Taxes Consolidation Act 1997 section 308

Corporation tax: manner of granting, and effect of, allowances made by means of discharge or repayment of tax

Section 308 outlines the method and implications of granting capital allowances and their effect on corporation tax.

• Certain capital allowances, such as industrial building allowances and plant and machinery allowances for lessors, must be set primarily against the specified class of income to which they relate, with non-trading balancing charges treated as income of that same class.
• From 1 January 2022, non-resident companies brought within the charge to corporation tax on Irish rental income may carry forward excess income tax Case V capital allowances for corporation tax purposes, with balancing allowances and charges adjusted to reflect the change from the 20% income tax rate to the corporation tax rate.
• Where allowances exceed the income of the relevant class in an accounting period, the excess may be carried forward to the next accounting period and treated as an allowance for that period.
• As an alternative to carry-forward, current-year allowances that cannot be absorbed may, on claim, be set against total profits of the same accounting period or carried back against total profits of a preceding period of equal length, with any remaining balance carried forward under the normal rules.

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