Finance Act 2021

Finance Act 2021 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 2021 Finance Act 2021 Finance Act 2021 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 45 of 2021 Finance Act 2021 CONTENTS

PART 1

Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Section

Section 1

Chapter 2

Universal Social Charge

Section 2

Chapter 3

Income Tax

Section 3

Section 4

Section 5

Section 6

Section 7

Section 8

Section 9

Section 10

Section 11

Section 12

Section 13

Section 14

Section 15

Chapter 4

Income Tax, Corporation Tax and Capital Gains Tax

Section 16

Section 17

Section 18

Section 19

Section 20

Section 21

Section 22

Section 23

Section 24

Section 25

Section 26

Section 27

Chapter 5

Corporation Tax

Section 28

Section 29

Section 30

Section 31

Section 32

Section 33

Section 34

Section 35

Section 36

Chapter 6

Capital Gains Tax

Section 37

Section 38

Section 39

PART 2

Excise

Section 40

Section 41

Section 42

Section 43

Section 44

Section 45

Section 46

Section 47

Section 48

Section 49

PART 3

Value-Added Tax

Section 50

Section 51

Section 52

Section 53

Section 54

Section 55

Section 56

PART 4

Stamp Duties

Section 57

Section 58

Section 59

Section 60

Section 61

Section 62

Section 63

PART 5

Capital Acquisitions Tax

Section 64

Section 65

Section 66

PART 6

Miscellaneous

Section 67

Section 68

Section 69

Section 70

Section 71

Section 72

Section 73

Section 74

Section 75

Section 76

Section 77

Section 78

Section 79

Section 80

Section 81

Section 82

Section 83

Section 84

Section 85

Section 86

Section 87

PART 1

Amendment of Taxes Consolidation Act 1997

PART 2

Amendment of Value-Added Tax Consolidation Act 2010

PART 3

Amendment of Finance Act 2001 Acts Referred to Building Control Act 1990 (No. 3) Capital Acquisitions Tax Consolidation Act 2003 (No. 1) Companies Act 2014 (No. 38) Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (No. 6) Customs Act 2015 (No. 18) Data Protection Act 2018 (No. 7) Derelict Sites Act 1990 (No. 14) Electricity Regulation Act 1999 (No. 23) Emergency Measures in the Public Interest (Covid-19) Act 2020 (No. 2) Finance (1909-1910) Act 1910 (10 Edw. 7, c.8) Finance (Local Property Tax) Act 2012 (No. 52) Finance (No. 2) Act 2008 (No. 25) Finance Act 1980 (No. 14) Finance Act 1983 (No. 15) Finance Act 1989 (No. 10) Finance Act 1992 (No. 9) Finance Act 1999 (No. 2) Finance Act 2000 (No. 3) Finance Act 2001 (No. 7) Finance Act 2003 (No. 3) Finance Act 2005 (No. 5) Intoxicating Liquor (Breweries and Distilleries) Act 2018 (No. 17) Intoxicating Liquor (National Concert Hall) Act 1983 (No. 34) Intoxicating Liquor (National Conference Centre) Act 2010 (No. 9) Intoxicating Liquor Act 1927 (No. 15 of 1927) Intoxicating Liquor Act 2003 (No. 31) Investment Funds, Companies and Miscellaneous Provisions Act 2005 (No. 12) Investment Limited Partnerships Act 1994 (No. 24) Limited Partnerships Act 1907 (7 Edw. 7, c.24) Local Government Act 2001 (No. 37) Medical Practitioners Act 2007 (No. 25) Ministers and Secretaries (Amendment) Act 2011 (No. 10) National Cultural Institutions Act 1997 (No.11) Nurses and Midwives Act 2011 (No. 41) Planning and Development (Housing) and Residential Tenancies Act 2016 (No. 17) Planning and Development Act 2000 (No. 30) Property Values (Arbitration and Appeals) Act 1960 (No. 45) Provisional Collection of Taxes Act 1927 (No. 7) Public Dance Halls Act 1935 (No. 2) Registration of Clubs (Ireland) Act 1904 (4 Edw. 7, c.9) Registration of Title Act 1964 (No. 16) Roads Act 1993 (No. 14) Stamp Duties Consolidation Act 1999 (No. 31) State Authorities (Public Private Partnership Arrangements) Act 2002 (No. 1) Taxes Consolidation Act 1997 (No. 39) Transport (Railway Infrastructure) Act 2001 (No. 55) Value-Added Tax Consolidation Act 2010 (No. 31) Video Recordings Act 1989 (No. 22) Number 45 of 2021 FINANCE ACT 2021 An Act to provide for the imposition, repeal, remission, alteration and regulation of taxation, of stamp duties and of duties relating to excise and otherwise to make further provision in connection with finance including the regulation of customs; to amend Part 7 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 and otherwise make provision for supports to certain sectors of the economy; and to provide for related matters.

[21st December, 2021] Be it enacted by the Oireachtas as follows:

PART 1

Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Interpretation (Part 1) 1. In this Part, “Principal Act” means the Taxes Consolidation Act 1997 .

Chapter 2

Universal Social Charge Amendment of section 531AN of Principal Act (rate of charge) 2. (1) Section 531AN of the Principal Act is amended— (a) in subsection (3), by the substitution of “€21,295” for “€20,687”, (b) in subsection (4), by the substitution of “2023” for “2022”, and (c) by the substitution of the following for Part 1 of the Table to that section: “Part 1 Part of aggregate income Rate of universal social charge

(1)

Chapter 3

Income Tax Deduction in respect of certain expenses of remote working 3. (1) Chapter 2 of Part 5 of the Principal Act is amended by the insertion of the following section after section 114: “114A. (1) In this section— ‘qualifying residence’ means a residential premises that is also used by a remote worker to perform the duties of his or her office or employment; ‘relevant expenses’, in relation to a remote worker, means expenses incurred and defrayed by the remote worker in respect of the provision of electricity, heating or an internet service in his or her qualifying residence; ‘remote worker’ means a person who is the holder of an office or employment of profit and who performs the duties of his or her office or employment— (a) by working from his or her residential premises on a full-time or part-time basis, or (b) by working some of his or her normal working time from his or her residential premises, with the remainder of that normal working time being spent in his or her normal place of employment or in some other place; ‘residential premises’ means, a dwelling or part of a dwelling which is occupied by an individual as his or her residence; ‘specified amount’, in relation to a year of assessment, means the amount of expenditure which qualifies for income tax relief in accordance with this section.

Exemption in respect of Pandemic Placement Grant 4. Chapter 1 of Part 7 of the Principal Act is amended by the insertion of the following section after section 192H: “192I. (1) In this section— ‘Minister’ means the Minister for Health; ‘qualifying grant’ means a grant, generally referred to and commonly known as the Pandemic Placement Grant, which is made periodically by or on behalf of the Minister to a qualifying student; ‘qualifying student’ means an undergraduate student who is registered on the candidate register maintained by the Nursing and Midwifery Board of Ireland and who is undertaking what is generally referred to and commonly known as a Supernumerary Clinical Placement or an Internship Clinical Placement as part of a qualifying course; ‘qualifying course’ means an undergraduate programme in nursing or midwifery, approved by the Nursing and Midwifery Board of Ireland under section 85

Amendment of section 477C of Principal Act (Help to Buy) 5. Section 477C of the Principal Act is amended— (a) in subsection (1), by the substitution in the definition of “qualifying period” of “2022” for “2021”, (b) in subsection (5A), by the substitution of “2022” for “2021”, (c) in subsection (8)(b), by the substitution of “2022” for “2021”, (d) in subsection (16)(a)— (i) by the substitution in subparagraph (ii) of “2022” for “2021”, and (ii) by the substitution in subparagraph (iii) of “2022” for “2021”, and (e) in subsection (25), by the substitution of “2022” for “2021”.

