Taxes Consolidation Act 1997 section 129

Irish resident company distributions not generally chargeable to corporation tax

Section 129 provides that, in general, corporation tax is not chargeable on dividends and other distributions received by a company from an Irish resident company, and sets out the concept of franked investment income.

• Dividends and distributions received from Irish resident companies are exempt from corporation tax and are not included in the recipient company's income computation.
• Such exempt distributions form part of the recipient company's "franked investment income" — income that has already borne tax at the distributing company level.
• Exceptions apply for life insurance companies, where distributions may be taken into account in computing profits under specific provisions (sections 714, 717 and 726).
• Franked investment income is subject to the close company surcharge under section 440, but a joint election under section 434(3A) can remove this liability.