Revenue Tax Briefing

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Revenue Tax Briefing Issue 37, October 1999

Irish Registered non-Resident Companies – Update

Introduction

A number of significant changes to the tax treatment and reporting requirements of Irish incorporated companies were enacted in Sections 82, 83 and 84 Finance Act 1999. Separate amendments to the Companies Act 1990 are provided for in the Companies (Amendment) (No. 2) Bill, 1999 in relation to company registration requirements and the circumstances in which a company may be struck-off. The Companies Act provisions have yet to be enacted.

The package of tax and company law measures is designed to tackle the problem of Irish registered non-resident companies - i.e. companies registered with the Irish Companies Registration Office but whose place of management and control is outside Ireland and therefore not resident in Ireland for tax purposes.

Date(s) from which the changes Apply

The changes in relation to the rules apply as follows:

New Companies - companies incorporated in Ireland on or after 11 February 1999, new rules apply from 11 February 1999

Existing Companies - companies incorporated in Ireland prior to 11 February 1999, new rules apply from 1 October 1999

Residence of companies

Prior to the FA 1999 changes, the principal test of residence of a company was the place where the company was managed and controlled. The phrase “managed and controlled” means the place where the directors hold their meetings - there are, of course, other factors to be considered in determining the place where the company is managed and controlled. The “old” Rules for determining residence [i.e. “managed and controlled”]continue to apply, subject to the changes made by Section 82 FA 1999.

Section 82 FA 1999 introduced a new Section 23A to the TCA 1997 dealing with company residence. It provides that where a company is incorporated in the State it shall be regarded for the purposes of Income Tax, Corporation Tax and Capital Gains Tax as resident in the State.

This provision does not apply, however, if:

  • The company or a related company [i.e. one company is a 50% subsidiary of the other company or both companies are 50% subsidiaries of a third company] carries on a trade in Ireland, and is:
    • either under the control, directly or indirectly, of persons resident in a EU Member State or country with which Ireland has a Double Taxation Agreement,
    • or quoted on a recognised stock exchange in a EU Member State or country with which Ireland has a Double Taxation Agreement
    OR
  • The company is regarded under a Double Taxation Agreement as resident in another country and not resident in Ireland.

Interaction with Corporation Tax charge

Companies incorporated in the State on or after 11 February 1999 are Irish resident for tax purposes from that date subject to the exceptions outlined above.

Companies incorporated in the State before 11 February 1999 and which become resident in Ireland on 1 October 1999 will be chargeable to Irish tax on profits earned from that date if still incorporated here at that time.

Reporting Requirements

Particulars to be furnished by Companies

Section 83 FA 1999 amends Section 882 TCA 1997 by providing for additional particulars to be supplied by companies.

Section 882 (as amended) provides that every company which is incorporated in the State or which commences to carry on a trade, profession or business in the State shall within 30 days of:

  • Commencing to carry on a trade, profession or business, wherever carried on
  • The date at which there is a material change in information previously delivered
  • The giving of a notice by an Inspector requiring a statement under Section 882 TCA 1997

deliver to Revenue a statement in writing containing certain particulars in respect of the company.

The particulars required to be returned are as follows:

Resident companies

The information to be supplied includes the company’s name and address and that of its secretary together with details as to the place and nature of its business.

Incorporated but non-resident

Companies which are incorporated in the State but non-resident due to the exceptions as set out in Section 82 must provide the following information:

  • The country of residence
  • Where they are treated as being non-resident because they are controlled by persons resident in a EU or tax treaty country and the company or a related company is carrying on a trade in the State, they must identify the name and address of the company
  • Where under a Double Taxation Agreement they are not regarded as resident they must
    • where the company is controlled by a quoted company, give the name and address of the registered office of the quoted company
    • in any other case, give the names and addresses of the individuals who beneficially own the company

Companies not incorporated nor resident in the State

Similar provisions apply to companies which are not incorporated in the State nor resident in the State. These include:

  • The address of the company’s principal place of business in the State
  • The name of the company’s representative in the State
  • The date of commencement of the company’s trade, profession or business in the State.

Form 11F CRO - Statement of Particulars has been redesigned and sets out the particulars to be delivered by new and existing companies incorporated in the State.

Forms 11F CRO and Notes are available from the Revenue Forms & Leaflets Service at 01 - 878 0100.

Failure to furnish particulars to Revenue

Forms 11F CRO - Statement of Particulars have issued to companies incorporated in the State from 11 February 1999 but which have not registered for tax. The forms must be returned within the 30 day time limit. Revenue will notify the Registrar of Companies of failures to deliver a statement of particulars required to be delivered under section 882 TCA 1997.

Penalty provisions

Section 84 FA 1999 provides for penalties where a company fails to supply the information required under Section 882 TCA 1997.

Where a company fails to pay certain penalties they may be recovered from the company secretary or, where the company secretary is not an Irish resident individual, from an Irish resident director of the company. Such penalties are in addition to any penalty for which the company secretary himself/herself is liable.

Further Information

The issuing and processing of statements of particulars will be dealt with centrally by the Taxes Central Registration Office, 9/10 Upper O’Connell St., Dublin 1, telephone: 01 - 874 6821.