Rate of charge and personal tax credits 6. As respects the year of assessment 2022 and subsequent years of assessment, the Principal Act is amended— (a) in section 15— (i) in subsection (3)(i), by the substitution of “€27,800” for “€26,300”, and (ii) by the substitution of the following Table for the Table to that section: “TABLE

PART 1

Part of taxable income Rate of tax Description of rate

(1)

(2)

PART 2

Part of taxable income Rate of tax Description of rate

(1)

(2)

PART 3

Part of taxable income Rate of tax Description of rate

(1)

(2)

Amendment of section 118 of Principal Act (benefits in kind: general charging provision) 7. (1) Section 118 of the Principal Act is amended by the insertion of the following subsections after subsection (5H): “(5I) (a) Subject to paragraph (b), subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee of a qualifying medical check-up, where— (i) qualifying medical check-ups are made available generally by the body corporate to all directors and employees of that body corporate, or (ii) the director or employee is required by the terms of his or her office or employment to undergo the qualifying medical check-up. (b) A director or employee shall not, by virtue of this subsection, be relieved from a charge to income tax under subsection (1) more than once in any year of assessment, unless subparagraph (ii) of paragraph (a) applies. (c) In this subsection— ‘medical practitioner’ means a person who is registered in the register established under section 43 of the Medical Practitioners Act 2007 ; ‘qualifying medical check-up’ means a medical examination carried out by a medical practitioner to test a person’s state of health. (5J) (a) Subsection (1) shall not apply to health expenses incurred by the body corporate in or in connection with the provision for a director or employee of health care, where health care is made available generally by the body corporate to all directors and employees of that body corporate. (b) In this subsection, ‘health care’ and ‘health expenses’ have the same meanings respectively as they have in section 469. (5K) (a) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee of a Covid-19 test where— (i) the test is necessary for the performance of the duties of the office or employment of the director or employee, and (ii) Covid-19 tests are made available by the body corporate to all directors and employees of that body corporate where necessary for the performance of the duties of the office or employment of those directors and employees. (b) In this subsection— ‘Covid-19’ means a disease caused by infection with the virus SARS-CoV-2 and specified as an infectious disease in accordance with Regulation 6 of, and the Schedule to, the Infectious Diseases Regulations 1981 ( S.I. No. 390 of 1981 ) or any variant of the disease so specified as an infectious disease in those Regulations; ‘Covid-19 test’ means a relevant test, administered in accordance with the instructions of the manufacturer of the test, the purpose of which is to detect the presence of Covid-19 in the person to whom the test is administered;

‘rapid antigen test’ means a test that relies on detection of viral proteins (antigens) using a lateral flow immunoassay that gives results in less than 30 minutes; ‘relevant test’ means— (a) an RT-PCR test, (b) a rapid antigen test of a kind— (i) included, for the time being, in the common list of Covid-19 rapid antigen tests agreed in accordance with the Council Recommendation of 21 January 20211 , and (ii) that complies with the requirements of Directive 98/79/EC of the European Parliament and of the Council of 27 October 19982 or, as appropriate, Regulation (EU) 2017/746 of the European Parliament and of the Council of 5 April 20173 , or (c) a rapid antigen test of a kind that complies with regulatory requirements under the laws of a state other than a Member State that are equivalent to the requirements referred to in paragraph (b)(ii); ‘RT-PCR test’ means a reverse transcription polymerase chain reaction test. (5L) (a) Subsection (1) shall not apply to expense incurred by the body corporate, or incurred by a director or employee and reimbursed by the body corporate, in or in connection with the provision for a director or employee of an influenza vaccine, where influenza vaccines are made available generally by the body corporate to all directors and employees of that body corporate. (b) In this subsection, ‘influenza vaccine’ means an influenza vaccine specified in column 1 of the Eighth Schedule to the Medicinal Products (Prescription and Control of Supply) Regulations 2003 ( S.I. No. 540 of 2003 ) and administered in accordance with the requirements specified in columns 2 to 6 of that Schedule opposite the mention of the product concerned. (c) Relief shall not be given under section 469 in respect of the expense referred to in paragraph (a) incurred by a director or employee and reimbursed by the body corporate.”.

Amendment of section 127B of Principal Act (tax treatment of flight crew in international traffic) 8. Section 127B of the Principal Act is amended by the insertion of the following subsection after subsection (1): “(1A) Subsection (1) shall not apply for the year of assessment 2022 or any subsequent year of assessment where, for that year of assessment an individual— (a) is not resident in the State, (b) is resident for the purposes of tax, by virtue of the law of the territory next-mentioned in this paragraph, in a territory with the government of which arrangements are for the time being in force by virtue of section 826(1), and (c) is subject to tax on the income referred to in subsection (1) in a territory with the government of which arrangements are for the time being in force by virtue of section 826(1).”.

Benefit-in-kind: emissions-based calculations 9. (1) Section 121 of the Principal Act is amended, in subsection (4A), by the insertion of the following paragraph after paragraph (a): “(aa) Notwithstanding paragraph (a), where a car in respect of which this subsection applies is an electric vehicle, the cash equivalent of the benefit of the car ascertained under paragraph (a) shall be computed on the original market value of the car reduced by: (i) €35,000 in respect of a car made available in the period 1 January 2023 to 31 December 2023; (ii) €20,000 in respect of a car made available in the period 1 January 2024 to 31 December 2024; (iii) €10,000 in respect of a car made available in the period 1 January 2025 to 31 December 2025.”.

Amendment of section 472BB of Principal Act (sea-going naval personnel credit) 10. Section 472BB of the Principal Act is amended in subsection (3)— (a) by the substitution of “2021 or 2022” for “2021”, and (b) by the substitution, in paragraph (a), of “credit of €1,500 in relation to that year of assessment” for “credit of €1,500”.

Amendment of Schedule 13 to Principal Act (accountable persons for purposes of Chapter 1 of Part 18) 11. Schedule 13 to the Principal Act is amended— (a) by the deletion of paragraphs 56 and 122, (b) by the insertion of the following paragraph after paragraph 204: “205. Data Protection Commission.”, and (c) by the substitution— (i) in paragraph 39, of “Rásaíocht Con Éireann” for “Bord na gCon”, and (ii) in paragraph 179, of “Office of the Financial Services and Pensions Ombudsman” for “Financial Services Ombudsman’s Bureau”.

