Taxes Consolidation Act 1997 section 627

Charge to exit tax

Section 627 imposes an exit tax charge on unrealised chargeable gains where a company migrates its residence from Ireland, or transfers assets or a business from its Irish permanent establishment to another jurisdiction, such that those assets leave the scope of Irish tax.

• An exit tax charge arises where a company transfers assets or a business from its Irish permanent establishment to another territory, or where an Irish-resident company ceases to be resident in Ireland, by deeming a disposal and immediate reacquisition of the relevant assets at market value.
• The charge does not apply to assets that remain within the scope of Irish capital gains tax (such as Irish land, minerals, mineral rights, or shares deriving their value from such assets), to assets that continue to be used in Ireland by a permanent establishment of the migrating company, or to certain temporary asset transfers that will revert within 12 months.
• Exit tax is charged at 12.5%, but the standard capital gains tax rate of 33% applies where the exit event forms part of a transaction whose purpose is to secure the lower rate on what is in substance an actual disposal of the asset.
• Rollover relief under section 597 is not available where a company disposed of the old assets before migration and acquires replacement assets afterwards, unless those replacement assets continue to be used in Ireland by a permanent establishment of the company.