Taxes Consolidation Act 1997 section 817X

Making of distribution

Section 817X applies defensive measures to relevant distributions made by Irish-resident companies to associated entities or permanent establishments located in specified territories (tax havens), where the distributions are made from untaxed income and are not excluded payments.

• The section targets distributions to associated entities resident in a specified territory (or to a permanent establishment situated in one), but only to the extent that the distribution is not an excluded payment and is made from income, profits or gains that have not been subject to domestic tax, foreign tax at a rate above zero, a controlled foreign company charge, a supplemental tax, or any similar tax.
• Where the conditions are met, existing exemptions from income tax on distributions (under sections 140(3)(a), 142(2) and 153(4)) are disapplied, meaning tax will apply to these distributions.
• Existing exclusions from the obligation to deduct dividend withholding tax (under sections 172B(7), 172D(2) and 172E(1)) are also disapplied, so withholding tax must be operated on the distributions.
• A targeted anti-avoidance rule provides that any arrangement entered into with a main purpose of circumventing these provisions will be disregarded, and the section will apply as if the arrangement had not been made.