Retirement benefits: amendment of death-in-service provision 12. Section 772 of the Principal Act is amended— (a) in subsection (3), by the substitution of the following paragraph for paragraph (b): “(b) that any pension or benefit for any widow, widower, surviving civil partner, children or dependants, or children of the surviving civil partner, of an employee who dies before retirement shall be provided for as either— (i) a pension or pensions payable on the employee’s death of an amount that does not or, as the case may be, do not in aggregate exceed any pension or pensions which, consonant with the condition in paragraph (a), could have been provided for the employee on retirement on attaining the specified age, if the employee had continued to serve until the employee attained that age at an annual rate of remuneration equal to the employee’s final remuneration, or (ii) benefits transferred to an approved retirement fund on the employee’s death of an amount that does not or, as the case may be, do not in aggregate exceed any benefit which, consonant with the condition in paragraph (a), could have been provided for the employee on retirement on attaining the specified age, if the employee had continued to serve until the employee attained that age at an annual rate of remuneration equal to the employee’s final remuneration;”, and (b) by the insertion of the following subsection after subsection (3I): “(3J) Where benefits are provided in accordance with subsection (3)(b)(ii), sections 784A and 784B shall apply— (a) as if the transfer of the benefits were the exercise of an option in accordance with section 784(2A), and (b) with any necessary modifications, as if— (i) any reference in those sections to the person lawfully carrying on in the State the business of granting annuities on human life were a reference to the trustees of the retirement benefit scheme, and (ii) any reference in those sections to the annuity contract were references to the retirement benefit scheme.”.

Retirement benefits: removal of 15 year rule 13. Section 772 of the Principal Act is amended in subsection (3D) by the substitution of the following paragraph for paragraph (a): “(a) a member’s entitlements under the scheme, other than an amount referred to in paragraph (b), may, either on the member’s changing employment or on the scheme being wound up, be transferred to one or more than one PRSA to which that member is the contributor if benefits have not become payable to the member under the scheme,”.

Retirement benefits: removal of Approved Minimum Retirement Fund (AMRF) 14. (1) Chapter 1 of Part 30 of the Principal Act is amended in section 772— (a) by the substitution, in subsection (3A)(a), of the following for the construction of “B”: “B is the amount or value of assets which the trustees, administrators or other person charged with the management of the scheme (in this section referred to as ‘the trustees’) would, if the assumptions in paragraph (b) were made, apply in purchasing an annuity payable to the relevant individual with effect from the date of the exercise of the option.”, and (b) in subsection (3B)(a)— (i) by the deletion of “, 784C, 784D”, (ii) by the substitution, in subparagraph (i), of “scheme, and” for “scheme,”, (iii) by the substitution, in subparagraph (ii), of “scheme.” for “scheme,” and (iv) by the deletion of subparagraph (iia).

Retirement benefits: amendment of section 774 of Principal Act (certain approved schemes: exemptions and reliefs) 15. Section 774 of the Principal Act is amended, in subsection (6)(aa)(iii), by the insertion of “or of a company for the benefit of whose employees the contributions are paid under the terms of that agreement” after “parties to that agreement”.

Chapter 4

Income Tax, Corporation Tax and Capital Gains Tax Amendment of section 97A of Principal Act (pre-letting expenditure in respect of vacant premises) 16. Section 97A of the Principal Act is amended, in subsection (2), by the substitution of “31 December 2024” for “31 December 2021”.

Amendment of section 261 of Principal Act (taxation of relevant interest, etc.) 17. Section 261 of the Principal Act is amended— (a) by the substitution, in paragraph (c)(i), of “person (other than a company)” for “person (being an individual)”, (b) by the substitution, in paragraph (c)(ii)(I), of “paragraph (d)” for “section 59”, and (c) by the substitution of the following paragraph for paragraph (d): “(d) where relevant interest is to be taken into account in computing the total income of a person (other than a company) for any year of assessment, then, for the purpose of charging that total income to tax at the rate or rates of tax charged for that year of assessment, the following provisions shall apply— (i) the relevant interest shall be regarded as income chargeable to tax under Case IV of Schedule D and shall be charged accordingly, and (ii) in determining the amount of tax payable on that relevant interest, credit shall be given for the appropriate tax deducted from the relevant interest and the amount of the credit shall be the amount of such appropriate tax.”.

Non-resident landlords 18. The Principal Act is amended— (a) in section 25— (i) in subsection (1), by the substitution of “Subject to subsection (2A), a company not resident” for “A company not resident”, and (ii) by the insertion of the following subsection after subsection (2): “(2A) (a) Where a company not resident in the State is chargeable to tax under Case V of Schedule D in respect of any profits or gains, that company shall be chargeable to corporation tax on those profits or gains. (b) Where a company not resident in the State disposes of an asset in respect of which the company was chargeable to tax under Case V of Schedule D on any profits or gains therefrom, or would have been but for an insufficiency of such profits or gains, the company shall, subject to section 649, not be chargeable to capital gains tax in respect of gains accruing to it on the disposal so that it is chargeable in respect of them to corporation tax. (c) This subsection shall apply to profits and gains accruing on or after 1 January 2022.”, (b) in section 308, by the insertion of the following subsections after subsection (2): “(2A) Where a company not resident in the State— (a) pursuant to section 25(2A), comes within the charge to corporation tax under Case V of Schedule D on 1 January 2022, and (b) was entitled, immediately prior to that date, under section 305(1)(a), to carry forward an amount of an allowance to a year of assessment subsequent to the year of assessment for which the allowance was made, then— (i) subsection (3) shall apply to the amount of the allowance referred to in paragraph (b) as if it were an amount of allowance unallowed from an accounting period ending on 31 December 2021, and (ii) section 305(1)(a) shall not apply to the amount of allowance to which subsection (3) shall apply in accordance with paragraph (i). (2B) Where— (a) a company not resident in the State comes within the charge to corporation tax under Case V of Schedule D pursuant to section 25(2A) on 1 January 2022, and (b) a balancing allowance or balancing charge is made to or on, as the case may be, the company in respect of an allowance made to the company in a chargeable period ending on or before 31 December 2021, the amount of the balancing allowance or balancing charge, as the case may be, shall be adjusted as follows:

Badj = (B x 0. 2) / R where— Badj is the adjusted amount of the balancing allowance or balancing charge, as the case may be, B is the balancing allowance or balancing charge, as the case may be, and R is the rate specified in section 21A(3)(a).”, (c) in section 399, by the insertion of the following subsection after subsection (2): “(2A) Where a company not resident in the State— (a) pursuant to section 25(2A), comes within the charge to corporation tax under Case V of Schedule D on 1 January 2022, (b) was entitled, prior to that date, under section 384(2), to carry forward an excess to a year of assessment subsequent to the year of assessment in which the excess arose, and (c) an amount of that excess has not, on 1 January 2022, been deducted or set off under section 384(2), then— (i) subsection (2) shall apply to the amount of excess referred to in paragraph (c) as if it were a portion of excess for which relief had not been given under that subsection for a previous accounting period ending on 31 December 2021, and (ii) section 384(2) shall not apply to the amount of excess to which subsection (2) shall apply in accordance with paragraph (i).”, and (d) in section 959AS— (i) in subsection (1), by the substitution of “Subject to subsection (1A), preliminary tax appropriate to an accounting period” for “Preliminary tax appropriate to an accounting period”, and (ii) by the insertion of the following subsection after subsection (1): “(1A) Where a company, that comes within the charge to corporation tax under Case V of Schedule D pursuant to section 25(2A) on or after 1 January 2022, has an accounting period ending on or before 30 June 2022, preliminary tax appropriate to that accounting period is due and payable— (a) not later than 21 June 2022, or (b) where payment of preliminary tax is made by such electronic means as are required by the Revenue Commissioners, not later than 23 June 2022.”.

Amendment of certain tax exemption provisions of Principal Act 19. (1) The Principal Act is amended— (a) in Schedule 4, by the insertion of the following paragraph after paragraph 1: “1A. The Approved Housing Bodies Regulatory Authority.”, and (b) in Part 1 of Schedule 15, by the insertion of the following paragraph after paragraph 46: “47. Western Development Commission.”.

