Taxes Consolidation Act 1997 section 835V

Low accounting profit exemption

Section 835V provides a low accounting profit exemption that excludes certain controlled foreign companies from the CFC charge where their profits fall below specified thresholds.

• A CFC is exempt from the CFC charge if its accounting profits are below €750,000 and its non-trading income is below €75,000, or if its accounting profits are below €75,000 regardless of the nature of the income.
• Where the accounting period is shorter than 12 months, the profit thresholds are reduced proportionately.
• The exemption does not apply where arrangements have been entered into with the main purpose, or one of the main purposes, of securing that the exemption applies.
• Finance Act 2020 inserted section 835YA, which disapplies the low accounting profit exemption in certain additional circumstances.