Taxes Consolidation Act 1997 Schedule 24 paragraph 6

Foreign tax credit does not give rise to a refund

Paragraph 6 of Schedule 24 provides that the total foreign tax credit allowed against income tax for any year of assessment cannot exceed the person's own net income tax liability for that year.

• The total foreign tax credit for a year of assessment is capped at the person's income tax payable for that year, after deducting any tax the person is entitled to charge against another person.
• Foreign tax credits cannot give rise to a repayment of tax — they can only reduce or eliminate the Irish tax liability, not create a refund.
• Double taxation relief is calculated separately on each foreign source of income; foreign tax incurred on one source cannot be set off against another source.
• Where a deduction for foreign tax has been claimed in arriving at taxable income, a credit for the same foreign tax against Irish tax is not available.