Certain profits of micro-generation of electricity 20. Chapter 1 of Part 7 of the Principal Act is amended by the insertion of the following section after section 216C: “216D. (1) In this section— ‘Act of 1999’ means the Electricity Regulation Act 1999 ; ‘generate’ has the same meaning as in the Act of 1999; ‘micro-generation of electricity’ means the use of renewable, sustainable or alternative forms of energy to generate electricity at a qualifying residence; ‘qualifying person’ means an individual who purchases electricity for own use; ‘qualifying residence’, in relation to a qualifying person for a year of assessment, means a residential premises situated in the State which is occupied by the qualifying person as his or her sole or main residence during the year of assessment and land which the qualifying person has for his or her own occupation and enjoyment with that residence as its garden or grounds; ‘residential premises’ means a building or part of a building used as a dwelling; ‘renewable, sustainable or alternative forms of energy’ has the same meaning as in the Act of 1999; ‘relevant period’ means the period commencing on 1 January 2022 and ending on 31 December 2024.

Amendment of section 285A of Principal Act (acceleration of wear and tear allowances for certain energy-efficient equipment) 21. (1) Section 285A of the Principal Act is amended— (a) in subsection (1), by the insertion of the following definition: “ ‘fossil fuel’ means coal, oil, natural gas, peat or any derivative thereof intended for use in the production of energy by combustion;”, and (b) in subsection (3)— (i) in paragraph (a), by the deletion of “and”, (ii) in paragraph (b), by the substitution of “the Table, and” for “the Table.”, and (iii) by the insertion of the following paragraph after paragraph (b): “(c) does not operate on fossil fuel, other than equipment that operates on electricity generated from using such fuel.”.

Amendment of section 285C of Principal Act (acceleration of wear and tear allowances for gas vehicles and refuelling equipment) 22. (1) Section 285C of the Principal Act is amended in subsection (1)— (a) in the definition of “gas refuelling station”, by the substitution of “gaseous fuel or hydrogen fuel is supplied to a gas-powered vehicle” for “gaseous fuel is supplied to a gas vehicle”, (b) by the substitution of the following definition for the definition of “gas vehicle”: “ ‘gas-powered vehicle’ means a mechanically propelled road vehicle which is fuelled by gaseous fuel or hydrogen fuel;”, (c) by the insertion of the following definitions after the definition of “gaseous fuel”: “ ‘hydrogen’ means the chemical element falling within CN code 2804 10 00; ‘hydrogen fuel’ means gaseous or cryogenic liquid hydrogen of a fuel quality that complies with ISO 14687:2019 or SAE J2719;”, (d) by the insertion of the following definition after the definition of “liquefied natural gas”: “ ‘pre-cooling device’ means equipment, which complies with ISO 19880-1:2020, used for the process of cooling hydrogen fuel prior to dispensing of the fuel;”, (e) in the definition of “qualifying vehicle”, by the substitution of “gas-powered vehicle” for “gas vehicle”, (f) by the substitution of the following definition for the definition of “refuelling equipment”: “ ‘refuelling equipment’ means— (a) a storage tank for gaseous fuel or hydrogen fuel, (b) a compressor, pump, control or meter used for the purposes of refuelling gas-powered vehicles, (c) a pre-cooling device, or (d) equipment for supplying gaseous fuel or hydrogen fuel to the fuel tank of a gas-powered vehicle;”, and (g) in the definition of “relevant period”, by the substitution of “31 December 2024” for “31 December 2021”.

Amendment of section 285D of Principal Act (acceleration of wear and tear allowances for farm safety equipment) 23. Section 285D of the Principal Act is amended— (a) in subsection (1) by the insertion of the following definition after the definition of “SME”: “ ‘tax reference number’ has the same meaning as it has in section 891B(1);”, (b) in subsection (3)— (i) in paragraph (b), by the substitution of “applicant;” for “applicant; and”, and (ii) by the insertion of the following paragraph after paragraph (b): “(ba) the tax reference number of the applicant;”, (c) in subsection (6)— (i) in paragraph (c), by the substitution of “issued;” for “issued; and”, and (ii) by the insertion of the following paragraph after paragraph (c): “(ca) the tax reference number of the applicant;”, (d) in subsection (7), by the substitution of “qualifying certificates issued under subsection (4) and all qualifying certificates deemed to be cancelled under subsection (13A)” for “qualifying certificates issued”, (e) by the insertion of the following subsection after subsection (13): “(13A) Where two or more certificates stand issued under subsection (4) to a person in respect of an item of qualifying equipment then— (a) only the certificate issued in respect of the first application made by the person under subsection (2) in respect of the item of qualifying equipment shall be treated as a qualifying certificate for the purposes of subsection (14), and (b) any other certificate standing issued under subsection (4) to that person in respect of that item of qualifying equipment is deemed to be cancelled in so far as it relates to that item of qualifying equipment and shall not be treated as a qualifying certificate for the purposes of subsection (14).”, (f) in subsection (14), by the substitution of “Subject to subsections (13A), (15) and (16)” for “Subject to subsections (15) and (16)”, and (g) in subsection (17), by the substitution of “relief granted under this section” for “relief granted”.

Amendment of Part 23 of Principal Act (farming and market gardening) 24. Part 23 of the Principal Act is amended— (a) in section 657(7), by the deletion of all of the words from and including“; but where in the case of an individual” to the end of that subsection, (b) in section 666(4), by the substitution of “2024” for “2021” in each place where it occurs, (c) in section 667B(5)(b), by the substitution of “31 December 2022” for “31 December 2021”, and (d) in section 667C— (i) in subsection (2), by the substitution of the following paragraph for paragraph (b): “(b) the following was substituted for subsection (4)— ‘(4) (a) A deduction shall not be allowed under this section in computing a company’s trading income for any accounting period which ends after 31 December 2022. (b) Any deduction allowed by virtue of this section in computing the profits or gains of a trade of farming for an accounting period of a person other than a company shall not apply for any purpose of the Income Tax Acts for any year of assessment later than the year 2022.’,”, and (ii) in subsection (4), by the substitution of “31 December 2022” for “31 December 2021”.

Amendment of section 886 of Principal Act (obligation to keep certain records) 25. Section 886 of the Principal Act is amended, in subsection (2), by the insertion of the following paragraph after paragraph (a): “(aa) Without prejudice to the generality of paragraph (a) and subsection (4)— (i) the records shall include records and linking documents relating to any allowance, deduction, relief or credit (referred to in this paragraph as a ‘relevant amount’) taken into account in computing the amount of tax payable (within the meaning of section 959A), for the year of assessment or accounting period concerned, (ii) the transactions, acts or operations giving rise to a relevant amount shall, for the purposes of subsection (4)(a)(i), be treated as transactions, acts or operations that were completed at the end of the year of assessment or accounting period for which a relevant amount is taken into account in computing the amount of tax payable (within the meaning aforesaid) for the year of assessment or accounting period concerned, and (iii) the transactions, acts or operations giving rise to a relevant amount shall, for the purposes of subsection (4)(a)(ii), be treated as transactions, acts or operations that were completed at the end of the year of assessment or accounting period in which the return, in which the relevant amount is taken into account in computing the amount of tax payable (within the meaning aforesaid), has been delivered.”.

