628A Deferral of exit tax

(1) In this section—

“chargeable period” means a year of assessment or an accounting period, as the case may be;

“disposal of assets” means a disposal of migrated assets;

“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by all subsequent amendments to that Agreement;

“EEA State” means a state which is a contracting party to the EEA Agreement;

“electronic means” has the meaning assigned to it in section 917EA(1);

“migrated assets” means the assets of a migrating company, the chargeable gain on the deemed disposal of which was taken into account in determining the amount of relevant tax;

“migrating company” means a company which ceases to be resident in the State and becomes resident, under the law of a relevant territory, in that territory for the purposes of tax;

“migration date” means the date, on or after 1 January 2014, on which a company ceases to be resident in the State;

“relevant event” means—

(a) the appointment of a liquidator to the migrating company,

(b) any event under the law of a relevant territory corresponding to the event specified in paragraph (a),

(c) the migrating company ceasing to be resident, under the law of a relevant territory, in that territory for the purposes of tax, and not becoming so resident in another relevant territory for that purpose, or

(d) any failure to pay relevant tax by the date that it becomes due and payable;

“relevant period”, in respect of which a statement under paragraph (b) of subsection (4) is to be made, is the calendar year immediately preceding the 21-day period in which the statement is to be made, except that in respect of the first such statement of the 5 or 9 statements, as the case may be, referred to in that subsection, such period shall be the period commencing at the migration date and ending on the last day before the beginning of the calendar year in respect of which the next such statement is to be made;

“relevant tax” means tax payable, other than tax in respect of the amount of any postponed gain under section 628, which but for section 627 would not be payable by a migrating company for a chargeable period;

“relevant territory” means a Member State (other than the State) or an EEA State;

“specified date” means—

(a) in relation to corporation tax, the last day of the period of 9 months starting on the day immediately following the migration date, but in any event not later than day 23 of the month in which that period of 9 months ends, or

(b) in relation to capital gains tax payable in respect of a year of assessment in which the migration date occurs, 31 October in the tax year following that year;

“tax”, in relation to a relevant territory other than the State, means any tax imposed in that territory which corresponds to income tax or corporation tax.

(2) Subject to the provisions of this section, a migrating company may elect to pay relevant tax—

(a) in 6 equal instalments at yearly intervals, the first instalment of which shall be due and payable on the specified date, and the remaining 5 instalments shall be due and payable respectively on each of the next 5 anniversaries of the specified date, or

(b) not later than 60 days after the date of disposal of assets.

(3) Where a migrating company makes an election to pay relevant tax—

(a) in accordance with paragraph (a) of subsection (2), relevant tax shall be payable in 6 equal instalments at yearly intervals in accordance with that paragraph, or

(b) in accordance with paragraph (b) of subsection (2)—

(i) so much of the relevant tax shall be paid on the disposal of assets by the company as bears the same proportion to the relevant tax as the chargeable gains, computed on the deemed disposal of those assets at the migration date, bears to the aggregate of the chargeable gains computed on the deemed disposal of the assets by the company at the migration date, and

(ii) any relevant tax which is not due and payable within a period of 10 years from the migration date, shall be deemed to become due and payable on the tenth anniversary of the migration date.

(4) (a) An election under subsection (2) shall—

(i) be made in the return under section 959I—

(I) where the relevant tax is corporation tax, for the accounting period which ends on the migration date for the company, or

(II) where the relevant tax is capital gains tax, for the year of assessment in which the migration date for the company occurs,

and that return shall be made by electronic means (in accordance with Chapter 6 of Part 38);

(ii) specify—

(I) the date on which the company ceased to be resident in the State,

(II) the relevant territory in which the migrating company has become resident,

(III) the amount of the relevant tax, and

(IV) whether the election is being made to pay relevant tax in accordance with paragraph (a) or (b) of subsection (2);

and

(iii) provide such other information as may be required by the Revenue Commissioners for the purposes of this section.

