{"id":11066,"date":"2022-04-18T19:58:54","date_gmt":"2022-04-18T19:58:54","guid":{"rendered":"http:\/\/legalblog.ie\/?p=11066"},"modified":"2024-04-07T14:05:35","modified_gmt":"2024-04-07T14:05:35","slug":"residence-scope","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/residence-scope\/","title":{"rendered":"Scope &#038; Residence"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Entities_Covered\" title=\"Entities Covered\">Entities Covered<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Profits_Gains\" title=\"Profits &amp; Gains\">Profits &amp; Gains<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Corporates_Other_Tax\" title=\"Corporates &amp; Other Tax\">Corporates &amp; Other Tax<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Residence_liability_to_tax\" title=\"Residence \/liability to tax\">Residence \/liability to tax<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Non-Resident\" title=\"Non-Resident\">Non-Resident<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Branch_Permanent_Establishment\" title=\"Branch\/ Permanent Establishment\">Branch\/ Permanent Establishment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/residence-scope\/#OECD_Branch_Rules\" title=\"OECD Branch Rules\">OECD Branch Rules<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Anti-Double_Irish\" title=\"Anti-Double Irish\">Anti-Double Irish<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Finance_Act_2014_Reforms\" title=\"Finance Act 2014 Reforms\">Finance Act 2014 Reforms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Central_Management_and_Control\" title=\"Central Management and Control\">Central Management and Control<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Trading_Exemption\" title=\"Trading Exemption\">Trading Exemption<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/legalblog.ie\/residence-scope\/#Sufficient_Presence\" title=\"Sufficient Presence\">Sufficient Presence<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#TAXES_CONSOLIDATION_ACT\" title=\"TAXES CONSOLIDATION ACT\">TAXES CONSOLIDATION ACT<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Charging_and_Assessing_of_Non-Residents_ss_1032-1043\" title=\"Charging and Assessing of Non-Residents (ss. 1032-1043)\">Charging and Assessing of Non-Residents (ss. 1032-1043)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Income_tax_and_corporation_tax_ss_1032-1041\" title=\"Income tax and corporation tax (ss. 1032-1041)\">Income tax and corporation tax (ss. 1032-1041)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Restrictions_on_certain_reliefs\" title=\"Restrictions on certain reliefs.\">Restrictions on certain reliefs.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Assessment\" title=\"Assessment.\">Assessment.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Profits_from_agencies_etc\" title=\"Profits from agencies, etc.\">Profits from agencies, etc.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Relieving_provision_to_section_1035\" title=\"Relieving provision to section 1035.\">Relieving provision to section 1035.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Control_over_residents\" title=\"Control over residents.\">Control over residents.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Charge_on_percentage_of_turnover\" title=\"Charge on percentage of turnover.\">Charge on percentage of turnover.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Merchanting_profit\" title=\"Merchanting profit.\">Merchanting profit.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Rents_payable_to_non-residents\" title=\"Rents payable to non-residents.\">Rents payable to non-residents.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Charging_and_assessment_of_persons_not_resident_or_ordinarily_resident_modification_of_general_rules\" title=\"Charging and assessment of persons not resident or ordinarily resident: modification of general rules.\">Charging and assessment of persons not resident or ordinarily resident: modification of general rules.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/legalblog.ie\/residence-scope\/2\/#Application_of_sections_1034_and_1035_for_purposes_of_capital_gains_tax\" title=\"Application of sections 1034 and 1035 for purposes of capital gains tax.\">Application of sections 1034 and 1035 for purposes of capital gains tax.<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Entities_Covered\"><\/span>Entities Covered<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Corporation tax applies to companies and most other legal bodies, whether formed in Ireland or abroad. A foreign incorporated company may be subject to Irish Corporation Tax, if it is resident in Ireland. Formerly, a company incorporated in Ireland, could be outside of the scope of Irish corporation tax if it was managed and controlled from \u00a0outside Ireland and satisfied certain other conditions.<\/p>\n<p>Corporation tax applies to companies and order corporate bodies.\u00a0 For the most part it applies to companies formed under Irish law.\u00a0 It may also apply to other corporate entities funded under the laws of other jurisdictions which are deemed resident in Ireland.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Profits_Gains\"><\/span>Profits &amp; Gains<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>An Irish corporation or company is taxed on it worldwide profits or gains irrespective of where they are incurred. In contrast, a non-resident company is only subject to Irish tax in respect of trading income arising through a branch or agency in the State or income derived from property used or held or owned by the branch or agency.