Taxes Consolidation Act 1997 section 634

Credit for tax

Section 634 provides relief where an Irish resident company carrying on a branch trade in another EU Member State transfers that trade to a foreign company in return for securities in that company.

• Foreign gains tax on the transfer that has been deferred because of the Mergers Directive or local rollover relief may be credited against the Irish tax liability of the branch owner.
• The transfer must include all of the branch trade's assets (other than cash) and the consideration must consist wholly or partly of the issue of securities in the receiving company.
• The tax must be certified by the tax authorities of the EU Member State in which the branch trade was carried on as payable under the laws of that State.
• Where the transferring company is tax transparent, each partner or shareholder gets credit for an appropriate proportion of the foreign tax that would have been payable but for the Mergers Directive.