Amendment of Part 16 of Principal Act (relief for investment in corporate trades) 26. (1) Part 16 of the Principal Act is amended— (a) in section 489, in paragraph (a) of the definition of “RICT group”, by the deletion of “but has since been disposed of”, (b) in section 502, by the insertion of the following subsection after subsection (4): “(5) In respect of shares issued on or after 1 January 2022, an amount equal to ten fortieths of the relief granted under subsection (2A) shall be withdrawn, unless in relation to a qualifying company and its qualifying subsidiaries— (a) (i) the employment relevant number exceeds the employment threshold number by at least one qualifying employee, and (ii) the relevant amount exceeds the threshold amount by at least the total emoluments of one qualifying employee in the year of assessment in which the subsequent period ends, or (b) the amount of expenditure on R&D+I incurred in the year of assessment in which the subsequent period ends exceeds the amount of expenditure on R&D+I incurred in the year of assessment prior to the year of assessment in which the subscription for eligible shares was made.”, (c) in section 505, by the substitution of the following subsection for subsection (2): “(2) The individual, in each of the 3 years of assessment preceding the year of assessment that precedes the year of assessment in which that individual makes a relevant investment (being that individual’s first such investment), may have been in receipt of income other than income chargeable to tax under— (a) Schedule E, or (b) Case III of Schedule D in respect of profits or gains from an office or employment held or exercised outside the State, not in excess of the lesser of— (i) the aggregate of the amounts, if any, of that individual’s income chargeable to tax under Schedule E and Case III of Schedule D in respect of the profits or gains referred to in paragraphs (a) and (b), and (ii) €50,000.”, (d) in section 508(1), by the substitution of the following paragraph for paragraph (a): “(a) makes a qualifying investment or has an amount of relief carried forward under this section in excess of— (i) €100,000 in respect of which relief is available under section 507, or (ii) the limits set out in section 502(3) in any other case, or”, (e) in section 508A— (i) in subsection (1), by the insertion of “or qualifying investment fund,” after “designated fund”, (ii) in subsection (3)(a)— (I) by the substitution of the following for subparagraph (iv): “(iv) where the investment is made through a designated fund or qualifying investment fund, the name, address and tax reference number of the designated fund or the qualifying investment fund, as the case may be,”,

and (II) by the deletion of subparagraph (v), and (iii) by the substitution of the following subsection for subsection (4): “(4) A qualifying company may not issue a statement of qualification in respect of a qualifying investment more than 4 months after the end of the year of assessment in which the shares were issued.”, (f) in section 508C— (i) in subsection (3)(a), by the deletion of subparagraph (iv), and (ii) by the substitution of the following subsection for subsection (4): “(4) A qualifying company may not issue a statement of qualification (SURE) in respect of a relevant investment more than 4 months after the end of the year of assessment in which the shares were issued.”, (g) in section 508E(2), by the substitution of “not more than 4 months after the end of the year of assessment in which the shares were issued” for “within 60 days of the date referred to in section 508A(3)(a)(v)”, (h) in section 508F(2), by the substitution of the following paragraph for paragraph (d): “(d) where section 502(2)(b) applies, the date the conditions set out in section 508B(4)(a) are satisfied.”, (i) in section 508G(2)— (i) in paragraph (c), by the substitution of “investment.” for “investment;”, and (ii) by the deletion of paragraph (d), (j) by the substitution of the following title for the title to Chapter 7: “Investment Funds”, (k) by the insertion of the following section after section 508I: “Qualifying investment funds 508IA. (1) In this Part— ‘alternative investment fund manager’ has the meaning assigned to it by the European Union (Alternative Investment Fund Managers) Regulations 2013 ( S.I. No. 257 of 2013 ); ‘investment limited partnership’ means a partnership authorised in accordance with the Investment Limited Partnerships Act 1994 ; ‘limited partnership’ means a limited partnership registered in accordance with the Limited Partnerships Act 1907 and managed by an alternative investment fund manager in accordance with the European Union (Alternative Investment Fund Managers) Regulations 2013; ‘partnership agreement’ means any valid written agreement of the partners governed by the law of the State and subject to the exclusive jurisdiction of the courts of the State as to the affairs of a limited partnership or an investment limited partnership that is a qualifying investment fund for the purposes of this Part and the conduct of its business as may be amended, supplemented or restated from time to time; ‘qualifying investment fund’ means an investment limited partnership or a limited partnership that meets the requirements of subsection (2).

(ii) in subsections (2), (3) and (4)(a), by the substitution of “fund managers” for “managers of a designated fund” in each place where it occurs, and (iii) in subsection (4), by the insertion of “or the qualifying investment fund” after “designated fund” in each place where it occurs, (m) in section 508P, by the insertion of the following subsection after subsection (8): “(9) Where during a compliance period in respect of a qualifying investor’s investment in a qualifying company, that company redeems shares of that individual, where the compliance period for that share issue has ended, or purchases shares from that individual, where the compliance period for that share issue has ended (either of which is referred to in this subsection as ‘the redemption’), then, notwithstanding subsection (7), the relief that individual is entitled to, other than pursuant to section 503 or 507, shall not be reduced where— (a) the most recent qualifying investment, in respect of which a claim for relief under this Part is made, in a company in the RICT group was more than 18 months prior to the date of the redemption, (b) there is no qualifying investment, in respect of which a claim for relief under this Part is made, in a company in the RICT group within the period of 12 months after the date of the redemption, and (c) there is no qualifying investment by that individual, in respect of which a claim for relief under this Part is made, in a company in the RICT group within the period of 5 years after the date of the redemption.”, (n) in section 508U— (i) by the insertion of the following subsection after subsection (3): “(3A) Where any relief is to be withdrawn under section 502(5) that relief shall be withdrawn by the making of an assessment on the qualifying company to corporation tax under Case IV of Schedule D for the year of assessment following the year of assessment in which the subsequent period ends, in an amount equal to 0. 4 times the amount referred to in section 502(5).”, and (ii) in subsection (4)— (I) in paragraph (b) by the deletion of “or”, (II) in paragraph (c) by the substitution of “ends, or” for “ends.”, and (III) by the insertion of the following paragraph after paragraph (c): “(d) in the case of relief withdrawn in accordance with subsection (3A), the year of assessment following the year of assessment in which the subsequent period ends.”, (o) in section 508Y(2)(c), by the substitution of “designated fund or qualifying investment fund, the managers of the designated fund or qualifying investment fund” for “designated fund, the managers of the designated fund”, and

(p) in section 508Z, by the substitution of “2024” for “2021” in each place where it occurs.

Amendment of Part 35A of Principal Act (transfer pricing) 27. (1) Part 35A of the Principal Act is amended in section 835A— (a) by the substitution, in subsection (1), of the following definition for the definition of “relevant person”: “ ‘relevant person’ in relation to an arrangement, means a person who is within the charge to tax in respect of profits or gains or losses, the computation of which profits or gains or losses takes account of the results of the arrangement, or would take account of the results of such an arrangement;”, and (b) by the substitution of the following subsection for subsection (3): “(3) For the purposes of this Part, references to losses that are chargeable to tax are references to losses arising from an arrangement or relevant activities, a profit or gain arising from which would be chargeable to tax.”.

