Taxes Consolidation Act 1997 Schedule 24 paragraph 9I

Dividends: additional credit

Paragraph 9I provides for an additional credit for foreign tax on certain dividends received from companies resident in an EU or EEA treaty partner state, where the normal credit rules would give a lower credit than the nominal rate of tax in the source country.

• Where the normal foreign tax credit on a dividend from an EU/EEA source company is less than the amount computed by reference to the nominal tax rate in the source country, an additional credit tops up the relief to the lower of the Irish rate (12.5% or 25%) and the foreign nominal rate.
• The additional credit is calculated by the formula (A × B) − C, where A is the dividend brought into charge, B is the lower of the Irish rate and the foreign nominal rate, and C is the credit otherwise allowable under the normal rules.
• Where the source company's profits have not themselves been taxed but are attributable to profits of another company that have been taxed, the rate used in the formula is the rate applicable to those underlying taxed profits, and the dividend is disaggregated into its component parts for this purpose.
• The additional credit may not be pooled or carried forward under paragraph 9E, and does not apply to dividends paid out of transferred profits within paragraph 9H.