Taxes Consolidation Act 1997 section 633A

Formation of SE or SCE by merger - leaving assets in the State

Section 633A provides for tax neutrality where an SE (European Company) or SCE (European Cooperative Society) is formed by a cross-border merger and qualifying assets remain within the Irish tax net following the merger.

• Where an SE or SCE is formed by a cross-border merger of companies resident in different EU Member States, and the merger is not already covered by section 615, qualifying transferred assets are treated as acquired by the SE or SCE for a consideration giving rise to no gain and no loss for the transferor.
• An asset is a qualifying transferred asset if it is transferred as part of the merger process, the transferor is Irish resident or any gain would have been chargeable immediately before the transfer, and the transferee SE or SCE is Irish resident on formation or any gain would be chargeable immediately after the transfer.
• The transfer of assets in the course of the merger does not give rise to any balancing allowance or balancing charge; instead, the SE or SCE steps into the shoes of the transferor for capital allowances purposes, as if it had been carrying on the trade since the transferor began to do so.
• A company is treated as tax resident in an EU Member State other than Ireland if it is so treated under the law of that State and is not treated, under a tax treaty of that State, as resident in a territory outside the EU.