private company limited by shares and the most common form of corporate vehicle used by foreign investors. The LTD has the same unlimited legal capacity as an individual. It has a one-document constitution, and its internal regulations may be set out in simplified form in that constitution. An LTD is prohibited from offering securities (equity or debt) to the public.
Designated Activity Company (DAC)
The DAC is an alternative form of private limited company. A key distinction between a DAC and an LTD is the existence of an objects clause in the DAC constitution. A DAC may be a suitable vehicle where an objects clause is needed (eg, to restrict the corporate capacity of a joint-venture vehicle) or for companies listing debt securities on a stock exchange.
The Companies Act recognises three distinct types of unlimited company:
Members of an unlimited company may be held liable on an unlimited basis for the debts of the company in the event of it entering insolvent liquidation. ULCs may not offer for sale or list any new securities, but a PUC and PULC may list debt securities.
Public Limited Company (PLC)
The key distinction between PLCs and private companies is that only PLCs may list their shares on a stock exchange and offer them to the public. PLCs must have a minimum issued share capital of EUR25,000. A Societas Europaea (SE), the European model company, is regarded as a PLC under the Companies Act.
Guarantee Company (CLG)
A CLG does not have a share capital and is a popular type of company for charities, sports and social clubs, and property management companies. The members’ liability is limited to such amount as they undertake in the constitution of the company to contribute to the assets of the CLG in the event of its winding-up.
To incorporate a company in Ireland, certain documents, including the company’s constitution, must be filed with the Companies Registration Office (CRO). Incorporation papers must contain the company name, registered office, directors’ and secretary’s details, subscriber details, the company’s principal activity and the place in Ireland where it proposes to carry on that activity. The incorporation form includes a declaration that the requirements of the Companies Act have been complied with.
Under an express incorporation scheme, a company can be incorporated within five working days. Otherwise, it may take two to three weeks to incorporate a company. On incorporation, the CRO will issue the company a certificate of incorporation. CRO fees are EUR50, and the process is completed online.
Documents Presented at the AGM
Irish companies must generally present audited financial statements to the annual general meeting (AGM) and then publicly file a copy with the company′s annual return in the CRO (including certain disclosures concerning directors’ remuneration). A directors′ report on the state of affairs of the company and its subsidiaries must be attached to the balance sheet presented before the AGM. For all LTDs and other company types with one member (other than PLCs), a written procedure is available in place of an AGM. Small and micro companies are subject to fewer public disclosures and more relaxed reporting requirements.
Directors′ Additional Disclosures
Directors may need to make additional disclosures to the company if, for example, they hold shares representing more than 1% of the company’s share capital. Directors of companies with assets exceeding EUR12.5 million and a turnover exceeding EUR25 million must also make a prescribed form of compliance statement in their directors’ report.
Internal Register on Ultimate Beneficial Owner
Most Irish companies must maintain internal registers on individuals considered under law to be their ultimate beneficial owners. The EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 also require in-scope entities to file their beneficial ownership details on a central beneficial ownership register to which there is currently limited public access. Where the company has no beneficial owner or the beneficial owner cannot be identified, details of the company’s senior managing officials (directors) must instead be provided.
Filings in Regard to Changes
CRO filings must be made in respect of changes in the following:
Details of mortgages or charges made regarding a company must also be filed with the CRO.
Irish companies are managed by a single-tier board of directors. All companies, other than LTDs, must have a minimum of two directors. The secretary may be one of the directors of the company. An LTD may have one director but there must be a separate company secretary in that case. A body corporate may act as secretary to another company, but not to itself. A body corporate may not act as a director.
At least one of the directors of an Irish company must be a resident of a member state of the European Economic Area (EEA) unless:
Directors’ common law fiduciary duties are codified in the Companies Act and include the duty to:
Where a breach of duty by a director is proved, they may be required to account to the company for any personal gain made and indemnify the company for any loss or damage resulting from the breach. Generally, parent companies are not liable for the acts of limited liability subsidiaries, but they may be liable under parent company guarantees.
Directors′ duties are owed (to varying degrees) to the company, the shareholders, the company’s employees, the company’s creditors and any appointing shareholder. Directors may be found criminally liable for certain breaches of the Companies Act and other offences in environmental, data protection, health and safety, and tax law.
Subject to certain limitations in the Companies Act, a company is permitted, however, to indemnify a director in respect of liability incurred in defending proceedings, whether civil or criminal, in which judgment is given in the director’s favour or the director is acquitted, or where the High Court, in an application for relief, declares that the director has acted reasonably and honestly. In practice, the directors of Irish subsidiaries of multinational companies benefit from group-wide D&O insurance policies.
Employment protection laws in Ireland apply to all employees working in Ireland, irrespective of the employee’s nationality.
