Section 77 Miscellaneous special rules for computation of income

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(1) For the purposes of corporation tax, income tax law as applied by section 76 shall apply subject to subsections (2) to (7).

What other income tax rules apply in computing income for corporation tax purposes?

(1) Although income tax law applies in computing your company's profits for corporation tax purposes, its application is governed by the additional rules in (2)-(7).

(2)(a) Where a company begins or ceases to carry on a trade, or to be within the charge to corporation tax in respect of a trade, the company's income shall be computed as if that were the commencement or, as the case may be, discontinuance of the trade, whether or not the trade is in fact commenced or discontinued.

(b) Notwithstanding paragraph (a), where any provision of the Income Tax Acts is applied for corporation tax by the Corporation Tax Acts, this subsection shall not apply for any purpose of that provision if under any enactment a trade is not to be treated as permanently discontinued for the corresponding income tax purpose.

Do the income tax rules which allow a ceased trade to be treated as continuing apply for corporation tax purposes?

(2) If your company begins (or ceases) to carry on a trade it is treated as if it had commenced (or discontinued) the trade at that point. The income tax rules which allow the trade to be treated as continuing do not apply for corporation tax purpose...

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(3) In computing income from a trade, section 76(5)(b) shall not prevent the deduction of yearly interest.

Can my company deduct yearly interest when computing its trading income?

(3) Yes. See Inspector Manual 4.5.4.

(4) In computing a company's income for any accounting period from the letting of rights to work minerals in the State, there may be deducted any sums disbursed by the company wholly, exclusively and necessarily as expenses of management or supervision of those minerals in that period; but any enactments restricting the relief from income tax that might be given under section 111 shall apply to restrict in the like manner the deductions that may be made under this subsection.

Can my company deduct management expenses in relation to let mineral rights when computing its income?

(4) If your company lets mineral rights in the Republic of Ireland (ROI), it is entitled, in computing its income for corporation tax purposes, to deduct related management expenses (subject to the restrictions that apply to those deduction for incom...

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(5) Where a company is chargeable to corporation tax in respect of a trade under Case III of Schedule D, the income from the trade shall be computed in accordance with the provisions applicable to Case I of Schedule D.

How is income from a foreign trade to be computed for corporation tax purposes?

(5) If your company carries on a foreign trade, the income of that trade is computed as if the trade were carried on in the ROI.

(6) The amount of any income arising from securities and possessions in any place outside the State shall be treated as reduced (where such a deduction cannot be made under, and is not forbidden by, any provision of the Income Tax Acts applied by the Corporation Tax Acts) by any sum paid in respect of income tax in the place where the income has arisen.

Can my company claim a deduction for foreign tax paid on foreign income?

(6) In computing your company's foreign income, you get a deduction for foreign tax paid on that income.

(7) Paragraphs (e) and (f) of Case III of Schedule D in section 18(2) shall for the purposes of corporation tax extend to companies not resident in the State, in so far as those companies are chargeable to tax on income of descriptions which, in the case of companies resident in the State, are within those paragraphs (but without prejudice to any provision of the Income Tax Acts specially exempting non-residents from income tax on any particular description of income).

If my company operates a branch in Ireland, is it caught for Irish tax on the foreign income of the branch?

(7) Yes. If your company is not resident in the ROI, but has a branch in the ROI, it is caught for Irish corporation tax on the foreign source income of that branch.