Taxes Consolidation Act 1997 Schedule 24 paragraph 9FA

Credit for tax suffered by foreign branch against corporation tax payable

Paragraph 9FA allows an Irish company with foreign branches to pool excess foreign tax paid on branch income and offset it against Irish corporation tax payable on other foreign branch income of the same accounting period.

• Where foreign tax on a branch exceeds the Irish tax on that branch income, the excess (after adjustment) may be offset against Irish tax on other foreign branch income of the same period.
• The formula ((100 – R) / 100) × D calculates the unrelieved foreign tax available for offset, where R is the applicable Irish tax rate (12.5% for trading income, 25% for non-trading income) and D is the surplus foreign tax.
• Unrelieved foreign tax of an accounting period reduces the aggregate corporation tax payable on the company's foreign branch income for that period.
• Any unrelieved foreign tax that exceeds the aggregate corporation tax on foreign branch income for a period is carried forward to the next accounting period, and so on.