Chapter 5

Corporation Tax Attribution of profits to a branch 28. (1) The Principal Act is amended in Chapter 2 of Part 2 by the insertion of the following section after section 25: “25A. (1) In this section— ‘Article 7 of the OECD Model Tax Convention’ means the provisions contained in Article 7 of the Model Tax Convention on Income and on Capital published by the OECD on 21 November 2017; ‘authorised OECD approach guidance’ means the guidance on the attribution of profits to permanent establishments set out in the 2010 Report on the Attribution of Profits to Permanent Establishments approved for publication by the Council of the OECD on 22 July 2010, supplemented by the whole or part of such additional guidance on the attribution of profits to permanent establishments, published by the OECD on or after the date of the passing of the Finance Act 2021, as may be designated by the Minister for Finance for the purposes of this section by order made under subsection (5); ‘branch’, in relation to a company which is not resident in the State, means a branch or agency through which the company carries on a trade in the State; ‘double taxation relief arrangements’ means arrangements having effect by virtue of section 826; ‘OECD’ means the Organisation for Economic Co-operation and Development; ‘Minister’ means the Minister for Finance; ‘relevant branch income’ has the meaning given to it in subsection (2); ‘relevant branch records’ has the meaning given to it in subsection (7); ‘return’ and ‘specified return date for the accounting period’ have the meanings given to them by section 959A; ‘Revenue officer’ means an officer of the Revenue Commissioners; ‘small enterprise’ and ‘medium enterprise’ have the meanings assigned, respectively, to those expressions by section 835F and ‘small or medium-sized enterprise’ shall be construed accordingly.

(i) ‘functional and factual analysis’ and ‘free capital’ shall be construed in accordance with the authorised OECD approach guidance, and (ii) ‘transfer pricing method’, ‘tested party’, ‘selected comparable uncontrolled transactions (internal or external)’, ‘relevant financial indicators for independent enterprises’ and ‘comparable search methodology’ shall be construed in accordance with the transfer pricing guidelines (within the meaning of section 835D). (d) Paragraph (a) shall not apply to a company for an accounting period where— (i) the company is a small enterprise for that accounting period, or (ii) the company is a medium enterprise for that accounting period and the relevant branch income attributable to the branch of the company, as determined in accordance with subsections (3) and (4), for that accounting period is less than €250,000.

Amendment of section 129A of Principal Act (dividends paid out of foreign profits) 29. (1) Section 129A of the Principal Act is amended in subsection (3)(a) by the substitution of the following subparagraph for subparagraph (ii): “(ii) ending on the last day of— (I) the accounting period of the company immediately preceding the accounting period in which the distribution is made, or (II) the accounting period in which the distribution is made, where the distribution is an interim dividend paid, in that accounting period, out of profits arising in that accounting period,”.

Amendment of Part 35C of Principal Act (implementation of Council Directive (EU) 2016/1164 of 12 July 2016 as regards hybrid mismatches) 30. (1) Part 35C of the Principal Act is amended— (a) in section 835Z— (i) in subsection (1), by the substitution of the following definition for the definition of ‘entity’: “ ‘entity’ means— (a) a person (other than an individual) that has legal personality under the laws of the territory in which it is established, (b) an undertaking (other than an individual) that has legal personality under the laws of the territory in which it is established, (c) an agreement, trust or other arrangement that has legal personality under the laws of the territory in which it is established, (d) an association of persons recognised under the laws of the territory in which it is established as having the capacity to perform legal acts, or (e) any other legal arrangement of whatever nature or form, that owns or manages assets, that is subject to any of the taxes covered by this Part;”, and (ii) in subsection (4), by the substitution of “Subject to section 835AVA(3), a reference in this Part” for “A reference in this Part”, (b) in section 835AA— (i) in subsection (1), by the insertion of the following definitions: “ ‘consolidated group for financial accounting purposes’ means a group consisting of— (i) a parent entity, and (ii) all other entities, other than non-consolidating entities, which are included in the same consolidated financial statements; ‘parent entity’ means an entity that prepares, or would prepare, consolidated financial statements under generally accepted accounting practice;”, and (ii) in subsection (2)— (I) by the substitution of the following paragraph for paragraph (e): “(e) where both enterprises— (i) are entities, and (ii) are part of the same consolidated group for financial accounting purposes,”, and (II) by the substitution of the following paragraph for paragraph (f): “(f) where both enterprises— (i) are entities, and (ii) would, if consolidated financial statements were prepared under international accounting standards, be part of the same consolidated group for financial accounting purposes,”, (c) in section 835AB— (i) by the substitution of the following subsection for subsection (1): “(1) Subject to subsection (3), this section applies where an enterprise is taxable in an investor or payee territory (in this section referred to as the ‘first-mentioned territory’) such that payments (in this section referred to as ‘disregarded payments’) between—

(a) the head office of an entity and a permanent establishment of that entity, (b) two or more permanent establishments of an entity, (c) an individual and a permanent establishment of that individual, (d) two or more permanent establishments of an individual, (e) where an enterprise is a participator in a hybrid entity, the enterprise and the hybrid entity, (f) where an enterprise is a participator in two or more such hybrid entities, two or more such hybrid entities, or (g) where an entity is an entity on which a controlled foreign company charge or foreign company charge is made in respect of two or more hybrid entities, two or more such hybrid entities, are disregarded when computing the taxable profits of the enterprise in the first-mentioned territory under a provision of the law of that territory similar in effect to section 26(1), or subparagraph (i) or (ii) of paragraph (a) of subsection (1) of Schedule D in section 18.”, and (ii) in subsection (3), by the substitution of the following paragraph for paragraph (a): “(a) the disregarded payments are between— (i) where the enterprise referred to in subsection (1) is an individual, an individual and a permanent establishment of the individual, (ii) where the enterprise referred to in subsection (1) is an individual, two or more permanent establishments of the individual, (iii) where the enterprise referred to in subsection (1) is a participator in a hybrid entity, the enterprise and the hybrid entity, (iv) where the enterprise referred to in subsection (1) is a participator in two or more hybrid entities, two or more such hybrid entities, or (v) where the entity referred to in subsection (1) is an entity on which a controlled foreign company charge or foreign company charge is made in respect of two or more hybrid entities, two or more such hybrid entities, and”, (d) in section 835AJ, in subsection (1), by the substitution of “A financial instrument deduction without inclusion mismatch outcome shall arise in respect of a payment where” for “A financial instrument deduction without inclusion mismatch outcome shall arise where”, (e) in section 835AL, in subsection (1), by the substitution of “shall arise in respect of a payment to a hybrid entity where it would be reasonable to consider that” for “shall arise in respect of a payment to a hybrid entity where”, (f) by the insertion of the following Chapter after Chapter 10: “Chapter 10A Reverse hybrid mismatches Interpretation (Chapter 10A) 835AVA. (1) In this Chapter— ‘collective investment scheme’ shall be construed in accordance with section 835AVB;

‘relevant ownership interest’, in relation to a reverse hybrid entity, shall be construed in accordance with subsection (4); ‘relevant participator’, in relation to a reverse hybrid entity, means a participator with a relevant ownership interest in the reverse hybrid entity; ‘reverse hybrid entity’ means a hybrid entity established in the State— (a) that, for the purposes of the Acts, is not chargeable to tax in respect of its profits or gains, because those profits or gains are treated, or would be so treated but for an insufficiency of profits or gains, as arising or accruing to the participators in the hybrid entity, and (b) some or all of the profits or gains of which are regarded, for the purposes of the tax law of the territory in which a participator in the hybrid entity is established, as arising or accruing to the hybrid entity on its own account; ‘reverse hybrid mismatch outcome’ shall be construed in accordance with section 835AVD.

