629. Deferral of exit tax

(1) In this section—

"2010 Directive" means Council Directive 2010/24/EU of 16 March 20101 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures;

"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 the Protocol signed at Brussels on 17 March 1993;

"electronic means" has the meaning assigned to it in section 917EA;

"migrated assets" means the assets the chargeable gain on the deemed disposal of which was taken into account in determining the amount of tax;

"migration date" means the date on which a disposal is deemed to have been made by virtue of section 627(2);

"relevant period", in respect of which a statement under paragraph (b) of subsection (5) 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 statement of the 5 statements referred to in that subsection, such period shall be the period commencing on the migration date and ending on the last day before the beginning of the calendar year in respect of which the next statement is to be made;

"relevant territory" means a Member State (other than the State) or a third country which is a party to the EEA Agreement that has concluded an agreement with the State or the European Union equivalent to the mutual assistance provided for in the 2010 Directive;

"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 relevant event, 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 relevant event occurs, 31 October in the tax year following that year.

(2) Subject to the provisions of this section, a company which is chargeable to tax may elect to pay that tax in 6 equal instalments at yearly intervals, the first instalment of which shall be due and payable on the specified date, and the remaining instalments shall be due and payable respectively on each of the next 5 anniversaries of the specified date.

(3) Subsection (2) shall not apply to assets referred to in section 627(2) which have been transferred to a third country unless that country is a party to the EEA Agreement and has concluded an agreement with the State or the European Union equivalent to the mutual assistance provided for in the 2010 Directive.

(4) Where an election is made to pay tax in accordance with subsection (2), that tax shall be payable in 6 equal instalments at yearly intervals in accordance with that subsection.

(5) (a) An election under subsection (2) shall:

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

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

(II) where the 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 migration date,

(II) the relevant territory to which the migrated assets were transferred,

(III) the amount of tax, and

(IV) that an election is being made to pay tax in accordance with section 629(2) of the Taxes Consolidation Act 1997;

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 tax in accordance with subsection (2), the company concerned shall within 21 days of the end of each of the 5 calendar years which follow the year in which the migration date occurs deliver to the Revenue Commissioners a statement, notwithstanding that the 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 tax—

(i) specifying whether the company is treated under the laws of a relevant territory as resident for the purposes of income tax or corporation tax (or any tax imposed in that territory which corresponds to income tax or corporation tax) in that territory throughout that relevant period, and

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

(6) Notwithstanding subsections (2) and (4), if, with respect to the company referred to in section 627(2), any of the events specified in subsection (7) occurs, then any amount of tax which has not been paid at the time of the event, and any interest charged on that amount in accordance with subsection (9), shall become due and payable on the occurrence of that event.

(7) Each of the following is an event referred to in subsection (6):

(a) the assets referred to in section 627(2) are sold or otherwise disposed of;

(b) the assets referred to in section 627(2) are transferred to a third country, but this is subject to subsection (8);

(c) the company ceases to be resident in a Member State and becomes resident in a third country or the business carried on by a permanent establishment of the company is transferred to a third country, but this is subject to subsection (8);

(d) the company becomes insolvent or a liquidator is appointed to the company; or

(e) the company fails to pay the instalments referred to in subsection (2) on the due date and this failure has not been rectified within 12 months of that date.

(8) A reference in subsection (7)(b) or (c) to a third country does not include a reference to a third country that is a party to the EEA Agreement if it has concluded an agreement with the State or the European Union equivalent to the mutual assistance provided for in the 2010 Directive.

(9) (a) Where tax becomes due and payable at any time under this section, simple interest shall be payable on the amount of that tax and shall be calculated, from the specified date until the date of payment, for any day or part of a day during which the amount of 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 tax concerned is due and payable.

(b) Interest charged on tax shall be added to each of the instalments referred to in subsection (2) and shall be paid at the same time as such instalment is due.

(10) The Revenue Commissioners may, where it appears to them that the deferral of tax would otherwise present a serious risk to collection of that tax, require a 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 tax, within 30 days from the date of service on the company of a notice in writing.

(11) Subsection (10) shall not apply to a company to which section 629A applies.

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

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

(14) (a) The Collector-General may, at any time before the end of the period beginning with the date on which tax was due and payable by reference to this section and ending 3 years after the time when a statement under subsection (5)(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 tax became due and payable, was a member of the same group (within the meaning of section 629A(1)) as a company to which section 627(2) applies, or

(ii) a person who is, or during the period mentioned in subparagraph (i) was, a controlling director (within the meaning of section 629A(1)) of a company to which section 627(2) applies,

a notice—

(I) stating the amount which remains unpaid of the tax payable 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 company concerned.

(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.

(15) 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 tax and interest payable in accordance with this section as they apply to any other corporation tax, capital gains tax, and interest.