Revenue Note for Guidance

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Revenue Note for Guidance

1014 Tax treatment of profits, losses and capital gains arising from activities of a European Economic Interest Grouping (EEIG)

Summary

This section provides for the tax treatment of profits or losses resulting from the activities of European Economic Interest Groupings (EEIGs). An EEIG is a form of business entity established under EU Council Regulation 2137/85 of 25 July 1985 and can be set up by residents (individuals, companies, trusts, etc) or two or more EU Member States. The Regulation requires that profits or losses resulting from the activities of a grouping are to be taxable only in the hands of its members (that is, the EEIG itself is not to be charged to tax). To conform with the EU regulation, the section applies the partnership provisions of this Part to the activities of EEIGs so that profits, losses and capital gains of an EEIG are attributed to its members who are then to be chargeable or allowed relief, as the case may be, on their respective share.

Details

(1) An EEIG (referred to in the section as a “grouping”) is defined by reference to the European and Irish Regulations governing EEIGs, that is —

  • Council Regulation (EEC) No. 2137/85 of 25 July 1985 on the European Economic Interest Grouping (EEIG), and
  • The European Communities (European Economic Interest Groupings) Regulations, 1989 (S.I. No 191 of 1989).

(2) An EEIG is not to be charged to income tax, corporation tax or capital gains tax in respect of profits, gains or chargeable gains arising to it, nor entitled to loss relief, but, instead, the profits, gains or chargeable gains arising to, or losses resulting from, the activities of the EEIG are to be charged or relieved in the hands of the members of the EEIG in accordance with the provisions of the section.

(3) & (4) The provisions of the Part, other than sections 1009, 1010(8) and 1013, apply with specified modifications and any other necessary modifications so as to treat EEIGs on the same basis as partnerships engaged in a trade or profession.

Relevant Date: Finance Act 2019