Employment law is primarily governed by:
The primary legislation regulating employment relationships includes:
The Employment (Miscellaneous Provisions) Act 2018
Under the Employment (Miscellaneous Provisions) Act 2018 and updated by the European Union (Transparent and Predictable Working Conditions) Regulations 2022, employers must notify employees in writing, within five days of commencement of employment, of the following core terms of employment:
The Terms of Employment (Information) Act 1994
Under the Terms of Employment (Information) Act 1994, all employers are obliged, within one month of commencement of employment, to provide their employees with a written statement setting out certain fundamental terms of their employment, such as pay intervals, paid leave (including annual leave and sick pay entitlement), pension and pension schemes, notice requirements, details of any collective agreements, any training to be provided, the identity of the recipient agency for social security contributions and any protection relating to social security arrangements. In addition to the above, if the work pattern is entirely or mostly unpredictable, the employer must provide the employee with information about the number of guaranteed hours, the hours and days the employee may be required to work and the minimum notice of a work assignment. For temporary agency contracts, the employer must also provide the identity of the person or firm hiring the agency worker. The statement must be signed by both the employee and the employer. Any change to the statutory particulars must be notified to the employee, in writing, no later than the day on which the change takes effect.
An employer may not permit any employee to work for more than an average of 48 hours per week over a particular reference period (usually four months). This reference period varies depending on the type of employment in question. Working time should only take account of time spent working (ie, it should exclude rest and meal breaks).
Employees cannot opt out of the 48-hour average working week. However, there is a particular exemption for senior or specialist employees, who can determine their own working time, such that they are not subject to the restriction. The contracts of such employees should expressly provide that they are exempt from the 48-hour average working week.
Generally speaking, there is no statutory entitlement to overtime under Irish law or payment for overtime. Employees will only be entitled to overtime pay if such an entitlement is contained in their employment contract or established by custom and practice in the employment concerned. However, employers that require employees to work on Sundays are required to compensate them for doing so, whether in terms of paying a “Sunday premium‟ or specifically considering that they may be required to work on a Sunday in calculating the rate of pay.
An employer can, under common law, terminate an employment contract without cause, provided this is in accordance with the terms of the contract. Notwithstanding any express contractual right to terminate, employees are afforded statutory protection against unfair or discriminatory dismissal. Under the Unfair Dismissals Acts 1977–2015 (UDA), an employer cannot lawfully dismiss an employee unless substantial grounds exist to justify termination. Also, an employer must be able to establish that fair procedures have been followed before effecting the dismissal. Subject to certain exceptions, employees must have at least 12 months’ continuous service to qualify for protection under the UDA.
Generally, a dismissal will only be justified if it is based on one of the following grounds:
If one of the above cannot be established, there must be other substantial grounds to justify the dismissal.
Ending a Contract of Employment
Where an employee or an employer wishes to end a contract of employment, minimum periods of notice apply where an employee has been in continuous service for at least 13 weeks. The notice period to be given by an employer depends on the employee′s length of service. It varies from one week, applicable where an employee has been employed for up to two years, to eight weeks′ notice, applicable where an employee has been employed for 15 years and upwards. Employees, on the other hand, are only obliged to give notice of one week, irrespective of their length of service. These are, however, only the minimum periods. A contract of employment may specify a longer notice period on either side, and it generally does, with notice periods typically ranging from one to six months depending on the seniority of the role. There is no requirement to pay an employee severance in the event of dismissal unless it arises because of redundancy.
The Protection of Employment Acts 1977 to 2015 (PEA) prescribe the procedures to be followed in a collective redundancy. Employers are obliged to initiate consultation at the earliest opportunity and, in any event, at least 30 days before the first notice of dismissal is given. Where an employer effects collective redundancies, the employer must, with a view to reaching an agreement, initiate consultation with employee representatives in relation to matters such as the possibility of avoiding or reducing the proposed redundancies and the basis on which it will be decided which particular employees will be made redundant.
The PEA require employers to provide employee representatives and the Minister for Social Protection with certain written information, such as the proposed number of redundancies and a description of the employees the employer proposes to make redundant. The minister must also be notified of the proposals at least 30 days before the first notice of redundancy is given.
Statutory redundancy pay
Statutory redundancy pay is currently two weeks’ pay for each year of service, plus one extra week’s pay. A week’s pay for these purposes is currently subject to a ceiling of EUR600 a week. For both ordinary dismissals and collective redundancies, it is commonplace for employers to offer employees an ex gratia payment upon termination of employment in exchange for the employees signing a compromise agreement that waives all employment law claims against the employer.
The concept of employee representation under Irish law relates to both unionised and non-unionised employees and is derived from a number of sources, both statutory and otherwise.
Trade Union Representation
Any employee has the right to join a trade union, although trade unions may not legally compel employers to recognise and negotiate with them. The degree to which trade unions may embark upon industrial action is regulated principally by the Industrial Relations Act 1990. Employee representatives are appointed by way of a secret ballot.
Information and Consultation Representation
In addition to any local representation arrangements (whether with trade unions or otherwise), employees may be entitled to representation in certain circumstances as a matter of statute. This form of representation can arise in transfers of undertakings, in collective redundancy situations or where the employees are covered by a local or European-level works council.
The Transnational Information and Consultation of Employees Act 1996 (as amended) (the “1996 Act‟) requires undertakings with at least 1,000 employees in the EU and 150 or more employees in each of at least two member states to set up European works councils to inform and consult with their employees on a range of management issues relating to transnational developments within the organisation. Under the 1996 Act, a special negotiating body (SNB) is established to negotiate with the employer. The duration and functions of the SNB will be subject to the terms and purpose of the works council agreement put in place.