Collective investment scheme 835AVB. (1) In this section— ‘beneficial owner’, in relation to an undertaking, is any individual who is a beneficial owner within the meaning of— (a) the Investment Limited Partnerships Act 1994 , or (b) the Investment Funds, Companies and Miscellaneous Provisions Act 2005 , and in applying this Chapter to a relevant partnership the beneficial owner of the partnership shall be identified in the same manner as the beneficial owner of an investment limited partnership is identified; ‘collective investment scheme’ means a relevant investment undertaking— (a) that is widely held, and (b) which holds a diversified portfolio of assets; ‘relevant AIFM’ means an AIFM, within the meaning of the European Union (Alternative Investment Fund Managers) Regulations 2013 ( S.I. No. 257 of 2013 ), authorised under those Regulations; ‘relevant investment undertaking’ means— (a) a common contractual fund, within the meaning of section 739I, (b) an investment limited partnership, within the meaning of section 739J, or (c) a relevant partnership, but where the undertaking referred to in paragraph (a) or (b) is an umbrella scheme, within the meaning of section 739B, it shall mean a sub-fund of that undertaking; ‘relevant partnership’ means— (a) a partnership, or (b) a limited partnership under the Limited Partnerships Act 1907 , the affairs of which are managed by a relevant AIFM and which has been established under the law of the State.

Application (Chapter 10A) 835AVC. This Chapter shall apply to— (a) a reverse hybrid entity, other than a collective investment scheme, in which one or more of the participators is a relevant participator, and (b) a reverse hybrid mismatch outcome.

Reverse hybrid mismatch outcome 835AVD. (1) Subject to subsection (2), a reverse hybrid mismatch outcome shall arise where some or all of the profits or gains of a reverse hybrid entity that are attributable to a relevant participator are subject to neither domestic nor foreign tax.

Interest limitation 31. (1) Part 3 of the Principal Act is amended— (a) in section 37, in subsection (3), by the substitution of “Notwithstanding anything in the Tax Acts, other than Part 35D,” for “Notwithstanding anything in the Tax Acts,”, and (b) in section 38, in subsection (3), by the substitution of “Notwithstanding anything in the Tax Acts, other than Part 35D,” for “Notwithstanding anything in the Tax Acts,”.

Chapter 1

Interpretation and general (Part 35D) Interpretation (Part 35D) 835AY. (1) In this Part— ‘allowable amount’ shall be construed in accordance with subsection (2); ‘alternative body of accounting standards’ means standards that accounts of entities are to comply with which are laid down by such body or bodies having authority to lay down standards of that kind in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, the Republic of Korea, the United States of America, the Republic of India and the People’s Republic of China; ‘associated enterprise’, other than in Chapter 3, means an enterprise that is associated with another enterprise in accordance with subsections (2) and (4) of section 835AA, other than enterprises which would be considered associated enterprises pursuant only to paragraphs (e), (f) or (g) of section 835AA(2); ‘CGT rate’ means— (a) other than in the cases referred to in paragraphs (b) and (c), the rate specified in section 28(3), (b) in the case of a relevant disposal (within the meaning of Chapter 2 of Part 22), the rate specified in section 649A(1)(b), and (c) in the case of a disposal of an asset to which section 747A applies, the rate specified in section 747A(4); ‘consolidating entity’ means an entity which is included in the ultimate consolidated financial statements, other than a non-consolidating entity; ‘de minimis amount’— (a) in respect of an accounting period of 12 months, means €3,000,000, and (b) in respect of an accounting period of less than 12 months, the amount referred to in paragraph (a) reduced pro rata; ‘deductible interest equivalent’ means the amount in respect of interest equivalent that is deducted in calculating the relevant profit or loss of a relevant entity; ‘deemed borrowing cost’ has the meaning assigned to it by section 835AAD(1); ‘Directive (EU) 2016/1164’ has the same meaning as it has in Part 35C; ‘disallowable amount’ means the amount by which the exceeding borrowing costs is greater than the allowable amount; ‘EBITDA’ shall be construed in accordance with section 835AAB(5); ‘EBITDA limit’ means 30 per cent; ‘enterprise’ has the same meaning as it has in Part 35C; ‘entity’ has the same meaning as it has in Part 35C; ‘exceeding borrowing costs’ has the meaning assigned to it by section 835AAB(4); ‘finance cost element of non-finance lease payments’ in respect of a company and an accounting period, means the portion of the deductible lease payment in that accounting period calculated as follows— P x (A - B) /A where— P is the deductible lease payment,

A is the total expected cost of the lease, over the course of the life of the lease on the date the lease was entered into, and B is the value of the right of use asset recognised in the accounts under international accounting standards, or would be so recognised if accounts were prepared in accordance with international accounting standards, on the date the lease was entered into, but where the terms of the lease are amended during the life of the lease such that either of A or B are amended, then, for the accounting period in which that amendment was made and all successive accounting periods, A and B shall be calculated as if a new lease was entered into at the date of that amendment; ‘finance element of finance lease payments’ in respect of a company and an accounting period, means the portion of the deductible, or taxable, finance lease payment, as the case may be, in that accounting period calculated as follows— P x (A/B) where— P is the deductible, or taxable, finance lease payment, as the case may be, A is the expected total finance cost, or finance income, as the case may be, which will be recognised in the accounts under generally accepted accounting practice over the course of the life of the lease on the date the lease was entered into, and B is the total expected cost of the lease, or income of the lease, as the case may be, over the course of the life of the lease on the date the lease was entered into, but where the terms of the lease are amended during the life of the lease such that either of A or B are amended, then, for the accounting period in which that amendment was made and all successive accounting periods, A and B shall be calculated as if a new lease was entered into at the date of amendment; ‘finance income element of non-finance lease payments’ in respect of a company and an accounting period, means the portion of the taxable lease payment in that accounting period calculated as follows— P x (A - B) /A where— P is the taxable lease payment, A is the total expected income of the lease, over the course of the life of the lease on the date the lease was entered into, and B is the value of the leased asset recognised in the accounts under generally accepted accounting practice on the date the lease was entered into less the expected depreciated value of the leased asset at the end of the lease, determined in accordance with the accounting policy in the financial statements for the year in which the lease is entered into, but where the terms of the lease are amended during the life of the lease such that either of A or B are amended, then, for the accounting period in which that amendment was made and all successive accounting periods, A and B shall be calculated as if a new lease was entered into at the date of amendment;

