Taxes Consolidation Act 1997 section 110

Securitisation

Section 110 sets out special tax rules for qualifying securitisation companies, covering how their profits are taxed, what deductions they may claim, how losses are treated, and when interest payments escape the distribution rules.

• A qualifying company must be Irish-resident, hold or manage qualifying assets worth at least €10 million, carry on no other business, and notify Revenue on the prescribed form within the required timeframe.
• Profits are taxed under Case III of Schedule D at 25%, but computed using the Case I trading rules, meaning the company can deduct bad debts and other trading-type expenses, effectively achieving tax neutrality.
• Group relief is not available; however, losses may be carried forward against the company's own future profits, and transfer pricing rules are disapplied for interest on securities covered by subsection (4).
• Interest that would normally be treated as a distribution (and therefore non-deductible) may instead be treated as deductible interest, subject to anti-avoidance provisions and, where specified property is involved, additional restrictions introduced in 2016.