Taxes Consolidation Act 1997 section 111AB

Post-filing adjustments and tax rate changes

Section 111AB sets out how adjustments to a constituent entity's covered taxes — whether arising from corrections to prior year figures or from changes in domestic tax rates — are to be treated for the purposes of calculating the effective tax rate and any top-up tax.

• Tax adjustments relating to prior years are generally treated as arising in the year the adjustment is recorded, unless the adjustment results in a decrease in covered taxes for that prior year, in which case the effective tax rate and top-up tax for the earlier year must be recalculated.
• An election is available to treat aggregate decreases of less than €1,000,000 in a jurisdiction's adjusted covered taxes as a current-year adjustment rather than triggering a recalculation of the prior year.
• Where a domestic tax rate falls below or rises towards the minimum tax rate, any resulting deferred tax expense is treated as an adjustment to covered taxes for the relevant prior year, subject to a cap at the amount recalculated at the minimum tax rate.
• If more than €1,000,000 of current tax expense included in adjusted covered taxes for a fiscal year remains unpaid three years after the end of that year, the effective tax rate and top-up tax for that year must be recalculated excluding the unpaid amount.

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