Taxes Consolidation Act 1997 section 267J

Credit for foreign tax

Section 267J provides that an Irish-resident company receiving interest or royalties from an associated company in another EU Member State may claim credit for withholding tax deducted from those payments, where the withholding tax arises under permitted derogations from the EU Interest and Royalties Directive.

• Where an Irish-resident company receives interest or royalties from an associated company in another Member State, and withholding tax has been charged under a derogation from Article 6 of the EU Interest and Royalties Directive, credit for that withholding tax is allowed against the company's Irish corporation tax liability, to the extent that credit would not otherwise be available.
• The credit is given by applying the rules in Schedule 24 of the Taxes Consolidation Act 1997, as if the entitlement to credit arose under a double taxation agreement.
• This credit relief applies without prejudice to any relief available under a bilateral double taxation agreement — meaning the company can benefit from this provision regardless of any separate treaty entitlements.
• The derogations in question were granted to Greece, Portugal (for interest and royalties) and Spain (for royalties only), allowing those Member States to continue charging withholding tax during a transitional period under the Directive.