Taxes Consolidation Act 1997 section 111E

Ultimate parent entity in the State

Section 111E imposes an Income Inclusion Rule (IIR) top-up tax on an ultimate parent entity located in Ireland in respect of any low-taxed constituent entity it holds an interest in, and in respect of itself if it is also low-taxed.

• An ultimate parent entity (UPE) based in Ireland that owns, directly or indirectly, an interest in a low-taxed constituent entity at any time during a fiscal year is liable to IIR top-up tax on that entity's undertaxed profits.
• The ownership interest can be held either directly or indirectly — both routes trigger the top-up tax obligation.
• If the UPE itself is a low-taxed constituent entity in a fiscal year, it is also subject to IIR top-up tax in respect of its own profits for that year.
• The section forms part of the Pillar Two global minimum tax framework, ensuring that profits of group entities are taxed at no less than the minimum effective rate.