<\/p>\n<p>Capital gains for companies are subject to corporation tax.\u00a0 Gains and losses in the accounting period are calculated in accordance with the capital gains tax rules.\u00a0 The capital gains tax rate is then adjusted (where necessary) so that the corporation tax rate applies.\u00a0 A 33% rate applies to capital gains.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Corporates_Other_Tax\"><\/span>Corporates &amp; Other Tax<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Gains and losses incurred by companies on development land are subject to capital gains tax and not corporation tax.\u00a0 They do not form part of the company&#8217;s tax calculation and are calculated separately.\u00a0 The filing and payment requirement are different.<\/p>\n<p>Development land gains are those referable to land whose value carries developmental potential. \u00a0See our separate section on capital gains tax.\u00a0 Any land where part of the value is attributable to a prospective change in the permitted use is development land.<\/p>\n<p>The effect of categorising development land profits otherwise, is that losses and gains on development land cannot be offset against other profits and gains.\u00a0 Development land was subject to a special windfall tax of 80% until 2014.<\/p>\n<p>Income received by a non-resident company other than from the above sources is subject to Irish income tax and not Irish corporation tax. This applies to Irish source income, which is usually withheld at source.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Residence_liability_to_tax\"><\/span>Residence \/liability to tax<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There are two alternative bases upon which an Irish company can be resident for Irish corporation tax. The first is the place of central management and control. The second is the place of incorporation. Significant changes were made in the period 1 January 2015 to 1 January 2021. There were transitional rules that apply to companies incorporated before 1 January 2015\u00a0 which applied until 1 January 2021.<\/p>\n<p>Generally a company is resident in Ireland if it is incorporated in or managed and controlled in \u00a0Ireland. Irish resident companies are charged to Irish corporation tax on their worldwide income and capital gains. Dividends received from other resident Irish resident companies are not counted as taxable income. Otherwise there would be multiple layers of taxation in company groups.<\/p>\n<p>Dividends received by Irish resident individuals, which are paid through or ultimately emanate from subsidiaries and other companies, are \u00a0taxed at the point in time when the dividend is declared by the company of which the individual is a shareholder.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Non-Resident\"><\/span>Non-Resident<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A non-resident company is liable for trading income and gains of a branch or agency of the company in the State or from property or assets used by the branch.<\/p>\n<p>A non-resident company is subject to income tax (not corporation tax) on other Irish source income. It is subject to capital gains tax on disposal of non-branch \/ agency assets, land and mineral rights (i.e. specified assets, principally real property).<\/p>\n<p>See the sections on income tax and Irish source income.A\u00a0 company may be resident or not resident, \u00a0if so deemed under a Double Taxation Treaty.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Branch_Permanent_Establishment\"><\/span>Branch\/ Permanent Establishment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Whether or not there is a \u00a0branch or agency turns on the degree of presence. It usually requires a place of business. The presence of employees is very significant but is not necessarily sufficient.<\/p>\n<p>No formal legal right to use the place is required. Where there is a place of business, it need not be exclusively available. If there is a sufficient presence within the state to undertake the activities on a stand-alone basis, there is usually a branch. Having employees within the State can be an indication of a branch.<\/p>\n<p>It is the profits and \u00a0gains of the branch that are taxable. There may be a branch or agency but the \u00a0particular profits or gains may not be attributable to it.<\/p>\n<p>The concept of a branch is similar to that of a permanent establishment which is used in double taxation agreements. In this latter context, it defines the degree of presence in a state sufficient to make the income and gains of a company (and also an individual) taxable there. Double taxation agreements commonly set out a detailed definition to the concept of permanent establishment.<\/p>\n<p>Double taxation agreements commonly indicate that permanent establishment may include a branch place of management office factory et cetera. They commonly include and exclude particular degrees of presence. There is a great deal of guidance on the concept of a permanent establishment for the purpose of double taxation agreements.<\/p>\n<p>This topic is dealt with\u00a0 in more detail in the section on double taxation agreements and the multilateral instrument.