The Employees (Provision of Information and Consultation) Act 2006 obliges employers with at least 50 employees to enter into a written agreement with employees or their elected representatives setting down formal procedures for informing and consulting with them. The legislation will only apply if a prescribed minimum number of employees request it. The legislation is silent on how employee representatives are elected, and it will be up to the employees to determine how this is conducted, but usually, it is by way of a secret ballot.
The primary Irish taxes applicable to employees and employers in the context of an employment relationship are income tax, pay-related social insurance (PRSI) and the universal social charge (USC).
Irish tax law generally imposes income tax on an individual where they are resident or ordinarily resident in Ireland in the year of assessment or if employment is exercised in Ireland in the year of assessment.
An individual will be considered resident in Ireland in a year of assessment if they are present in Ireland for at least 183 or 280 days in that year and the preceding year when taken together (provided that the individual has been present for at least 30 days in each of these two years). An individual will be regarded as ordinarily resident in Ireland for tax purposes if the person has been resident in Ireland for three consecutive years immediately preceding the year of assessment.
Different income tax rate bands apply depending on an employee’s circumstances. The current standard rate of income tax is 20%, which applies to the first EUR40,000 per year earned by a single person without children and to the first EUR49,000 per year earned by a married person or a person in a civil partnership. A higher 40% rate is applied to any remaining balance.
PRSI is Ireland’s equivalent of social insurance or social security contributions. Subject to certain limited exceptions, anyone employed in Ireland is generally subject to PRSI and payments are generally collected by the employer through the PAYE system. The amount of PRSI paid by an employee depends on the employee’s income and the PRSI class of the employee.
The most common PRSI class for private sector employees in Ireland is Class A (employees in industrial, commercial and service-type employment with gross earnings of EUR38 or more in a week). A Class A employee’s PRSI contribution will generally be 4% of all “reckonable earnings‟ (including employee share-based remuneration and any benefit in kind). Separately, the employer must also make an employer’s PRSI contribution of 8.8% on weekly earnings up to EUR441 and 11.05% on weekly earnings over EUR441.
Employees in Ireland are also subject to a further tax payable on total income, known as USC. For 2023, the first EUR12,012 of an individual’s aggregate annual income will be taxed at a rate of 0.5%, the following EUR10,908 at 2%, the following EUR47,124 at 4.5% and the remaining balance at 8%. An additional surcharge of 3% applied to individuals whose non-employment-related income exceeds EUR100,000 in a year.
The primary Irish taxes applicable to businesses are corporation tax on income and chargeable gains, VAT, withholding tax and stamp duty.
A company resident in Ireland for Irish tax purposes will be subject to corporation tax on its worldwide profits and gains regardless of where those profits arise. A company that is not tax resident in Ireland is liable to corporation tax in Ireland if it carries on a trade in Ireland through a branch or agency.
A non-Irish tax resident company may be subject to corporation tax on gains realised on the disposal of Irish-situated assets used for such a trade carried on in Ireland or realised on the disposal of certain specified Irish assets, including Irish land or buildings or shares in a company that derive the greater part of their value from Irish land or buildings. Also, in circumstances where a non-Irish tax resident entity sells Irish patent rights in return for a capital sum, a charge to Irish tax can arise at a rate of 25%.
A company will generally be considered tax resident in Ireland if it is centrally managed and controlled in Ireland, regardless of where it is incorporated. If a company is incorporated in Ireland, the general rule is that the company will be Irish tax resident unless it is tax resident in another country under the terms of a double-tax treaty.
The rate of corporation tax payable on a company’s profits will depend on whether the profits arise from trading (broadly, operational activities) or non-trading (eg, passive investment) activities. A low rate of 12.5% applies to trading profits, with a 25% rate applying to non-trading income. The question of whether a company is carrying on a trade is primarily one of fact to be decided on a case-by-case basis, though Irish Revenue is willing to provide an opinion as to whether a particular activity constitutes the carrying on of a trade in certain circumstances.
Ireland intends to implement the OECD’s Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy in line with the EU implementing Directive, including proposals for a global minimum tax rate of 15% for multinationals with annual revenue over EUR750 million. The Directive obliges EU member states, including Ireland, to transpose its provisions into domestic legislation by 31 December 2023. It is planned to deliver this legislation in Ireland as part of the autumn 2023 Finance Bill.
Losses incurred by a company in respect of trading operations can generally be carried forward indefinitely for use against future profits of that trade. Losses can also be surrendered to other companies within a group for Irish corporation tax purposes.
Chargeable gains realised by an Irish tax resident company on the disposal of a capital asset are generally subject to corporation tax at an effective rate of 33%, where relief or exemptions are not available. A non-Irish resident company will be subject to corporation tax in a similar manner on gains realised on the disposal of specified Irish assets (broadly, Irish branch assets and Irish land and buildings, Irish minerals and exploration rights, or shares deriving their value from such assets or Irish branch assets).
Supplies of goods and services in Ireland are generally subject to VAT. The standard rate of VAT in Ireland is 23%. Reduced rates ranging from 0% to 13.5% may apply to supplies of certain specified goods and services, and full exemptions apply to certain goods or services. A business engaged in an activity subject to VAT should typically be entitled to recover the VAT it incurs on purchases, subject to certain exceptions.
