Taxes Consolidation Act, 1997 (Number 39 of 1997)
246 Interest payments by companies and to non-residents.
[FA74 s31; CTA76 s140(1) and Sch2 PtI par42; FA88 s38; FA96 s33(1) and s132(2) and Sch5 PtII; FA97 s36]
(1) In this section—
[13]>
[1]>
“a collective investment undertaking” means—
(a) a unit trust scheme which is or is deemed to be an authorised unit trust scheme (within the meaning of the Unit Trusts Act, 1990) and which has not had its authorisation under that Act revoked,
(b) any other undertaking which is an undertaking for collective investment in transferable securities within the meaning of the relevant Regulations (within the meaning of section 734) being an undertaking which holds an authorisation, which has not been revoked, issued pursuant to the relevant Regulations,
(c) a limited partnership which—
(i) has as its principal business, as expressed in the partnership agreement establishing the limited partnership, the investment of its funds in property, and
(ii) has been authorised to carry on that business, under any enactment providing for such authorisation, by the Central Bank of Ireland and which has not had its authorisation under such enactment revoked,
and
(d) any authorised investment company (within the meaning of Part XIII of the Companies Act, 1990)—
(i) which has not had its authorisation under that Part of that Act revoked, and
(ii) (I) which has been designated in that authorisation as an investment company which may raise capital by promoting the sale of its shares to the public and has not ceased to be so designated, or
(II) where all the holders of units are collective investors;
“collective investor” has the same meaning as in section 734(1);
<[1]
<[13]
[13]>
“bank” includes building society within the meaning of section 256(1);
<[13]
“company” means any body corporate;
[14]>
[2]>
“relevant person” means—
(a) a company, or
(b) a collective investment undertaking;
<[2]
<[14]
[14]>
“investment undertaking” means—
(a) a unit trust mentioned in section 731(5)(a),
(b) a special investment scheme within the meaning given to it in section 737, [20]>or<[20]
(c) an investment undertaking within the meaning given to it in [21]>section 739B;<[21][21]>section 739B, [36]>or<[36]<[21]
[22]>
(d) a common contractual fund within the meaning given to it in section 739I [37]>(inserted by the Finance Act 2005);<[37][37]>(inserted by the Finance Act 2005), or<[37]
<[22]
[38]>
(e) an investment limited partnership within the meaning of section 739J;
<[38]
“relevant person” means—
(a) a company, or
(b) an investment undertaking;
<[14]
“relevant security” means a security issued by a company [3]>on or before the 31st day of December, 2005<[3][3]>in the course of carrying
on relevant trading operations within the meaning of section 445 or 446<[3], on terms which oblige the company to redeem the security within a period of 15 years after the date on which the security was [4]>issued.<[4][4]>issued;<[4]
[5]>
“relevant territory” means—
(a) a Member State of the European Communities other than the State, [25]>or<[25]
(b) not being such a Member State, a territory with the government of which arrangements having the force of law by virtue of [19]>section 826<[19][24]>[19]>section 826(1)(a)<[19]<[24][24]>section 826(1)<[24] [26]>have been [26]>have been made, or<[26][10]>made.<[10][10]>made;<[10]<[26]
<[5]
[27]>
(c) not being a territory referred to in paragraph (a) or (b), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;
<[27]
[11]>
“tax”, in relation to a relevant territory, means any tax imposed in such territory which corresponds to income tax or corporation tax in the State.
<[11]
(2) Where any yearly interest charged with tax under Schedule D is paid—
(a) by a company, otherwise than when paid in a fiduciary or representative capacity, to a person whose usual place of abode is in the State, or
(b) by any person to another person whose usual place of abode is outside the State,
the person by or through whom the payment is made shall on making the payment deduct out of the payment a sum representing the amount of the tax on the payment at the standard rate in force at the time of the payment, and subsections (1) and (3) to (5) of section 238 shall apply to such payments as they apply to payments specified in subsection (2) of that section.