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"OECD_Branch_Rules\"><\/span>OECD Branch Rules<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2021\u00a0 \u00a0provide a for the application of an OECD-developed mechanism (the \u201cauthorised OECD approach\u201d) for the attribution of income to a branch of a non-resident company operating in the State.<\/p>\n<p>For this purpose, the amount of any trading income arising directly or indirectly through or from a branch and any income from property or rights used by, or held by or for, the branch (the \u201crelevant branch income\u201d) is an amount that is attributable to the branch in accordance with the provisions. The relevant branch income which is attributable to a branch is the amount of income which it would have earned if it were an independent and separate enterprise.<\/p>\n<p>Attributing relevant branch income to a branch shall be done in accordance with the OECD\u2019s Guidance on the authorised OECD approach.\u00a0There are additional documentation requirements to assist in ensuring relevant branch income has been computed in accordance with the provisions.<\/p>\n<p>It provides for proportionate penalties for taxpayers who fail to comply with a request to provide relevant branch records to the Revenue Commissioners.<\/p>\n<p>It provides for protection from tax-geared penalties where a taxpayer prepares such documentation and provides it to the Revenue Commissioners on a timely basis and the documentation demonstrates reasonable efforts to comply with the section.<\/p>\n<p>The authorised OECD approach, for the attribution of profits to a branch, applies to accounting periods commencing on or after 1 January 2022. Small and medium enterprises are to come within the scope of the new provision in the future on the making of an order by the Minister.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Anti-Double_Irish\"><\/span>Anti-Double Irish<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Provision was made by the Finance (No.2) Act 2013 to ensure that an Irish Incorporated company cannot be stateless in terms of tax residence.\u00a0 This may result from \u00a0to incompatibility between Ireland&#8217;s tax residence rules and those of a treaty partner country.<\/p>\n<p>In order to mitigate the so-called double Irish structure, it was provided that unless the double taxation agreement otherwise provides, a company incorporated in Ireland is to be as tax resident in Ireland for Taxes Act and Capital Gains Tax Act.\u00a0 The legislation is not to prevent a foreign incorporated company centrally managed and controlled in Ireland from being Irish resident.<\/p>\n<p>The provision applied immediately to companies incorporated after 1 January 2015. It applied from 1 January <strong>2021<\/strong> in respect of companies incorporated on or before\u00a0 31 December 2014.<\/p>\n<p>Where there was both a change in ownership of a company and a major change in the nature or conduct of the business in the six years commencing one year before hand, the company was regarded as Irish resident from the date of change in ownership.<\/p>\n<p>Treaty exemptions apply when the\u00a0 double taxation treaty between Ireland and the relevant country (if any) deem the company not to be resident in Ireland.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Finance_Act_2014_Reforms\"><\/span>Finance Act 2014 Reforms<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A company which is incorporated in the State is \u00a0regarded for the purposes of corporation tax (and \u00a0Capital Gains Tax) as resident in the State. A company which is regarded under a double taxation agreement \u00a0as resident in a territory other than the State and not resident in the State is regarded\u00a0 as not resident in the State.<\/p>\n<p>This does not prevent a company that\u2014<\/p>\n<ul>\n<li>is not incorporated in the State, and<\/li>\n<li>is centrally managed and controlled in the State,<\/li>\n<\/ul>\n<p>being resident in the State for the purposes of corporation tax and capital gains tax<\/p>\n<p>The above provisions apply from 1 January 2015. However, as respects a company incorporated before 1 January 2015, they apply\u00a0 until\u00a0 31 December 2020. If \u00a0after 31 December 2014, of a change in ownership of the company where there is a major change in the nature or conduct of the business of the company within the relevant period, they apply from an earlier date.<\/p>\n<p>After 1 January 2021 companies are resident for Irish corporation tax purposes if they are incorporated in Ireland and do not qualify for exemption under a double taxation agreement or if they are not incorporated in Ireland but are centrally managed and controlled in Ireland.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Central_Management_and_Control\"><\/span>Central Management and Control<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Subject to the above, the principal test of residence in Ireland is that the company\u2019s central management and control is undertaken in Ireland. There is no single determining factor; it is composite assessment based on the entirety of the manner in which the company is run and controlled. It is said to be a matter of fact and is therefore specific to the company circumstances.