The obligation to account for VAT on supplies made by a company may arise for the supplier or customer, depending on the relevant circumstances, such as whether the supply involves a cross-border element. Businesses are generally obliged to register for VAT in Ireland.
Ireland imposes withholding tax on payments of distributions and dividends by Irish-resident companies at a rate of 25% and payments of interest, patent royalties and certain annual payments at 20%. However, there are broad exemptions from these withholding requirements. As a result, withholding tax will generally not arise on payments made to persons resident in another EU member state or in a jurisdiction with which Ireland has agreed on a double tax treaty.
Irish stamp duty applies to certain documents that transfer property and are executed in Ireland, relate to property situated in Ireland (such as Irish real estate or shares in Irish companies), or relate to a matter or thing done or to be done in Ireland.
That noted, there are various exemptions and reliefs from Irish stamp duty, including an exemption for transfers of certain IP rights and broad reliefs for intra-group transfers and group reorganisations and mergers. Where an exemption is not available, stamp duty generally applies at a rate of 1% to transfers of shares and 7.5% for transfers of commercial property.
There are a number of tax credits and incentives available in Ireland, including research and development tax credits and capital allowances for capital expenditure incurred to acquire certain intellectual property. In Finance Act 2022, a new digital games tax credit was introduced to incentivise developers to produce digital games that contribute to the promotion and expression of Irish and European culture. The credit is available on expenditure incurred in the design, production and testing stages of the development of qualifying digital games, provided certain conditions are satisfied, including that the qualifying expenditure is not less than EUR100,000.
Research and Development Tax Credit
Irish tax legislation provides a tax credit regarding certain expenditures on research and development activities, buildings and plant and machinery. Credit is available for 25% of the allowable expenditure (in addition to a general tax deduction at 12.5%).
A number of conditions must be satisfied for the credit to be available, including a requirement that the research and development seeks to achieve scientific or technological advancement and involves the resolution of scientific or technological uncertainty.
Finance Act 2022 made changes to the R&D tax credit to ensure it remains best in class and is regarded as a “qualifying refundable tax credit” under the OECD’s Pillar Two reforms.
Capital Allowances Regime for Capital Expenditure on the Provision of Certain Intellectual Property
A special capital allowances (tax depreciation) regime is available for capital expenditure incurred to acquire certain categories of intellectual property (known as “specified intangible assets‟) for a company’s trade. Specified intangible assets for these purposes include patents, trade marks, brands, copyrights or computer software, among other categories of IP.
Capital allowances on qualifying expenditure may either be claimed in accordance with amortisation charged to the profit-and-loss account of the company or on a straight-line basis over 15 years at the rate of 7% for the first 14 years and 2% in the final year. Capital allowances are available to offset taxable profits earned from the specified intangible assets subject to an 80% cap.
Revenue will expect a robust valuation report to support the arm’s length nature of the capital expenditure, and taxpayers must maintain documentation and records used to prepare the intellectual property valuation.
Tax consolidation is not available under Irish tax law, and a company subject to corporation tax must prepare and file its tax return for corporation tax purposes for each assessment period. However, Irish tax law does provide for group relief, which permits companies within the same corporate group to surrender certain losses to other profitable group companies.
Ireland does not have any specific thin capitalisation rules, but there are a number of circumstances where interest payments may be considered non-deductible in calculating the taxable profits of a company.
For instance, interest paid by a company may be recharacterised as a non-deductible distribution where interest is paid for securities that are convertible into shares, where interest is dependent on the company’s results, or where it represents more than a reasonable commercial rate.
Ireland introduced anti-hybrid rules from 1 January 2020, in accordance with the EU Anti-Tax Avoidance Directive (ATAD), which can deny tax deductions in respect of certain arrangements between associated enterprises, giving rise to tax mismatches as a result of hybrid instruments or entities. In addition, Ireland introduced anti-reverse-hybrid rules from 1 January 2022 that apply to treat certain transparent Irish entities as subject to tax.
Ireland implemented interest limitation rules in accordance with EU ATAD with effect for accounting periods commencing on or after 1 January 2022. These rules apply to cap deductions for interest at 30% of earnings before interest, taxes, depreciation and amortisation (EBITDA) in certain circumstances.
Irish transfer pricing rules apply the arm’s length principle to trading transactions between associated enterprises. In this context, “arm’s length‟ is to be construed in accordance with OECD guidelines. The Irish transfer pricing rules were significantly amended from 1 January 2020 to align with the 2017 OECD guidelines, including enhanced documentation requirements. Finance Act 2022 ensured that, in line with international developments, Ireland’s transfer pricing rules are to be construed in accordance with the 2022 version of the OECD guidelines.
Broadly, Ireland’s transfer pricing rules require that if the actual consideration payable or receivable by a trader in a transaction with an associated enterprise is other than at arm’s length, then any understatement in the trader’s profit will be reversed so that the full arm’s length profit of the trader will be taxed.
The Irish rules were updated from 1 January 2020 to apply to non-trading transactions (save for certain non-trading transactions between two Irish residents) in addition to trading transactions. Furthermore, the Irish transfer pricing rules can now also apply to capital transactions where the market value of the asset exceeds EUR25 million.
