Taxes Consolidation Act 1997 section 111AY

Initial phase of exclusion from IIR and UTPR of MNE groups and large-scale domestic groups

Section 111AY provides a transitional relief that reduces the top-up tax liability to zero for qualifying MNE groups in the early stages of their international activity, and for large-scale domestic groups in their first five years within scope of the Pillar Two rules.

• The IIR top-up tax for an ultimate or intermediate parent entity in the State is reduced to zero where the entity's MNE group is in the first five years of the initial phase of its international activity, or where a large-scale domestic group is in its first five years within scope of Part 7A.
• An MNE group is considered to be in the initial phase of its international activity if it has constituent entities in no more than six jurisdictions and the net book value of tangible assets outside its reference jurisdiction does not exceed €50,000,000.
• The five-year period generally starts from the beginning of the fiscal year in which the group first comes within scope, but for groups already in scope when the rules commenced, the start date is 31 December 2023 for IIR purposes (and for large-scale domestic groups), or 31 December 2024 for UTPR purposes.
• Where the relief applies, the filing constituent entity located in the State must notify Revenue of the start date of the initial phase of the MNE group's international activity.

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