‘finance lease’ means a lease which, under generally accepted accounting practice, falls to be treated as a finance lease; ‘interest equivalent’ means— (a) interest, (b) amounts economically equivalent to interest including— (i) a discount, where securities are issued at a discount, (ii) the finance element of finance lease payments, (iii) the finance income element and finance cost element of non-finance lease payments of a company that carries on a trade of leasing that is treated for the purposes of the Tax Acts as a separate trade distinct from all other activities carried on by such company under section 403(2), (iv) amounts under derivative instruments or hedging arrangements directly connected with the raising of finance, and (v) such portion of the profit or loss on— (I) a financial asset (within the meaning of section 76B), or (II) a financial liability (within the meaning of section 76B), the coupon or return on which principally comprises interest or one or more of the amounts referred to in this paragraph, to the extent that it would be reasonable to consider that such amount is economically equivalent to interest, (c) any amounts referred to in paragraph (a) or (b) claimed by a claimant company under section 420(6), (d) amounts arising directly in connection with raising finance, including— (i) guarantee fees, (ii) arrangement fees, and (iii) commitment fees, (e) foreign exchange gains and losses on interest or amounts economically equivalent to interest, and (f) any amount arising from an arrangement, or part of an arrangement, which could reasonably be considered, when the arrangement is considered in the whole, to be economically equivalent to interest; ‘interest group’ shall be construed in accordance with section 835AAK(1); ‘interest spare capacity’ has the meaning given to it by section 835AAB(4); ‘large scale asset’ means— (a) a development, within the meaning of the Planning and Development Act 2000 , specified in the Seventh Schedule of that Act, approved by— (i) An Bord Pleanála under section 37G of that Act, on foot of an application made pursuant to section 37A(2)(a) or (b) of that Act, or (ii) a local authority under section 170 of that Act, (b) a development, referred to in section 182A of the Planning and Development Act 2000 , approved by An Bord Pleanála under section 182B of that Act, (c) a development, referred to in section 182C of the Planning and Development Act 2000 , approved by An Bord Pleanála under section 182D of that Act, (d) railway works, within the meaning of the

Transport (Railway Infrastructure) Act 2001 , in respect of which an order has been made under section 43 of that Act, (e) a scheme, within the meaning of the Roads Act 1993 , which has been approved under section 49 of that Act, (f) a strategic housing development, within the meaning of Chapter 1 of Part 2 of the Planning and Development (Housing) and Residential Tenancies Act 2016 approved by— (i) An Bord Pleanála, under section 9 of that Act, or (ii) a local authority, under section 170 of the Planning and Development Act 2000 , (g) an asset (within the meaning of the State Authorities (Public Private Partnership Arrangements) Act 2002 ) constructed pursuant to a public private partnership arrangement (within the meaning of that Act), (h) an installation generating energy from renewable sources (within the meaning of the European Union (Renewable Energy) Regulations ( S.I. No. 365 of 2020 )), which is regulated, either solely or jointly with another party, by the Commission for the Regulation of Utilities, or (i) an asset specified by the Minister for Finance in regulations made under section 835AAA(1), that has a minimum expected life span of 10 years; ‘limitation spare capacity’ is the amount by which the exceeding borrowing costs are less than the allowable amount; ‘long-term infrastructure project’ means a project to provide, upgrade, operate or maintain a large scale asset; ‘non-consolidating entity’ means an entity which is valued in ultimate consolidated financial statements— (a) using fair value accounting (within the meaning of international accounting standards), (b) on the basis that it is an asset held for sale or held for distribution (within the meaning of international accounting standards), or (c) where the ultimate consolidated financial statements are prepared under an alternative body of accounting standards, on an equivalent basis under those standards; ‘non-finance element of finance lease payments’ in respect of a company and an accounting period, means the deductible, or taxable, finance lease payments, as the case may be, in that accounting period less the finance element of the finance lease payments; ‘P rate’ is the rate specified in section 21A(3)(a); ‘payment for relief’ means a payment made by one member of an interest group to another member of an interest group pursuant to an agreement between them as respects an allocation of a disallowable amount or total spare capacity, being a payment not exceeding the reduction in tax payable in the current accounting period or successive accounting periods as a result of the allocation in respect of the member of the interest group making the payment;

‘qualifying long-term infrastructure project’ means a long-term infrastructure project— (a) in respect of which the operator is established in, and tax resident in, a Member State, (b) in respect of which the large scale asset concerned is in a Member State, and (c) the income arising from which and the deductible interest equivalent relating to which arise in a Member State; ‘relevant entity’ means a company or an interest group; ‘relevant loss’ shall be construed in accordance with section 835AZ(7); ‘relevant profit’ has the meaning assigned to it by section 835AZ(1); ‘reporting company’ shall be construed in accordance with section 835AAM(1); ‘single company worldwide group’ means a company that is not— (a) a member of a worldwide group, (b) a member of an interest group, or (c) a standalone entity; ‘specified return date for the accounting period’ has the same meaning as it has in Part 41A; ‘standalone entity’ means a company resident in the State that— (a) is not a member of a worldwide group, (b) has no associated enterprises, and (c) does not have a permanent establishment in a territory other than the State; ‘T rate’ is the rate specified in section 21(1)(f); ‘taxable interest equivalent’ means the amount in respect of interest equivalent that is income, profits or gains included in the calculation of the relevant profit or loss of a relevant entity, including a reversal of deductible interest equivalent; ‘total spare capacity’ is the aggregate of interest spare capacity and limitation spare capacity; ‘ultimate consolidated financial statements’ means the consolidated financial statements prepared by an ultimate parent under generally accepted accounting practice or an alternative body of accounting standards; ‘ultimate parent’ means an entity that prepares consolidated financial statements under generally accepted accounting practice, or an alternative body of accounting standards, and whose results are not fully included in any other consolidated financial statements prepared under such a practice or standard; ‘worldwide group’ means the ultimate parent and all consolidating entities in the ultimate consolidated financial statements and ‘member of a worldwide group’ shall be construed accordingly.

Relevant profit and loss 835AZ. (1) Subject to subsections (2) and (3), ‘relevant profit’, in respect of a relevant entity and an accounting period, means— (a) the amount of the profits on which corporation tax falls finally to be borne, and (b) the amount of the gains or losses on a relevant disposal (within the meaning of section 648), reduced by the amount, if any, of— (i) the amount of the excess referred to in subsection (2) of section 243B, to the extent relief may be claimed under that subsection, but for this Part, and (ii) the amount of the excess referred to in subsection (2) of section 396B, to the extent relief may be claimed under that subsection, but for this Part.

Aadj = Aact x (P rate/T rate) where— Aadj is the adjusted amount of charge, income, expense, gain or loss, as the case may be, and Aact is the actual amount of charge, income, expense, gain or loss, as the case may be.

Aadj = Aact x (CGT rate/T rate) where— Aadj is the adjusted amount of charge, income, expense, gain or loss, as the case may be, and Aact is the actual amount of charge, income, expense, gain or loss, as the case may be.

Long-term public infrastructure projects 835AAA. (1) The Minister for Finance, in consultation with the Minister for Public Expenditure and Reform, may make regulations for the purpose of this section specifying an asset is to be treated as a large scale asset, but an asset shall not be so specified unless— (a) specifying the asset would not give rise to a breach of Article 107 of the Treaty of Functioning of the European Union, (b) the purpose of the asset is to enhance the general public interest, (c) it is in the public interest to so specify the asset, and (d) the financing arrangements for the long-term infrastructure project to which the large scale asset relates present special features which justify such specification.

Chapter 2

Interest limitation Interpretation (Chapter 2) 835AAB. (1) In this Chapter— ‘legacy debt’ means a debt the terms of which were agreed before 17 June 2016, together with any contract entered into before or after that date with the sole purpose of eliminating or reducing interest rate risk on that debt, but where the terms of that debt include provision for an amount of principal not yet drawn down at that date, such principal shall only be considered an agreed term of that debt to the extent the lender is legally obliged to make available such amounts upon the happening of milestones as set out in the terms agreed before 17 June 2016; ‘milestone’ means a pre-determined deliverable or project phase defined in the terms of a debt, connected with the drawdown of principal, but does not include a call by the borrower for drawdown of principal.