Taxes Consolidation Act 1997 section 111AL

Application of consolidated revenue threshold to group mergers and demergers

Section 111AL sets out the rules for applying the consolidated revenue threshold (€750,000,000) when groups undergo mergers or demergers, ensuring that the four-year revenue test is properly assessed despite changes in group structure.

• A merger occurs when two or more groups, or a standalone entity and a group, combine under single ownership; a demerger occurs when a group splits into two or more separate groups no longer consolidated by the same ultimate parent entity.
• When groups merge, their individual revenues from prior fiscal years are added together — if the combined total meets or exceeds €750,000,000 in any of the four fiscal years before the merger, the consolidated revenue threshold is deemed satisfied for those years.
• Where a standalone entity merges with another entity or group, and either party lacked consolidated financial statements in any of the preceding four fiscal years, the threshold is treated as met if their combined revenues for the relevant fiscal year reach €750,000,000.
• After a demerger, each resulting group must independently satisfy the revenue test: in the first fiscal year post-demerger, by recording revenue of at least €750,000,000; and for the second to fourth fiscal years after the demerger, by meeting the threshold in at least two of those years.

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