Economy of Ireland

Exports and Imports

Ireland boasts a diverse range of export products, including pharmaceuticals, chemicals, machinery, and computer hardware. Key export partners include the United States, the United Kingdom, and Belgium. In 2023, Ireland's total exports amounted to €163.7 billion. On the import side, Ireland brings in a variety of goods such as machinery, chemicals, and petroleum products, with significant imports originating from the United Kingdom, the United States, and Germany. In the same year, Ireland's total imports reached €89.2 billion.

Infrastructure

Ireland maintains a well-developed infrastructure network, encompassing modern roads, bridges, railways, ports, and airports. Major highways like the M50 motorway facilitate efficient transportation across the country, while ports such as Dublin Port serve as crucial hubs for maritime trade. Additionally, ongoing investments in infrastructure projects ensure continued development and connectivity. As of 2023, Ireland has approximately 5,600 kilometers of national roads and 3,000 bridges.

Balance of Trade

Ireland typically maintains a trade surplus due to its strong export-oriented economy. The value of Irish exports exceeds that of imports, driven by sectors like pharmaceuticals, technology, and agri-food. This surplus contributes positively to Ireland's overall economic performance and supports its fiscal stability. In 2023, Ireland's trade surplus stood at €74.5 billion.

Fiscal policy

The Irish government implements prudent fiscal policies aimed at maintaining sustainable economic growth and managing public finances responsibly. This involves strategic government spending on key sectors such as healthcare, education, and infrastructure, alongside effective taxation measures to generate revenue and ensure fiscal stability. In 2023, Ireland's total government spending amounted to €94.8 billion.

Monetary policy

Monetary policy in Ireland is primarily influenced by the actions of the Central Bank of Ireland, which aims to maintain price stability and support economic growth. The central bank regulates interest rates, manages currency issuance, and supervises financial institutions to promote a stable and resilient financial system. As of 2023, Ireland's central bank interest rate stands at 0.25%.

Trade agreements

Ireland benefits from various trade agreements that enhance its access to international markets and promote trade relations. While not a party to NAFTA (North American Free Trade Agreement), Ireland benefits from its membership in the European Union, which provides access to the EU single market and participation in trade agreements negotiated by the EU.

Environmental regulations

Ireland upholds stringent environmental regulations aimed at protecting natural resources, reducing pollution, and addressing climate change. These regulations govern various sectors such as energy production, waste management, and transportation, promoting sustainability and environmental responsibility across industries.

Tax System in Ireland

Capital Gains Tax: Capital gains tax is levied on the profits earned from the sale of assets such as stocks, bonds, and real estate. In Ireland, the capital gains tax rate for individuals is 33%, while certain exemptions and reliefs may apply in specific circumstances, such as Entrepreneur Relief for business owners.
Corporate Tax Rate: Ireland's corporate tax rate is one of the lowest in the European Union, currently set at 12.5%. This attractive rate has contributed to Ireland's reputation as a favorable destination for foreign investment and business establishment.
Sales Tax: Ireland does not have a traditional sales tax like many other countries. Instead, it employs a value-added tax (VAT) system, which applies to most goods and services at varying rates. The standard VAT rate in Ireland is 23%, with reduced rates of 13.5% and 9% applying to certain goods and services.
Property Tax: Property tax in Ireland is levied through the Local Property Tax (LPT) system, which is based on the market value of residential properties. Property owners are required to self-assess their properties and pay the annual tax accordingly, with rates varying depending on property value and location.
Payroll Tax: Payroll tax, commonly known as Pay-Related Social Insurance (PRSI) in Ireland, is levied on wages and salaries to fund social security benefits such as pensions, healthcare, and unemployment benefits. Both employees and employers contribute to PRSI at varying rates based on income levels.
Tax Deductions and Credits:Ireland offers various tax deductions and credits to individuals and businesses to reduce their tax liabilities. These may include deductions for expenses related to education, healthcare, and business investments, as well as credits for specific activities such as research and development.
Tax Compliance: Ireland's tax collection system is generally efficient, with the Revenue Commissioners responsible for tax administration and enforcement. The Revenue Commissioners employ modern technology and data analytics to ensure compliance and deter tax evasion.
Tax Burden:The overall tax burden in Ireland, as measured by the ratio of tax revenue to gross domestic product (GDP), is moderate compared to other developed countries. However, the distribution of the tax burden among individuals and businesses can vary depending on factors such as income levels, deductions, and exemptions.