<\/p>\n<p>There have been numerous cases on the topic. Key factors include;<\/p>\n<ul>\n<li>where directors meetings are held;<\/li>\n<li>where the majority of directors reside<\/li>\n<li>where the key business at the highest level of control is undertaken<\/li>\n<li>\u00a0where strategic management decisions are made<\/li>\n<li>where shareholders meetings are held;<\/li>\n<li>where major strategic decisions and policies are made<\/li>\n<li>where the head offices is<\/li>\n<li>where key books and records are held<\/li>\n<\/ul>\n<p>Equally\u00a0 important is the question of where the company is not resident. Just because a company is resident in Ireland for tax purposes, it does not follow that it might not be resident in another country under its corporation tax law. This is commonly the case and the matter may be governed and determined by the relevant double taxation treaty.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Trading_Exemption\"><\/span>Trading Exemption<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The trading exemption was relevant prior to 1 January 2021. It deemed companies incorporated in Ireland, which were not otherwise resident, to be Irish resident unless they satisfied the trading exemption test.<\/p>\n<p>This basis was \u00a0introduced in 1999 due to perceived abuse by companies using Ireland as a place of \u00a0incorporation. A company \u201cincorporated\u201d in Ireland is one formed and registered in Irish Companies Registration Office. An Irish incorporated company was deemed resident even if it is not centrally controlled and managed in Ireland, unless the \u00a0trading or treaty exemptions applied.<\/p>\n<p>The exemption applied where the company or a related company carried out a trade in the State and was \u00a0ultimately controlled by persons residing in an EU country or in \u00a0a Double Tax treaty country. This is intended to exclude companies resident in tax havens. There is an exemption for certain companies related to stock exchange quoted companies.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Sufficient_Presence\"><\/span>Sufficient Presence<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If a company seeks to be within the charge to Irish Corporation tax and outside that of another country, it will need to consider the tax rules and the Irish Double Tax treaty with the other state where it might also be deemed to be resident. Most countries base corporate tax liability principally on the place of management and control. Other factors, such as the place of incorporation also commonly apply.<\/p>\n<p>Issues may arise for foreign enterprises seeking to establish a trading \u00a0base in Ireland in terms of what is sufficient to constitute an Irish trade. \u00a0The Revenue has issued guidance on the existence of a trade. \u00a0\u00a0\u00a0Some activities clearly constitute trading such as provision of services, manufacturing etc. \u00a0In other more marginal cases where activities are largely outsourced, the question may arise as to whether there is generally a trade.<\/p>\n<p>Relevant factors include:<\/p>\n<ul>\n<li>Whether there is real value added;<\/li>\n<li>Numbers of employees with sufficient skills to carry out the trade concerned;<\/li>\n<li>Commercial rationale;<\/li>\n<\/ul>\n<p>The issue of whether there is a trade is distinct from the issue of whether the trade is controlled and managed from Ireland.<\/p>\n<p><!--nextpage--><\/p>\n<h2>TAXES CONSOLIDATION ACT<\/h2>\n<p>&nbsp;<\/p>\n<p>Part 45<\/p>\n<h4>Charging and Assessing of Non-Residents (ss. 1032-1043)<\/h4>\n<p>Chapter 1<\/p>\n<h4>Income tax and corporation tax (ss. 1032-1041)<\/h4>\n<p>1032.<\/p>\n<h4>Restrictions on certain reliefs.<\/h4>\n<p>(1)Except where otherwise provided by this section, an individual not resident in the State shall not be entitled to any of the allowances, deductions, reliefs or reductions under the provisions specified in the Table to section 458.<\/p>\n<p>(2)Where an individual not resident in the State proves to the satisfaction of the Revenue Commissioners that he or she &#8211;<\/p>\n<p>(a)is a citizen of Ireland,<\/p>\n<p>(b)is resident outside the State for the sake or on account of his or her health or the health of a member of his or her family resident with him or her or because of some physical infirmity or disease in himself or herself or any such member of his or her family, and that previous to such residence outside the State he or she was resident in the State,<\/p>\n<p>(c)is a citizen, subject or national of another Member State of the European Communities, or of the United Kingdom, or of a country of which the citizens, subjects or nationals are for the time being exempted by an order under section 10 of the Aliens Act, 1935, from any provision of, or of an aliens order under, that Act, or<\/p>\n<p>(d)is a person to whom one of the paragraphs (a) to (e) of the proviso to section 24 of the Finance Act, 1920, applied in respect of the year ending on the 5th day of April, 1935, or any previous year of assessment,<\/p>\n<p>then, subsection (1) shall not apply to that individual, but the amount of any allowance, deduction or other benefit mentioned in that subsection shall, in the case of that individual, be reduced to an amount which bears the same proportion to the total amount of that allowance, deduction or other benefit as the portion of his or her income subject to Irish income tax bears to his or her total income from all sources (including income not subject to Irish income tax).