Ireland has strict anti-evasion rules that impose criminal sanctions on those who fraudulently evade tax and anyone who facilitates such evasion. Anyone found guilty of an offence may be fined and/or imprisoned.
Ireland also has a general anti-avoidance rule that applies in respect of tax-avoidance transactions. Broadly, a tax-avoidance transaction in this context is a transaction which gives rise to a tax advantage and is undertaken primarily to claim a tax advantage and not for bona fide commercial reasons. In such cases, Revenue may deny or withdraw the relevant tax advantage. In determining whether a transaction is a tax-avoidance transaction, regard will be given to:
As such, genuine commercial arrangements undertaken with a view to making a profit should generally not be subject to the general anti-avoidance rule.
Ireland introduced an ATAD-compliant exit tax in October 2018. The exit tax is charged at a rate of 12.5% and applies to unrealised capital gains inherent in assets where:
The exit charge does not apply to assets that remain within the Irish tax charge. A higher 33% exit charge can apply where the transaction forms part of an arrangement to subsequently dispose of the relevant assets.
Where the relevant company/assets have been migrated to an EU/EEA country, the exit charge may be deferred and, in such circumstances, is payable in instalments over five years. If the exit charge is unpaid, Revenue may pursue any other Irish-resident group company or a director who has a controlling interest in the company subject to the charge.
The Irish merger control regime applies to “any merger or acquisition‟ defined by Section 16(1) of the Competition Acts 2002 to 2017 (the “Act‟), as amended, including transactions where:
Mergers and acquisitions that meet the turnover thresholds set out in Section 18(1) of the Act are subject to mandatory notification to the CCPC, where, for the most recent financial year:
The Simplified Merger Notification Procedure can be used for transactions that meet the financial thresholds for notifications but pose no risk of substantial lessening of competition in Ireland, for example, where there is no horizontal or vertical overlap between the undertakings involved, where the combined market shares are less than 15% in cases of horizontal overlap and 25% in cases of vertical overlap, or where there is a change from joint to sole control in a pre-existing joint venture.
Where these requirements are not met, mergers may still be notified to the CCPC on a voluntary basis under Section 18(3) of the Act. The CCPC can also investigate mergers falling below the turnover thresholds, where they believe the merger could have as its object or effect the prevention, restriction or distortion of competition or involves the creation or strengthening of a dominant position.
Only full-function joint ventures (ie, those which perform, on a lasting basis, all the functions of an autonomous economic entity) constitute a merger for the purposes of the Irish merger control regime. The CCPC, which is primarily responsible for the enforcement of the Irish merger control regime, adopts an approach mostly consistent with the European Commission in identifying whether joint ventures are subject to Irish merger control law.
Where a joint venture does not qualify as full-function, the CCPC may assess it under Section 4 of the Act, based on Article 101 of the Treaty on the Functioning of the European Union (TFEU). Typically, the CCPC will have regard to the European Commission’s Guidelines on Horizontal Cooperation Agreements and the Guidelines on Vertical Restraints when undertaking such an assessment.
A filing must be submitted to the CCPC prior to implementing the merger and may be made as long as the undertakings involved demonstrate a good-faith intention to conclude an agreement.
A Phase I clearance determination must be issued by the CCPC within 30 working days of the “appropriate date‟, which means the date on which a complete filing by the merging parties is made unless either the CCPC has used its power to “stop and restart the clock‟ by issuing a formal requirement for information (RFI). This has the effect of resetting the clock and only restarting it when the RFI is complied with or when the parties and the CCPC commence negotiating remedies, in which case, the Phase I period is extended to 45 working days. The CCPC also issues “informal‟ requests for information that do not stop and restart the clock.
A Phase II clearance determination must be issued by the CCPC within 120 working days of the appropriate date. If the CCPC issues a formal RFI in the first 30 working days of the Phase II period, this has the effect of stopping and restarting the clock in the same way as in Phase I. If the parties and the CCPC are negotiating remedies, the Phase II period is extended to 135 working days.
Obligations and Failure to Notify
A suspensory obligation is included in the Act. Section 19(1) of the Act imposes a prohibition on the merging parties putting a merger that has been notified (both mandatorily and voluntarily) into effect prior to the issue of a clearance determination.
Under Sections 18(9) and 18(10) of the Act, failure to notify a merger that meets the turnover thresholds is a criminal offence punishable by fines of up to EUR250,000, plus EUR25,000 per day for a continued breach. The CCPC cannot impose administrative fines but must refer the matter to the Director for Public Prosecutions to initiate either summary prosecution or prosecution on indictment.
Anti-competitive agreements and practices are prohibited under Section 4 of the Act based on Article 101 of the TFEU. Section 4 prohibits agreements, decisions and/or concerted practices that have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in Ireland or any part of Ireland. The Act applies to businesses operating in Ireland and international businesses where an agreement is found to restrict competition in Ireland.
Section 4 sets out a non-exhaustive list of agreements that are prohibited, such as those that:
Section 6 of the Act makes it a criminal offence to enter into or implement an agreement, decision or concerted practice prohibited under Section 4. The CCPC operates a Cartel Immunity Programme with the Director of Public Prosecutions, which provides for the possibility of immunity from prosecution for the first company/business to come forward to report a cartel.
