Taxes Consolidation Act 1997 section 130

Matters to be treated as distributions

Section 130 defines what counts as a "distribution" for corporation tax purposes, covering not only dividends but also various other ways in which value can be extracted from a company, and sets out exceptions for certain inter-company transfers.

• A distribution includes any dividend paid by a company, any other distribution out of assets in respect of shares (except repayments of capital or amounts matched by new consideration), and any amount paid on the redemption of bonus securities not referable to new consideration.
• Interest or other payments on certain categories of securities — including bonus securities, unquoted convertible securities, securities where the return depends on company results or exceeds a reasonable commercial rate, and securities held by non-resident associated companies — are treated as distributions, though exceptions apply for ratchet loans and for interest paid to companies resident in other EU Member States or the United Kingdom.
• Where a company transfers assets or liabilities to or from its members and the market value of the benefit exceeds any new consideration given, the excess is treated as a distribution — but this does not apply where both companies are resident in the State (or an EU/EEA treaty state or the United Kingdom) and one is a subsidiary of the other.
• A transfer of non-cash assets or liabilities between two Irish-resident companies is not treated as a distribution provided neither company is a 51 per cent subsidiary of a non-resident company and the companies are not under common control.