<\/p>\n<p>(3)Notwithstanding subsection (2), where an individual not resident in the State proves to the satisfaction of the Revenue Commissioners that the individual is a resident of another Member State of the European Communities or of the United Kingdom and that the proportion which the portion of the individual&#8217;s income subject to Irish income tax bears to the individual&#8217;s total income from all sources (including income not subject to Irish income tax) is 75 per cent or greater, subsection (1) or, as the case may be, subsection (2) shall not apply to that individual and he or she shall be entitled to the allowance, deduction or other benefit mentioned in subsection (1).<\/p>\n<p>1033. Entitlement to tax credit in respect of distributions.<br \/>\nRepealed from 6 April 1999<br \/>\nAn individual who, having made a claim in that behalf, is by virtue of subsection (2) or (3) of section 1032 entitled to relief in respect of any year of assessment under any of the provisions specified in the Table to section 458 shall be entitled to a tax credit in respect of any distribution received by him or her in that year to the same extent as if he or she were resident in the State, and section 153(1) shall not apply in relation to such an individual.<\/p>\n<p>1034.<\/p>\n<h4>Assessment.<\/h4>\n<p>A person not resident in the State, whether a citizen of Ireland or not, shall be assessable and chargeable to income tax in the name of any trustee, guardian, or committee of such person, or of any factor, agent, receiver, branch or manager, whether such factor, agent, receiver, branch or manager has the receipt of the profits or gains or not, in the like manner and to the like amount as such non-resident person would be assessed and charged if such person were resident in the State and in the actual receipt of such profits or gains; but, in the case of a partnership, the precedent partner (within the meaning of section 1007) or, if there is no precedent partner, the factor, agent, receiver, branch or manager shall be deemed to be the agent of a non-resident partner.<\/p>\n<p>1035.<\/p>\n<h4>Profits from agencies, etc.<\/h4>\n<p>Subject to section 1035A, a non-resident person shall be assessable and chargeable to income tax in respect of any profits or gains arising, whether directly or indirectly, through or from any factorship, agency, receivership, branch or management, and shall be so assessable and chargeable in the name of the factor, agent, receiver, branch or manager.<\/p>\n<p>1035A.<\/p>\n<h4>Relieving provision to section 1035.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;AIF&#8217; has the same meaning as in section 747G;<\/p>\n<p>&#8216;AIFM&#8217; has the same meaning as in section 747G;<\/p>\n<p>&#8216;authorised agent&#8217; means &#8211;<\/p>\n<p>(a)a person acting as an investment business firm, or an authorised member firm &#8211;<\/p>\n<p>(i)under an authorisation given by the Central Bank of Ireland under section 10(1) of the Investment Intermediaries Act 1995 or, as the case may be, Regulation 8 of the European Union (Markets in Financial Instruments) Regulations 2017 (S.I. No. 375 of 2017) and not subsequently revoked, or<\/p>\n<p>(ii)under an authorisation, which corresponds to either of the authorisations referred to in subparagraph (i), given by a competent authority in a relevant Member State (within the meaning of section 835I(1)) for the purpose of Directive 2014\/65\/EU of the European Parliament and of the Council of 15 May 2014 as amended or extended from time to time, and not subsequently revoked and which provides one, or more, investment service through a branch or agency in the State pursuant to the European Union (Markets in Financial Instruments) Regulations 2017,<\/p>\n<p>(b)a credit institution duly authorised by virtue of Directive No. 2000\/12\/EC of 20 March 2000 which provides investment business services and in so doing does not exceed the terms of its authorisation and that authorisation has not been revoked,<\/p>\n<p>(c)a company &#8211;<\/p>\n<p>(i)authorised under any laws of the State that implement the relevant Directives, and<\/p>\n<p>(ii)which carries on a trade which consists of or includes the management of unit trusts, common contractual funds or investment companies, or any combination thereof, each of which is a relevant UCITS,<\/p>\n<p>or<\/p>\n<p>(d)an AIFM authorised &#8211;<\/p>\n<p>(i)under any laws of the State which implement the relevant AIFM Directives, or<\/p>\n<p>(ii)under the laws of an EEA state and which manages one, or more than one, AIF through a branch or agency in the State,<\/p>\n<p>and &#8216;authorisation&#8217; shall be construed accordingly;<\/p>\n<p>&#8216;authorised member firm&#8217; has the meaning assigned to it by section 3 of the Stock Exchange Act 1995;<\/p>\n<p>&#8216;branch or agency&#8217; has the same meaning as in section 4;<\/p>\n<p>&#8216;competent authority&#8217; has the meaning assigned to it by section 2 of the Investment Intermediaries Act 1995;<\/p>\n<p>&#8216;EEA state&#8217; has the same meaning as in section 747B;<\/p>\n<p>&#8216;financial trade&#8217; means a trade exercised in the State by a non-resident person through an authorised agent under and within the terms of the authorised agent&#8217;s authorisation;<\/p>\n<p>&#8216;investment business firm&#8217; has the meaning assigned to it by section 2 of the Investment Intermediaries Act 1995;<\/p>\n<p>&#8216;investment business services&#8217; has the meaning assigned to it by section 2 of the Investment Intermediaries Act 1995;<\/p>\n<p>&#8216;relevant AIFM Directives&#8217; has the same meaning as in section 747G;<\/p>\n<p>&#8216;relevant Directives&#8217; means Directive 2009\/65\/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), and any Directive amending that Directive;<\/p>\n<p>&#8216;relevant UCITS&#8217; means an undertaking for collective investment in transferable securities &#8211;<\/p>\n<p>(i)to which the relevant Directives apply, and<\/p>\n<p>(ii)which is formed under the laws of any of the Member States of the European Union other than the State.