Taxes Consolidation Act 1997 section 129A

Dividends paid out of foreign profits

Section 129A is an anti-avoidance provision that removes the section 129 exemption from distributions between connected Irish-resident companies where the dividends are paid out of profits earned by the paying company while it was resident outside Ireland.

• A company receiving dividends from a connected company is not exempt under section 129 if the paying company became Irish-resident within the 10 years before the distribution (or since 3 April 2010, whichever is later), and the dividends are paid out of pre-residency profits.
• Where dividends exceed the paying company's distributable profits since it became Irish-resident, the excess is treated as paid out of profits earned while non-resident and is taxable under Case IV of Schedule D.
• Credit relief for foreign tax paid by the paying company is available against the corporation tax arising on the taxable distribution.
• The section does not apply where the paying company was not controlled by Irish-resident persons before it became resident in Ireland, nor where the distribution would have qualified for relief under section 831B.