Abuse of a dominant position is prohibited by Section 5 of the Act and Article 102 of the TFEU. Section 5 of the Act mirrors Article 102 of the TFEU, except that it refers to the abuse of a dominant position in trade for any goods or services in Ireland or any part of Ireland. While the Act refers to trade in goods and services in the state, its provisions are also likely to apply to international businesses/trade that are/is found to be dominant and where there is an effect on trade in Ireland.
Definition of Dominance
There is no definition of dominance within the Act. The Irish courts and the CCPC have adopted the definition formulated by the CJEU in case 27/76, United Brands v Commission  ECR 207: “[a] position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers‟.
Section 5(2)(a) – (d) of the Act also sets out several examples of which such abuse of dominance may consist, which are:
As in the case of cartels, the Act makes abuse of a dominant position a criminal offence that can be prosecuted before the Irish courts and is punishable by financial penalties. The Act also includes specific provisions for aggrieved persons and the CCPC to take civil proceedings before the Irish courts seeking remedies for abuse of a dominant position. The remedies available in civil proceedings include a court declaration, damages, imposing structural measures and an injunction.
Any inventive product/process is patentable under Irish law if it:
Certain inventions are specifically excluded under Irish law, including a discovery or scientific theory, computer programs and methods of doing business.
Length of Protection
Patent protection lasts for up to 20 years from the date of the application, subject to the payment of renewal fees. Irish law also provides for the extension of full-term patents for pharmaceuticals for human or animal use for up to five years.
Irish law also provides for short-term patents, which have a ten-year duration. The test of inventiveness for a short-term patent is lower than for a full-term patent. Short-term patents may be converted to full-term patents where they meet the requirements for a full-term patent.
Applications for Irish patents are filed at the Intellectual Property Office of Ireland (IPOI). The specification forming part of the application must include the title of the invention, description of the invention and claim or claims and drawings, if any, referred to in the description.
It is also possible to file a patent application at the European Patent Office (EPO) under the European Patent Convention (EPC) or at the World Intellectual Property Organisation (WIPO) under the Patent Cooperation Treaty (PCT) and to designate Ireland for patent protection. The EPC and the PCT both facilitate the application for patents in a number of jurisdictions, but these are effectively a bundle of applications to a number of states.
Enforcement and Remedies
Patents in Ireland are enforced through civil claims against infringing parties. A patent owner can prevent direct or indirect use of their invention by third parties in Ireland without consent.
The courts have a wide range of civil remedies available to them to compensate aggrieved owners. These include a declaration of the validity of a patent and that it has been infringed, damages for infringement, injunctive relief and orders to account for profits, and to seize, destroy and/or hand over infringing goods to the patent holder.
A trade mark under Irish law is any sign capable of both:
A trade mark may consist of words (including personal names), designs, letters, numerals or the shape of goods or their packaging.
Unregistered trade marks have a limited protection in Ireland through the law of passing off, in a manner similar to that applying in other common law jurisdictions.
Length of Protection
Registered trade marks (be they national Irish marks, Madrid Protocol marks or EU trade marks) are registered initially for ten years but, uniquely among intellectual property rights, this term can be renewed indefinitely for successive ten-year terms on payment of a renewal fee.
A trade mark registration will only remain valid to the extent that the mark is used by the owner in respect of the goods/services for which it was registered.
There are three options open to trade mark proprietors carrying on business in Ireland.
An application for an Irish trade mark at the IPOI
An IPOI examiner scrutinises the application to ensure that it can be considered a trade mark under Irish law and generally examines the application to see if its use would infringe pre-existing Irish/EU trade marks or if it otherwise falls within a prohibited form of trade mark. If satisfied with the application, the IPOI publishes it in the Official Journal. Third parties then have three months to oppose the application by filing a Notice of Opposition.
If there is no opposition, the application will proceed to registration on payment of the registration fee.
An application for an EU trade mark at the European Union Intellectual Property Office (EUIPO)
EU trade marks are filed with the EUIPO and undergo an examination, publication and opposition procedure prior to registration, similar to that described for Irish trade marks above. An EU trade mark is a unitary European-wide property right and protects the trade mark proprietor in all member states of the EU.
An international application designating certain states, including Ireland, under the Madrid Protocol
On request, the IPOI will forward a trade mark application or registration to the International Bureau of the WIPO in Geneva. The Irish trade mark application or registration serves as a base on which the proprietor may designate the mark for registration in other Madrid Protocol countries, eg, the UK and the US. The International Bureau notifies the trade mark offices designated in the international filing, which, in turn, decide whether to accept the application for registration in their territory.
A Madrid Protocol filing can be a cost-effective and efficient way to obtain trade mark protection in multiple jurisdictions.
Enforcement and Remedies
An infringement will occur where a mark that is the same as or similar to a registered mark is used in relation to the same or similar goods or services as the registered mark. Where the mark used by a third party is not identical to the registered trade mark, the proprietor needs to show that there is a likelihood of confusion on the part of the public.
The reliefs available for trade mark infringement include damages, injunctions and orders for an account of profits, and the destruction or delivering up of infringing goods.