<\/p>\n<p>(2)For the purposes of this section &#8211;<\/p>\n<p>(a)an authorised agent, through whom a non-resident person exercises a financial trade in the State, is independent in relation to the non-resident person for a chargeable period if throughout the chargeable period &#8211;<\/p>\n<p>(i)the authorised agent does not otherwise act on behalf of the non-resident person,<\/p>\n<p>(ii)the authorised agent, when acting on behalf of the non-resident person, does so in an independent capacity,<\/p>\n<p>(iii)the authorised agent, when acting on behalf of the non-resident person, does so in the ordinary course of the authorised agent&#8217;s business, and<\/p>\n<p>(iv)the requirements referred to in subsection (4), in relation to the financial trade, are satisfied,<\/p>\n<p>(b)an authorised agent shall not be regarded as acting in an independent capacity when acting on behalf of a non-resident person unless, having regard to its legal, financial and commercial characteristics, the relationship between them is a relationship between persons carrying on independent businesses that deal with each other at arm&#8217;s length, and<\/p>\n<p>(c)references to an amount of profits or gains of a trade, exercised in the State by a non-resident person, to which another person has a beneficial entitlement are references to the amount of profits or gains of the trade to which the other person has, or may acquire, a beneficial entitlement by virtue of &#8211;<\/p>\n<p>(i)any interest of the other person (whether or not an interest giving a right to an immediate payment of a share of the profits or gains of the trade) in property in which the whole or any part of the profits or gains of the trade are represented, or<\/p>\n<p>(ii)any interest of the other person in, or other rights in relation to, the non-resident person.<\/p>\n<p>(3)Notwithstanding section 18, a non-resident person shall not be assessable and chargeable to income tax in respect of any profits or gains arising or accruing for a chargeable period to the non-resident person from a financial trade exercised in the State solely through an authorised agent who throughout the chargeable period is independent in relation to the non-resident person.<\/p>\n<p>(4)The requirements of this subsection are satisfied, at any time, in relation to a financial trade exercised in the State by a non-resident person through an authorised agent where at that time &#8211;<\/p>\n<p>(a)the aggregate of the amount of the profits or gains of the trade, to which the authorised agent and persons, who are both resident in the State and connected with the authorised agent, have a beneficial entitlement, does not exceed 20 per cent of the amount of the profits or gains of the trade, or<\/p>\n<p>(b)the Revenue Commissioners are satisfied that it is the intention of the authorised agent, that the aggregate of the amount of the profits or gains of the trade, to which the authorised agent and persons who are resident in the State and connected with the authorised agent have beneficial entitlement, does not exceed 20 per cent of the amount of the profits or gains of the trade and that the reasons for the failure to fulfill that intention, at that time, are of a temporary nature.<\/p>\n<p>(5)The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this section to be performed or discharged by them.<\/p>\n<p>1036.<\/p>\n<h4>Control over residents.<\/h4>\n<p>Where a non-resident person, not being a citizen of Ireland or an Irish firm or company, or a branch of a non-resident person, carries on business with a resident person, and it appears to the inspector that, owing to the close connection between the resident person and the non-resident person and to the substantial control exercised by the non-resident person over the resident person, the course of business between those persons can be so arranged and is so arranged that the business done by the resident person in pursuance of that person&#8217;s connection with the non-resident person produces to the resident person either no profits or less than the ordinary profits which might be expected to arise from that business, then, the non-resident person shall be assessable and chargeable to income tax in the name of the resident person as if the resident person were an agent of the non-resident person.<\/p>\n<p>1037.<\/p>\n<h4>Charge on percentage of turnover.<\/h4>\n<p>(1)Where it appears to the inspector or on appeal to the Appeal Commissioners that the true amount of the profits or gains of any non-resident person chargeable with income tax in the name of a resident person cannot in any case be readily ascertained, the non-resident person may, if it is thought fit by the inspector or the Appeal Commissioners, be assessed and charged on a percentage of the turnover of the business done by the non-resident person through or with the resident person in whose name the non-resident person is so chargeable, and in such a case the provisions of the Income Tax Acts relating to the delivery of statements by persons acting on behalf of others shall extend so as to require returns to be given by the resident person of the business so done by the non-resident person through or with the resident person in the same manner as statements of profits or gains to be charged are to be delivered by persons acting for incapacitated or non-resident persons.