Taxes Consolidation Act 1997 section 845

Corporation tax: treatment of tax-free income of non-resident banks, insurance businesses, etc.

Section 845 ensures that foreign interest and dividends arising to the Irish branch of a non-resident bank, insurance company, or securities dealer are brought into charge for corporation tax, and restricts the deduction of expenses attributable to tax-free securities.

• Foreign interest and dividends attributable to the Irish branch of a non-resident bank, insurance company, or business dealing in securities are included in the computation of branch profits for corporation tax purposes, overriding the normal exemption for non-residents.
• Where interest on tax-free securities is excluded from the computation, expenses attributable to those securities (other than interest on borrowed money) and any profits or losses on their disposal are also excluded.
• For overseas life assurance companies, foreign interest and dividends are included in the investment income of the life assurance fund when computing the proportion chargeable to corporation tax.
• Tax-free securities are government or semi-State securities issued with a condition that the interest is not taxable in the hands of a non-resident holder.