(3) Subsection (2) shall not apply to—
(a) interest paid in the State on an advance from a bank carrying on a bona fide banking business in the State,
(b) interest paid by such a bank in the ordinary course of such business,
[39]>
[15]>
(bb) interest paid in the State by a company to another company, being a company to which paragraph (a) of subsection (5) applies, for so long as that other company is a company to which that paragraph applies,
<[15]
<[39]
[39]>
(bb) interest paid in the State—
(i) by a company to another company, being a company to which paragraph (a) of subsection (5) applies, for so long as that other company is a company to which that paragraph applies, or
(ii) by a company (in this paragraph referred to as the “first-mentioned company”) to which subparagraphs (i) and (ii) of subsection (5)(a) apply to another company resident in the State where that other company is deemed to be a member of the same group of companies as the first-mentioned company and for this purpose the provisions of subsection (1) of section 411 shall apply to determine whether companies are deemed to be members of the same group of companies as if references in that subsection to a 75 per cent subsidiary were references to a 51 per cent subsidiary,
<[39]
[23]>
(bbb) interest paid in the State to an investment undertaking within the meaning of section 739B,
<[23]
[33]>
(c) interest paid to a person whose usual place of abode is outside the State by—
(i) a company in the course of carrying on relevant trading operations within the meaning of section 445 or 446, or
(ii) a specified collective investment undertaking within the meaning of section 734,
<[33]
[33]>
(c) interest paid to a person whose usual place of abode is outside the State—
(i) in respect of a relevant security, or
(ii) by a specified collective investment undertaking within the meaning of section 734,
<[33]
[17]>
(cc) interest paid in the State to a qualifying company (within the meaning of section 110),
(ccc) interest paid by a qualifying company (within the meaning of section 110) to a person who, by virtue of the law of a relevant territory, is resident for the purposes of tax in the relevant territory, except, in a case where the person is a company, where such interest is paid to the company in connection with a trade or business which is carried on in the State by the company through a branch or agency,
<[17]
(d) interest paid by a company authorised by the Revenue Commissioners to pay interest without deduction of income tax,
[40]>
(da) interest paid to the Strategic Banking Corporation of Ireland or a subsidiary wholly owned by it or a subsidiary wholly owned by any such subsidiary,
(db) interest paid by the Strategic Banking Corporation of Ireland or a subsidiary wholly owned by it or a subsidiary wholly owned by any such subsidiary,
<[40]
(e) interest on any securities in respect of which the Minister for Finance has given a direction under section 36,
[28]>
(ea) interest paid to—
(i) the National Asset Management Agency or a company referred to in section 616(1)(g),
(ii) the State acting through the National Asset Management Agency or through a company referred to in section 616(1)(g), or
(iii) the National Treasury Management Agency by the National Asset Management Agency or by a company referred to in section 616(1)(g),
<[28]
[29]>
(eb) interest paid by—
(i) the National Asset Management Agency,
(ii) a company referred to in section 616(1)(g), or
(iii) the State acting through the National Asset Management Agency, or through a company referred to in section 616(1)(g),
to a person who, by virtue of the law of a relevant territory, is resident for the purposes of tax in the relevant territory, except, in a case where the person is a company, where such interest is paid to the company in connection with a trade or business which is carried on in the State by the company through a branch or agency,
<[29]
[41]>
(ec) interest paid to—
(i) the National Treasury Management Agency,
(ii) the State acting through the National Treasury Management Agency, or
(iii) a Fund investment vehicle (within the meaning of section 37 of the National Treasury Management Agency (Amendment) Act 2014) of which the Minister for Finance is the sole beneficial owner,
(ed) interest paid by a Fund investment vehicle (within the meaning of section 37 of the National Treasury Management Agency (Amendment) Act 2014) of which the Minister for Finance is the sole beneficial owner,
<[41]
(f) interest paid without deduction of tax by virtue of [6]>section 700, or<[6][6]>section 700,<[6]
[34]>
(fa) interest paid in the State to an exempt approved scheme within the meaning of section 774,
<[34]
(g) interest which under section 437 is a [7]>distribution.<[7][7]>distribution, or<[7]
[30]>
[8]>
(h) interest, other than interest referred to in paragraphs (a) to (g), paid by a relevant person in the ordinary course of a trade or business carried on by that person to a company [12]>resident in a relevant territory<[12][12]>which, by virtue of the law of a relevant territory, is resident for the purposes of tax in the relevant territory,<[12] except where such interest is paid to that company in connection with a trade or business which is carried on in the State by that company through a branch or agency.
<[8]
<[30]
[30]>
(h) interest, other than interest referred to in paragraphs (a) to (g), paid by a relevant person in the ordinary course of a trade or business carried on by that person to a company—
(I) which, by virtue of the law of a relevant territory, is resident in the relevant territory for the purposes of tax and that relevant territory imposes a tax that generally applies to interest receivable in that territory by companies from sources outside that territory, or
(II) where the interest—
(A) is exempted from the charge to income tax under arrangements made with the government of a territory outside the State having the force of law under the procedures set out in section 826(1), or
(B) would be exempted from the charge to income tax if arrangements made, on or before the date of payment of the interest, with the government of a territory outside the State, that do not have the force of law under the procedures set out in section 826(1), had the force of law when the interest was paid,
except where such interest is paid to that company in connection with a trade or business which is carried on in the State by that company through a branch or agency.
