Taxes Consolidation Act 1997 Schedule 24 paragraph 7A

Effect on computation of income of allowance of credit against universal social charge

Paragraph 7A sets out how income is to be computed for universal social charge (USC) purposes where a credit for foreign tax is to be allowed against any of the Irish taxes.

• Where USC is assessed on the remittance basis, the amount remitted to the State is increased by the income tax credit allowable in respect of the foreign tax.
• In non-remittance basis cases, no deduction is made for foreign tax in computing the amount of foreign income for USC purposes.
• For dividends in non-remittance cases, the gross dividend is further increased by any underlying foreign tax on the company's profits that falls to be taken into account under the double taxation arrangements.
• These computational rules also apply when determining the effective rate of USC under paragraph 5A.