(b) Where an election is made to pay relevant tax in accordance with—

(i) subsection (2)(a), the migrating company shall within 21 days of the end of each of the 5 calendar years which follow the year in which the migration date occurs, or

(ii) subsection (2)(b), the migrating company shall within 21 days of the end of each of the 9 calendar years which follow the year in which the migration date occurs,

deliver to the Revenue Commissioners a statement, notwithstanding that the migrating company has not received a notice to prepare and deliver such a statement, by such electronic means and in such form and format as the Revenue Commissioners may specify, in respect of the relevant period, for the purposes of relevant tax—

(I) specifying whether the company is treated under the laws of a relevant territory as resident for the purposes of tax in that territory throughout that relevant period,

(II) where the company has made an election to pay relevant tax in accordance with subsection (2)(b)—

(A) stating whether any relevant tax became due and payable during that relevant period,

(B) specifying the amount of that tax, the amount of the related interest charge and whether that tax and interest has been paid, and

(C) setting out the computation of that tax and interest, in accordance with subsections (3)(b)(i) and (6),

and

(III) providing such other information as may be required by the Revenue Commissioners for the purposes of this section.

(5) Notwithstanding subsections (2) and (3) if, at any time within 10 years of the migration date, a relevant event occurs, then any amount of relevant tax which has not been paid at the time of the relevant event, and any interest charged on that amount in accordance with subsection (6), shall become due and payable on the occurrence of the relevant event.

(6) (a) Where relevant tax becomes due and payable at any time under this section, simple interest shall be payable on the amount of that relevant tax and shall be calculated, from the specified date until payment, for any day or part of a day during which the amount of relevant tax remains unpaid, at the prevailing rate specified in the Table to subsection (2)(c)(ii) of section 1080, and such interest shall be due and payable when the relevant tax concerned is due and payable.

(b) Interest charged on the relevant tax shall be added to each of the instalments mentioned in subsection (2)(a) or, where subsection (2)(b), (3)(b)(ii) or (5) applies, added to the amount of relevant tax, and shall be paid at the same time as such instalment is due or at the same time as relevant tax is payable in accordance with subsection (2)(b), (3)(b)(ii) or (5), as the case may be.

(7) The Revenue Commissioners may, where it appears to them that the deferral of tax would otherwise present a serious risk to collection of the tax, require a migrating company which has made an election under subsection (2) to give security, or further security, of such amounts and in such form and manner as they may determine, for the payment of relevant tax, within 30 days from the date of service on the company of a notice in writing.

(8) All amounts of relevant tax and interest shall be paid to the Collector-General.

(9) Any amount of relevant tax and interest payable in accordance with this section shall be payable without the making of an assessment.

(10) (a) The Collector-General may, at any time before the end of the period beginning with the date on which that tax was due and payable by reference to this section and ending 3 years after the time when a statement under subsection (4)(b), specifying the amount of that tax, is made and delivered to the Collector-General, serve on—

(i) a company which is, or during the period of 12 months ending with the date when relevant tax became due and payable was, a member of the same group (within the meaning of section 629(1)) as the migrating company, or

(ii) a person who is, or during the period mentioned in subparagraph (i) was, a controlling director (within the meaning of section 629(1)) of the migrating company or of a company which has, or within that period had, control over the migrating company,

a notice—

(I) stating the amount which remains unpaid of the relevant tax payable by the migrating company and the date on which the tax became due and payable, and

(II) requiring the company referred to in subparagraph (i) or the person referred to in subparagraph (ii), as the case may be, to pay that amount within 30 days of service of the notice,

and in the event of the serving of such notice the amount referred to in subparagraph (I) shall be so payable by the company or person concerned, as the case may be.

(b) Any amount which a person is required to pay by a notice under this subsection may be recovered from the person as if it were tax due by such person, and such person may recover any such amount paid on foot of a notice under this section from the migrating company.

(c) A payment in pursuance of a notice under this subsection shall not be allowed as a deduction in computing income, profits or losses for any tax purposes.

(11) Without prejudice to the provisions of this section, the provisions of the Corporation Tax Acts and the Capital Gains Tax Acts, as appropriate, relating to the collection and recovery of corporation tax, capital gains tax, and interest, shall apply, with any necessary modifications, to the collection and recovery of relevant tax and interest payable in accordance with this section as they apply to any other corporation tax, capital gains tax, and interest.