518 Costs of establishing profit sharing schemes

Summary

The cost of establishing an approved profit sharing scheme is allowable as a deduction for corporation tax purposes.

Details

(1) & (2) The cost incurred on or after 10 May, 1997, in establishing a profit sharing scheme approved of by the Revenue Commissioners in accordance with Part 2 of Schedule 11 is an allowable deduction in computing the profits or gains of a trade carried on by that company.

In the case of an investment company or an assurance company, any sums expended on or after 10 May, 1997, in establishing an approved profit sharing scheme, may be added to its expenses of management for the purpose of providing relief to such a company in respect of the sums in question.

(3) This applies provided the trustees have not acquired any shares before the approval is given. If the approval of the scheme is given later than 9 months after the end of the accounting period in which the sum is expended, then the costs are treated as incurred in the accounting period in which the approval is given and not in the accounting period in which the costs are actually incurred.

Relevant Date: Finance Act 2019