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Repayment of tax in case of ceased company: double taxation relief
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111. Chapter 1 of Part 35 of the Principal Act is amended by the insertion of the following section after section 826A:
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“826B. (1) In this section—
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‘chargeable period’ has the meaning assigned to it by section 321;
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‘controlling interest’ has the meaning assigned to it by section 111A;
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‘correlative adjustment’ means an adjustment of profits under the terms of an arrangement having the force of law by virtue of subsection (1) or (1B), as the case may be, of section 826;
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‘effective 90 per cent subsidiary’ shall be construed in accordance with subsection (2);
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‘mutual agreement reached’ means an agreement reached between the competent authority of the State and a competent authority of another jurisdiction in accordance with a mutual agreement procedure under an arrangement having the force of law by virtue of subsection (1) or (1B), as the case may be, of section 826;
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‘ultimate parent entity’ means a company that owns, directly or indirectly, a controlling interest in any other company and that is not owned, directly or indirectly, by another company with a controlling interest in it;
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‘valid application’ shall be construed in accordance with subsection (4).
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(2) (a) Subject to paragraphs (b) and (c), for the purposes of this section, a company shall be an effective 90 per cent subsidiary of another company (in this paragraph referred to as ‘the parent company’) at any time if at that time—
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(i) the company is a 90 per cent subsidiary (within the meaning of section 9 (as modified by paragraph (b))) of the parent company,
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(ii) the parent company is beneficially entitled to not less than 90 per cent of any profits available for distribution to equity holders of the company, and
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(iii) the parent company would be beneficially entitled to not less than 90 per cent of the assets of the company available for distribution to its equity holders on a winding up.
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(b) For the purposes of subparagraph (i) of paragraph (a), section 9 shall apply as if, in subsection (1)(c) of that section, ‘directly or indirectly’ were substituted for ‘directly’.
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(c) For the purposes of subparagraphs (ii) and (iii) of paragraph (a), sections 413, 414, 415 and 418 shall, with any necessary modifications but without regard to section 411(1)(c) in so far as it relates to those sections, apply to the determination of the percentage of those profits or assets, as the case may be, to which a company is beneficially entitled as those provisions apply to the determination for the purposes of Chapter 5 of Part 12 of the percentage of any such profits or assets, as the case may be, to which a company is so entitled.
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(3) Subject to subsections (4) to (8), where—
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(a) a company (in this section referred to as ‘the ceased company’)—
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(i) has ceased to exist,
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(ii) would be entitled to a repayment of tax for a chargeable period, but for the fact that the company ceased to exist, and the repayment arises from—
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(I) a correlative adjustment, or
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(II) a mutual agreement reached,
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(iii) is not a transferor company for the purposes of section 865(10), and
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(iv) immediately prior to it ceasing to exist, was an effective 90 per cent subsidiary of a company that was an ultimate parent entity at that time (in this section referred to as a ‘group parent company’),
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and
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(b) another company (in this section referred to as a ‘group repayment company’) is resident in the State and the group repayment company is—
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(i) the group parent company,
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(ii) an effective 90 per cent subsidiary of the group parent company, or
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(iii) where the group parent company—
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(I) has ceased to exist, and
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(II) immediately prior to it ceasing to exist, was an effective 90 per cent subsidiary of a company that was an ultimate parent entity at that time (in this section referred to as a ‘successor group parent company’),
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the successor group parent company or an effective 90 per cent subsidiary of the successor group parent company,
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then, the group parent company, or the successor group parent company where paragraph (b)(iii) applies, may submit a valid application to the Revenue Commissioners to have sections 864 and 865 apply, in respect of the chargeable period, as if any thing done pursuant to sections 864 and 865 or required to be done pursuant to sections 864 and 865 by or for the ceased company, were, as appropriate—
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(I) a thing done pursuant to sections 864 and 865, or
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(II) a thing required to be done pursuant to sections 864 and 865,
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by or for a group repayment company, nominated in writing by the group parent company, or the successor group parent company where paragraph (b)(iii) applies.
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(4) For the purposes of this section, an application submitted by the group parent company or the successor group parent company, as the case may be, shall be regarded as a valid application where all the information which the Revenue Commissioners may reasonably require to enable them to determine whether the conditions provided for in paragraphs (a) and (b) of subsection (3) have been satisfied is contained in the application.
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(5) Where, following receipt of a valid application, the Revenue Commissioners are of the opinion that in order to give effect to the correlative adjustment or the mutual agreement reached, it would be appropriate for sections 864 and 865 to apply, in respect of the chargeable period, as if any thing done pursuant to sections 864 and 865 or required to be done pursuant to sections 864 and 865 by or for the ceased company were, as appropriate—
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(a) a thing done pursuant to sections 864 and 865, or
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(b) a thing required to be done pursuant to sections 864 and 865,
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by or for the group repayment company, then—
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(i) sections 864 and 865 shall apply on that basis,
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(ii) the Revenue Commissioners shall notify—
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(I) the group parent company or the successor group parent company, as the case may be, and
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(II) where it is a different company, the group repayment company,
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that sections 864 and 865 shall apply on that basis, and
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(iii) the ceased company shall not be entitled to a repayment of tax for the chargeable period arising from the correlative adjustment or the mutual agreement reached, as the case may be.
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(6) The amount of any repayment of tax or part repayment of tax to be made to a group repayment company under this section shall not exceed the total amount that would have been made to a ceased company if it had not ceased to exist.
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(7) 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 the Revenue Commissioners, and references in this section to the Revenue Commissioners shall with any necessary modifications be construed as including references to an officer so nominated.
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(8) This section shall not apply where it would be reasonable to consider that the main purpose, or one of the main purposes, of the ceased company ceasing to exist is to secure a repayment of tax or part repayment of tax under this section.
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(9) This section shall only apply where a repayment of tax arises in relation to—
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(a) a correlative adjustment in respect of which a determination has been made under section 864, or
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(b) a mutual agreement reached,
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on or after the date of the passing of the Finance Act 2024.”.
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