An unregistered trade mark can be enforced through the vehicle of “passing off‟. To succeed in an action for passing off, the plaintiff must show that the defendant made a misrepresentation in the course of trade to prospective customers calculated to injure the business or goodwill of the plaintiff and that caused or was likely to cause the plaintiff damage.
Under Irish law, a “design” is defined as the appearance of the whole or part of a product resulting from the features of a product or its ornamentation, including the lines, contours, colour, shape, texture or materials of the product itself or its ornamentation. In order to be registerable, a design must be “new‟ and have “individual character‟. Unregistered designs are also granted a level of protection under Irish law.
Length of Protection
The total term of protection for designs under Irish law is 25 years, renewable at five-year intervals.
An unregistered design exists for three years from the date the design is first made available to the public within the EU, where the disclosure could reasonably have become known to those in the sector concerned, operating within the EU.
Designs are registered with the IPOI. An application for a Registered Community Design is made with the EUIPO.
Enforcement and Remedies
The reliefs available for industrial design infringement include damages, injunctions and orders for an account of profits.
An unregistered design does not confer a monopoly, unlike a registered design, and infringement can take place only if copying can be established.
Copyright is an intellectual property right which features mainly in but is not exclusive to the cultural, arts and information technology sectors. It is the legal form of protection used by the creators or authors of such works to protect the tangible form of all or part of their individual works. Irish law specifically recognises copyright in computer software as a literary work.
Length of Protection
The duration of copyright protection varies according to the format of the work.
There are some exceptions under Irish law which reflect instances where the wider public interest, or the interests of particular groups, make it necessary to restrict or limit the rights granted to copyright owners.
There are no registration formalities in Ireland for obtaining copyright protection. Copyright arises automatically on the creation of an original work.
Enforcement and Remedies
Copyright in Ireland is enforced by way of both civil and criminal liability. Copyright holders may bring actions for damages, injunctive relief, orders to “search and seize‟, and orders for an account of profits. Infringements that may occur include:
The district court and the circuit court now have jurisdiction to determine intellectual property claims, including claims in relation to copyright infringement.
Irish law provides protection for both original databases and “non-original‟ databases where substantial investment has been incurred in obtaining, verifying, or presenting the contents of the database. Original databases are those in which the contents constitute the original intellectual content of the author. The protections for databases under Irish law prevent the unlawful extraction or re-utilisation of a substantial part of the database.
Where a copyrighted work is included in a database, copyright shall continue in that work and the separate database protections.
The protection of databases under Irish law expires 15 years from the end of the calendar year in which the making of the database was completed.
Irish law provides for the protection of trade secrets. Trade secret protection is afforded without registration and can last without limitation in time, generally as long as confidentiality is maintained. In order for something to qualify as a trade secret, it must satisfy three requirements:
Where a trade secret is unlawfully used, various remedies under Irish law, including injunctions, corrective measures such as recall or destruction of infringing goods and damages, are available to protect the trade secret owner. A person who contravenes or fails to comply with court orders commits an offence and is liable to a fine and/or imprisonment for up to six months.
The EU (Protection of Trade Secrets) Regulations 2018 gave effect to the EU Trade Secrets Directive and came into force on 9 June 2018 by way of statutory instrument number 188/2018. The Regulations provide civil remedies in circumstances where a trade secret is unlawfully used and allow for measures limiting access to court hearings and documents to ensure the confidentiality of trade secrets in court proceedings, including making it a criminal offence to contravene such measures.
Principal Data Protection Laws
The principal data protection legislation in Ireland is Regulation (EU) 2016/679 (the General Data Protection Regulation or GDPR), as supplemented by the Irish Data Protection Acts 1988 to 2018 (DPA).
Irish law-specific nuances, as permitted or required under the GDPR, are set out in the DPA. These include, eg, restrictions on processing personal data relating to criminal convictions and offences, the setting of the so-called digital age of consent, certain narrow derogations from data subject rights, and the administrative powers and procedures of the local supervisory authority, the Data Protection Commission.
The GDPR has general application to the processing of personal data in the EU, setting out extensive obligations on controllers and processors and providing strengthened protections for data subjects. The GDPR carries the potential for large fines of up to 4% of a firm’s worldwide annual turnover from the preceding financial year, or EUR20 million (whichever is higher).
In May 2023, the CJEU judgment of UI v Osterreichische Post AG (Case C-300/21) confirmed that a mere infringement of the GDPR does not give rise to the right to compensation in itself but that there must be a breach, some damage and a causal link between the two, as in most negligence cases. Claimants do have to prove damage of some kind in order to recover compensation for non-material loss following a GDPR infringement. The decision does not confirm what proof of non-material damage is required other than there is no threshold of seriousness and further consideration of this question is anticipated by the Irish courts.
Other Relevant Legislation
Social welfare legislation such as the Social Welfare Act 2005 strictly prohibits the use of the Irish Personal Public Services Number (PPSN) for purposes other than dealing with specified government bodies.
The GDPR applies to the processing of personal data by controllers and processors established in the EU (regardless of whether the processing itself takes place in the EU).
The GDPR also applies to controllers and processors not established in the EU, where the organisation’s processing activities involve either the offering of goods or services to data subjects in the EU or the monitoring of the behaviour of data subjects in the EU.
