Guidance released by Ireland’s Office of the Revenue Commissioners on July 1 enhances double tax relief for foreign tax paid by foreign branches of Irish companies, permitting companies to carryback the foreign tax credit in some cases.
According to Statement of Practice SP-CT, carryback of the foreign tax credit is permitted where double tax arises “solely as a result of difference in timing of recognition of income” in Ireland and foreign jurisdictions.
The guidance is designed to relieve double taxation arising from timing mismatches, particularly mismatches in the insurance sector occurring from differences in the recognition of investment gains and acquisition expense and in the valuation of policyholder liabilities. Claims must be made within four years after the end of the accounting period for which the repayment relates. Statement of Practice SP-CT, Press release.
