Taxes Consolidation Act 1997 section 831B

Participation exemption for certain foreign distributions

Section 831B provides a corporation tax exemption (the participation exemption) for qualifying distributions received by an Irish parent company from a foreign subsidiary, as a simplified alternative to claiming double tax relief under Schedule 24.

• The exemption applies to distributions received on or after 1 January 2025 by a parent company holding at least a 5 per cent qualifying participation in a relevant subsidiary for a continuous period of at least 12 months.
• The distributing company must be resident for foreign tax purposes, and not generally exempt from foreign tax, in a relevant territory both at the date of the distribution and throughout the 3-year period before the distribution (or from its date of incorporation, if later).
• A relevant territory is an EEA state, a country with which Ireland has (or has signed) a double tax agreement, or a territory that generally imposes withholding tax on outbound distributions, but it cannot be a territory on the EU list of non-cooperative jurisdictions.
• The parent company must claim the exemption in its corporation tax return, and the claim applies to all qualifying distributions received in the accounting period — it cannot be made on a selective basis.