<[30]
[31]>
(4) In relation to interest paid in respect of a relevant security subsection (3)(c) shall apply—
[9]>
(a) as if there were deleted from subsection (2) of section 445 “, and any certificate so given shall, unless it is revoked under subsection (4), (5) or (6), remain in force until the 31st day of December, 2005”, and
(b) as if there were deleted from subsection (2) of section 446 “, and any certificate so given shall, unless it is revoked under subsection (4), (5) or (6), remain in force until the 31st day of December, 2005”.
<[9]
[9]>
(a) as if in section 445 the following subsection were substituted for subsection (2) of that section:
“(2) Subject to subsections (7) and (8), the Minister may give a certificate certifying that such trading operations of a qualified company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purposes of this section.”,
and
(b) as if in section 446 the following subsection were substituted for subsection (2) of that section:
“(2) Subject to subsections (7) and (9), the Minister may give a certificate certifying that such trading operations of a company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purposes of this section.”.
<[9]
<[31]
[35]>
[31]>
(4) Where subsection (2) would not apply to interest paid to a person whose usual place of abode is outside the State by virtue of subsection (3) but for the fact that—
(a) sections 445 and 446 have been deleted, and
(b) those sections referred to time limits in respect of certificates to which each section related,
then, notwithstanding those deletions and time limits, subsection (2) shall not apply to such interest and the other provisions of this section shall apply with any modifications necessary to give effect to this subsection.
<[31]
<[35]
[16]>
(5) (a) This paragraph shall apply to a company—
(i) which advances money in the ordinary course of a trade which includes the lending of money,
(ii) in whose hands any interest payable in respect of money so advanced is taken into account in computing the trading income of the company, and
(iii) which—
(I) has notified in writing [32]>the appropriate inspector to whom the company makes the return referred to in section 951<[32][32]>the appropriate inspector<[32] that it meets the requirements of subparagraphs (i) and (ii), and
(II) (A) has notified the first company referred to in subsection (3)(bb) in writing that it is a company which meets those requirements and that it has made the notification referred to in subparagraph (iii)(I), and
(B) has provided the first company referred to in subsection (3)(bb) with its tax reference number (within the meaning of section 885).
(b) A company which is no longer a company to which paragraph (a) applies shall, upon that paragraph ceasing to apply to it, immediately notify in writing the inspector referred to in subparagraph (iii)(I) of paragraph (a) and the company referred to in subparagraph (iii)(II) accordingly.
<[16]
[10]
Substituted by FA00 s66(1)(a). This section shall apply as on and from 10 February 2000.
[12]
Substituted by FA00 s66(1)(b). This section shall apply as on and from 10 February 2000.
[13]
Substituted by FA01 s37(1)(b)(i). This section shall apply as respects interest paid on or after the date of 30 March 2001
[14]
Substituted by FA01 s37(1)(b)(ii). This section shall apply as respects interest paid on or after the date of 30 March 2001
[15]
Inserted by FA02 s19(1)(a). This section applies as respects interest paid on or after the date of the passing of the Finance Act, 2002.
[16]
Inserted by FA02 s19(1)(b). This section applies as respects interest paid on or after the date of the passing of the Finance Act, 2002.
[19]
Substituted by FA04 sched3(1)(i). This section shall have effect as on and from the passing of this Act. FA04 25 March 2004
[24]
Substituted by FA07 sched2(1)(i). Has effect as on and from the passing of this Act. FA07 2 April 2007
[25]
Deleted by F(No.2)A08 s33(e)(i). This section is deemed to have come into force and takes effect as on and from 1 January 2009.
[26]
Substituted by F(No.2)A08 s33(e)(i). This section is deemed to have come into force and takes effect as on and from 1 January 2009.
[27]
Inserted by F(No.2)A08 s33(e)(ii). This section is deemed to have come into force and takes effect as on and from 1 January 2009.
[36]
Deleted by FA13 s42(1)(a). Applies in respect of an investment limited partnership that has been granted an authorisation under section 8 of the Investment Limited Partnerships Act 1994 on or after 13 February 2013.
[37]
Substituted by FA13 s42(1)(a). Applies in respect of an investment limited partnership that has been granted an authorisation under section 8 of the Investment Limited Partnerships Act 1994 on or after 13 February 2013.
[38]
Inserted by FA13 s42(1)(a). Applies in respect of an investment limited partnership that has been granted an authorisation under section 8 of the Investment Limited Partnerships Act 1994 on or after 13 February 2013.
[40]
Inserted by SBCoIA14 part7(1)(c). Does not apply in circumstances where the Minister does not hold all of the shares in the SBCI.