Taxes Consolidation Act 1997 section 172F

Obligations of qualifying intermediary in relation to relevant distributions

Section 172F sets out the obligations of qualifying intermediaries (QIs) in relation to relevant distributions received from Irish-resident companies or from other QIs, including the requirement to create and maintain an Exempt Fund and a Liable Fund.

• A QI must create and maintain two separate funds — an Exempt Fund (for non-liable persons who have provided appropriate declarations, and for other QIs receiving distributions on behalf of their own Exempt Fund members) and a Liable Fund (for all remaining clients).
• The QI must notify the paying company or other QI, in writing, whether distributions are to be received for the benefit of persons in its Exempt Fund or Liable Fund; if no such notification is given, the company must deduct dividend withholding tax (DWT) from the distribution.
• Special arrangements apply where the QI is a depositary bank holding shares for American Depositary Receipt (ADR) holders — ADR holders with US addresses on the depositary bank's register may be included in the Exempt Fund without a formal declaration of exemption, and specified intermediaries operating from the US may form part of the chain.
• On request from Revenue, a QI must file an annual return (electronically, unless Revenue permits a written return) showing details of distributions received, amounts, recipients and declarations held.