Irish Revenue on August 28 released five tax manuals on recent corporate tax law changes, including guidance on new tax residency rules that make it more difficult for multinationals to take advantage of the “Double Irish” tax loophole and rules that change capital allowances for intangible assets.
A manual titled “Company Residence in the State” addresses new section 23A of the Taxes Consolidation Act 1997, introduced in Finance Act 2014, which provides that companies incorporated in Ireland after January 1 will be considered tax residents of Ireland except in cases where tax treaties provide otherwise.
Transition rules provide that companies incorporated in Ireland prior January 1 can continue to apply Ireland’s management and control standard for residency until 2020, unless the company undergoes both a change in ownership and a major change in the conduct of the business.
The manual provides guidance on when such a change of ownership or major change in the conduct of a business occurs.
The manual also states that Ireland’s common law principle of management and control will continue to apply when the new statute does not, including in cases involving foreign incorporated companies.
Further, the manual confirms that “stateless company” rules introduced in 2013 that deem some Irish incorporated companies to be resident in Ireland are repealed for companies incorporated on or after January 1, but will continue to apply to companies that are subject to the transition rules.
Updated manuals also address new rules on capital allowances for intangible assets, accelerated capital allowances for energy-efficient equipment, tax relief for new start-up companies, and companies ceasing to be member of group. The new rules were added to the Taxes Consolidation Act 1997 by Finance Act 2014.
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