884 Returns of profits

Summary

A company may be required by notice served on it by an inspector or other officer of the Revenue Commissioners to make a return of its profits. The return must detail the profits from each source of income, charges, annual payments, distributions, management expenses, payments received under deduction of tax and all disposals and acquisitions of assets in the accounting period. If the company fails to make this return or makes an unsatisfactory return, an authorised officer may inspect, and take copies of or extracts from, the company’s accounts, books and records.

Section 951I and Section 951K should be consulted as regards the making of a return for Self Assessment purposes.

Details

(1) “return” includes any statement, declaration or list.

(2) By the serving of a notice by an inspector or other officer of the Revenue Commissioners, a company may be required within the time specified by the notice to deliver a return of —

• the profits of the company, specifying the income from each source, detailing all disposals giving rise to chargeable gains or allowable losses, and giving particulars of charges on income,
• such information, accounts, statements, reports and further particulars relevant to the tax liability of the company or to the application of the Corporation Tax Acts to the company as may be required by the notice or specified in the prescribed form in respect of the return,
• distributions received from resident companies,
• annual payments made by the company from income not brought into charge to tax, and
• loans to participators in a close company that are treated as an annual payments.

(2)(A) The accounts which are to be included with a return are the accounts that are required by the notice to file the return, or as are specified in the prescribed form, of the return, including any documents annexed to the accounts, as well as any supporting information, statements, reports, or further particulars, which contain sufficient information to enable the chargeable profits of the company to be determined.

(3) A share for share exchange in the course of a company amalgamation or reconstruction is not normally regarded as a disposal of shares giving rise to a chargeable gain or allowable loss. However, for the purposes of this section, such a disposal must be returned.

(4) The notice may require a return of profits for any period during which the company was within the charge to corporation tax, including particulars of distributions received in that period from resident companies.

(5) Each return must include a declaration stating the return is correct and complete.

(6) The return must show the amount of income tax, if any, deducted from payments received by the company.

(7) The return may also require the inclusion of details of management expenses, capital allowances and balancing charges which have been taken into account in determining the profits included in the return.

(8) The return must give the details on the acquisition of assets acquired during the accounting period that are required to be given under the capital gains tax legislation.

(9)(a) & (b) Where the company fails to deliver the return, or if the inspector is not satisfied with the return, an authorised officer (being an inspector or other Revenue officer authorised by the Revenue Commissioners in writing to exercise the powers conferred by this provision) may serve a notice or notices on the company requiring the company —

• to deliver to the inspector/authorised officer within the time specified in the notice copies of accounts (including balance sheets) of the company and a copy of the auditor’s certificate in appropriate cases, and
• to make all books, accounts and documents in the possession or procurement of the company, which contain information as to profits, assets or liabilities of the company, available for inspection within a specified time.

(9)(c) The inspector or authorised officer may take copies, or extracts from those books, accounts and documents.

Relevant Date: Finance Act 2019