<\/p>\n<p>(2)The amount of the percentage under subsection (1) shall in each case be determined, having regard to the nature of the business, by the inspector by whom the assessment on the percentage basis is made, subject to appeal to the Appeal Commissioners.<\/p>\n<p>(2A)A resident person or a non-resident person aggrieved by an assessment made on that person under subsection (1) may appeal the assessment to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of assessment.<\/p>\n<p>(3)[deleted]<\/p>\n<p>1038.<\/p>\n<h4>Merchanting profit.<\/h4>\n<p>(1)Where a non-resident person is chargeable to income tax in the name of any branch, manager, agent, factor or receiver in respect of any profits or gains arising from the sale of goods or produce manufactured or produced outside the State by the non-resident person, the person in whose name the non-resident person is so chargeable may, if that person thinks fit, apply to the inspector to have the assessment to income tax in respect of those profits or gains made or amended, as the case may be, on the basis of the profits or gains that might reasonably be expected to have been earned or made by &#8211;<\/p>\n<p>(a)a merchant, or<\/p>\n<p>(b)where the goods are retailed by or on behalf of the manufacturer or producer, a retailer of the goods sold,<\/p>\n<p>who had bought direct from the manufacturer or producer and, on proving the amount of the profits or gains on that basis to the satisfaction of the inspector, the inspector shall make or amend the assessment accordingly.<\/p>\n<p>(2)A resident person or a non-resident person aggrieved by an assessment or an amended assessment made on that person under subsection (1) may appeal the assessment or amended assessment to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of assessment.<\/p>\n<p>1039. Restrictions on chargeability.<br \/>\n(1)Nothing in this Chapter shall render a non-resident person chargeable in the name of &#8211;<\/p>\n<p>(a)a broker or general commission agent, or<\/p>\n<p>(b)an agent, not being &#8211;<\/p>\n<p>(i)an authorised person carrying on the regular agency of the non-resident person, or<\/p>\n<p>(ii)a person chargeable as if that person were an agent in pursuance of this Chapter,<\/p>\n<p>in respect of profits or gains arising from sales or transactions carried out through such a broker or agent.<\/p>\n<p>(2)The fact that a non-resident person executes sales or carries out transactions with other non-residents in circumstances which would make that person chargeable in pursuance of this Chapter in the name of a resident person shall not of itself make that person chargeable in respect of profits arising from those sales or transactions.<\/p>\n<p>1040. Application of sections 1034 to 1039 for purposes of corporation tax.<br \/>\nWithout prejudice to the general application of income tax procedure to corporation tax, the provisions of this Chapter relating to the assessment and charge of income tax on persons not resident in the State, in so far as they are applicable to tax chargeable on a company, shall apply with any necessary modifications in relation to corporation tax chargeable on companies not resident in the State.<\/p>\n<p>1041.<\/p>\n<h4>Rents payable to non-residents.<\/h4>\n<p>(1)Subject to subsection (1B)(b), section 1034 shall not apply &#8211;<\/p>\n<p>(a)tax on profits or gains chargeable to tax under Case V of Schedule D, or<\/p>\n<p>(b)tax on any of the profits or gains chargeable under Case IV of Schedule D which arise under the terms of a lease, but to a person other than the lessor, or which otherwise arise out of any disposition or contract such that if they arose to the person making it they would be chargeable under Case V of Schedule D,<\/p>\n<p>where payment is made (whether in the State or elsewhere) directly to a person whose usual place of abode is outside the State (referred to in this section as the &#8216;non- resident person&#8217;) and where the person making the payment provides the Revenue Commissioners with the information specified in subsection (1A); but section 238 shall apply in relation to the payment as it applies to other payments, being annual payments charged with tax under Schedule D and not payable out of profits or gains brought into charge to tax.<\/p>\n<p>(1A)The following information is specified for the purposes of subsection (1):<\/p>\n<p>(a)the name and address of the non-resident person;<\/p>\n<p>(b)the address of the property in respect of which the payment referred to in subsection (1) is made, including the Eircode in respect of the property;<\/p>\n<p>(c)the unique identification number assigned to the property for the purposes of the Finance (Local Property Tax) Act 2012;<\/p>\n<p>(d)the date the payment referred to in subsection (1) is made to the non-resident person;<\/p>\n<p>(e)the gross amount of the payment referred to in subsection (1);<\/p>\n<p>(f)the amount withheld from the payment referred to in subsection (1) and remitted to the Revenue Commissioners in accordance with section 238.