The Irish Data Protection Commission (DPC) is the independent authority responsible for enforcing the GDPR and the DPA in Ireland. The DPC has investigative powers to examine complaints from individuals in relation to potential infringements of data protection law and can order corrective measures where necessary. The DPC has extensive investigative and information-gathering powers.
The DPC co-operates with other European supervisory authorities and will act as the lead supervisory authority in respect of cross-border processing of personal data by organisations that have their main establishments (from a data processing perspective) in Ireland.
There have been a number of recent developments in Irish and EU law, with certain legislative reforms expected in the near future. Some developments of note are summarised below.
The Corporate Sustainability Reporting Directive ((EU) 2022/2464) (CSRD) must be transposed into domestic law by 6 July 2024. Irish transposition measures are currently being formulated. CSRD will require in-scope companies to make ESG-related disclosures against common EU reporting standards. The first set of companies must report in 2025 based on 2024 data. A EU-wide audit requirement for reported sustainability information will apply, initially on a limited basis.
The “Mobility Directive” (Directive (EU) 2019/2121) has been transposed into Irish law by the European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023. These measures amend the previous procedures for EU cross-border mergers and introduce a harmonised EU framework for cross-border conversions and divisions.
In October 2021, the Irish government agreed to join the OECD Statement on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy (the OECD Agreement). The OECD Agreement establishes a new international tax framework, including the introduction of a new global minimum tax rate of 15% for consolidated corporate groups with global annual revenue over EUR750 million.
Following unanimous agreement of all EU member states on the Directive implementing the OECD Agreement, Ireland has committed to transposing the Directive on the new minimum effective tax rate into national law by 31 December 2023. Ireland plans to introduce a “Qualified Domestic Minimum Top Up Tax” and it is expected that the Irish implementing legislation will closely follow the terms of the EU Directive.
Ireland launched a public consultation in March 2023 to request feedback on the draft legislation and certain aspects of implementing the Directive. It is expected that a second feedback process will follow at the end of June 2023 with implementing legislation ultimately being introduced in Finance Act 2023 to have effect for accounting periods commencing on or after 31 December 2023.
The Irish government has confirmed that the existing 12.5% corporation tax rate will continue to apply to multinationals and domestic businesses operating in Ireland that do not exceed the EUR750 million group revenue threshold. As a result, there will be no change in the 12.5% corporation tax rate for the majority of businesses in Ireland which remain outside the scope of the OECD Agreement.
The Competition (Amendment) Act 2022 was signed into law in June 2022 and once commenced, it is expected to revolutionise the Irish competition regime. The Act implements the provisions of Directive 2019/1 (the “ECN+ Directive”), which seeks to harmonise the enforcement of EU competition law across the EU and bolster the enforcement powers of national competition authorities.
Work Life Balance Act 2022
The Work Life Balance and Miscellaneous Provisions Act 2022 was enacted in April 2023. Commencement orders are required to bring new statutory entitlements set out in the Act into force. This legislation introduces a statutory right for employees to request remote working arrangements and the provision of various additional family leave entitlements.
The Employment Permits Bill 2022
The Employment Permits Bill 2022 was introduced in October 2022 and aims to improve and modernise the employment permit system. The proposals include a new type of employment permit for seasonal workers, revision of the labour market needs test, allowing subcontractors to make use of the employment permit system and additional eligibility conditions for certain employment permits to be specified.
EU Pay Transparency Directive
The aim of the Directive is to promote greater pay transparency and fairness in the workplace and to reduce the gender pay gap (GPG) within EU member states. GPG reporting has become a hot topic in recent years across EU member states, and this Directive is a further example of the EU’s commitment to promoting diversity, equity and inclusivity in the workplace. This Directive on pay transparency introduces significant pay transparency obligations on employers to strengthen the application of the principle of equal pay and, separately, significantly enhances GPG reporting obligations which will amend the current GPG reporting requirements in Ireland.
The European Commission issued a proposal for a Regulation on Privacy and Electronic Communications to replace the existing legislative framework in 2017. The aim of the new regulation is to reinforce trust and security in the digital world. This regulation would have direct effect across the EU member states. The most recent draft of this proposal was published in February 2021. The draft proposal provides for ePrivacy rules for all electronic communications including:
The Digital Services Act (DSA) came into force in EU law in November 2022, with the majority of its provisions becoming directly applicable in February 2024. The DSA contains new rules to ensure greater accountability on how online intermediary service providers moderate content, advertise and use algorithmic processes. The DSA imposes additional obligations on very large online platforms (VLOPs) and very large online service engines (VLOSEs) which have 45 million or more average monthly active recipients of the service in the EU. The rules will establish a powerful system of transparency and a clear accountability structure for online platforms, while also fostering growth and competitiveness within the market.
The Digital Markets Act (DMA) entered into force on 1 November 2022 and is applicable as of May 2023. The aim of the DMA is to ensure that large online platforms behave fairly in online environments and that digital markets are contestable by smaller players. The DMA establishes a set of narrowly defined objective criteria for qualifying a large online platform as a “gatekeeper”. Gatekeepers have a number of obligations, which include ensuring that users have the right to unsubscribe from core platform services and to inform the European Commission of mergers and acquisitions (regardless of whether the relevant transaction is mandatorily notifiable).