Taxes Consolidation Act 1997 Schedule 19 paragraph 5

Irish equivalent profits

Schedule 19, paragraph 5 defines "Irish equivalent profits" and explains how to calculate them for the purposes of the offshore funds distribution test.

• Irish equivalent profits are the fund's total income profits (excluding chargeable gains) that would be chargeable to corporation tax if the fund were treated as a company resident in the State.
• The calculation assumes the fund is Irish-resident, the account period is its accounting period, and dividends from Irish companies (franked investment income) are treated as if they were dividends from non-resident companies.
• Allowable deductions include amounts unavailable for distribution under foreign law, un-refunded Irish income tax deducted at source, and foreign tax referable to capital that would otherwise be excluded from the computation.
• Irish-sourced income that would normally be exempt in the hands of a non-resident — such as income from Irish government stocks — must be included in the calculation.