<\/p>\n<p>(1B)<\/p>\n<p>(a)Section 1034 shall not apply to &#8211;<\/p>\n<p>(i)tax on profits or gains chargeable to tax under Case V of Schedule D, or<\/p>\n<p>(ii)tax on any of the profits or gains chargeable under Case IV of Schedule D which arise under the terms of the lease, but to a person other than the lessor, or which otherwise arise out of any disposition or contract such that if they arose to the person making it they would be chargeable under Case V of Schedule D,<\/p>\n<p>where the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of the non-resident person &#8211;<\/p>\n<p>(I)deducts tax in accordance with section 238, and<\/p>\n<p>(II)provides the Revenue Commissioners with the information specified in subsection (1C).<\/p>\n<p>(b)Where paragraph (a) applies &#8211;<\/p>\n<p>(i)subsection (1) shall not apply, and<\/p>\n<p>(ii)section 238 shall apply to the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of the non-resident person in relation to a payment due to a non-resident person which is made to the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of that non-resident person as it applies to other payments, being annual payments charged with tax under Schedule D and not and payable out of profits or gains brought into charge to tax.<\/p>\n<p>(1C)The following information is specified for the purposes of subsection (1B):<\/p>\n<p>(a)the name, address and tax reference number of the non-resident person (being, in the case of an individual, his or her personal public service number (within the meaning of section 262 of the Social Welfare Consolidation Act 2005) and, in the case of a company, the reference number stated on any return of income or notice of assessment issued to the company by the Revenue Commissioners);<\/p>\n<p>(b)the address of the property in respect of which the payment due to the non-resident person is made, including the Eircode in respect of the property;<\/p>\n<p>(c)the unique identification number assigned to the property for the purposes of the Finance (Local Property Tax) Act 2012;<\/p>\n<p>(d)the date the payment is due to the non-resident person in respect of the property;<\/p>\n<p>(e)the gross amount of the payment due in respect of the property;<\/p>\n<p>(f)the amount withheld from the payment due in respect of the property and remitted to the Revenue Commissioners in accordance with section 238.<\/p>\n<p>(2)Where by virtue of subsection (1) or (1B) the tax chargeable for any year of assessment on a person&#8217;s profits or gains chargeable to tax under either or both of the Cases referred to in that subsection would but for this subsection be greater than the tax which would be chargeable on such profits or gains but for subsection (1) or (1B) , then, on a claim in that behalf being made, relief shall be given from the excess, whether by repayment or otherwise.<\/p>\n<p>Chapter 2<\/p>\n<p>Capital gains tax (ss. 1042-1043)<\/p>\n<p>1042.<\/p>\n<h4>Charging and assessment of persons not resident or ordinarily resident: modification of general rules.<\/h4>\n<p>(1)Notwithstanding section 28(2), 31 or 979, any capital gains tax payable in respect of a chargeable gain which on a disposal accrues to a person not resident or ordinarily resident in the State at the time at which the disposal is made may be assessed and charged before the end of the year of assessment in which the chargeable gain accrues, and the tax so assessed and charged shall be payable at or before the expiration of a period of 3 months beginning with the time at which the disposal is made, or at the expiration of a period of 2 months beginning with the date of making the assessment, whichever is the later.<\/p>\n<p>(2)In computing the amount of capital gains tax payable under subsection (1), section 31 shall apply with any necessary modifications as regards the deduction of any allowable losses which accrued to the person mentioned in subsection (1) before the date of making of the assessment mentioned in that subsection.<\/p>\n<p>1043.<\/p>\n<h4>Application of sections 1034 and 1035 for purposes of capital gains tax.<\/h4>\n<p>Without prejudice to Part 41A, sections 1034 and 1035 shall apply, subject to any necessary modifications, to capital gains tax.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-11066\" data-postid=\"11066\" class=\"themify_builder_content themify_builder_content-11066 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Entities Covered Corporation tax applies to companies and most other legal bodies, whether formed in Ireland or abroad. A foreign incorporated company may be subject to Irish Corporation Tax, if it is resident in Ireland. Formerly, a company incorporated in Ireland, could be outside of the scope of Irish corporation tax if it was managed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[99,383],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11066"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=11066"}],"version-history":[{"count":9,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11066\/revisions"}],"predecessor-version":[{"id":34910,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11066\/revisions\/34910"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=11066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=11066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=11066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}