Taxes Consolidation Act 1997 section 835Q

Undistributed income

Section 835Q sets out the rules for calculating the undistributed income of a controlled foreign company (CFC) for an accounting period.

• A CFC's undistributed income is its distributable profits for the accounting period less any relevant distributions made in respect of that period.
• Distributable profits are limited to the portion of accounting profits available for distribution that is attributable to relevant Irish activities performed by the controlling company or a connected company, ignoring any local law restrictions on distributions.
• A relevant distribution is calculated using the formula A × (B/C), which apportions the actual distribution by reference to the ratio of distributable profits to total accounting profits, using pre-tax figures for both B and C.
• A distribution only qualifies as a relevant distribution if it is paid to a person resident in an EU or EEA Member State (where the distribution is taxed) or to an Irish-resident person (where no participation exemption is claimed), is paid or payable during the accounting period or within nine months of its end, and the tax on it has been paid and is not repayable.