241 Income tax on payments by non-resident companies

Summary

Under section 238 all taxpayers who make certain payments under deduction of income tax are required to account to the Revenue Commissioners for the tax deducted. In the case of yearly interest payments the obligation to deduct tax and account to Revenue for the tax deducted is contained in section 246. Where the payments are made by a company which is resident in the State, the return and payment requirements are contained in section 239

This section deals with cases where such payments are made by companies which are not resident in the State but which are liable to Irish corporation tax because, for example, they are trading in the State through a branch or agency. Under this section such a company is required, if it is making payments under deduction of income tax, to make a return of those payments to the inspector. In addition, the income tax deducted from the payments is treated as part of the company’s corporation tax liability. Accordingly, in paying preliminary tax under section 958, the company must take into account its liability arising under section 238 and, in the case of interest payments, section 246.

Details

(1) The companies to which the section applies are non-resident companies which are —

• required to account to the Revenue Commissioners for payments made under deduction of tax as required by section 238 or section 246, and
• within the charge to corporation tax.

(2) Such a company is required to make to the inspector a return of payments made under deduction of tax and of the tax deducted. The income tax concerned is treated as corporation tax of the company’s accounting period. This provision applies for the purposes of the charge, assessment, collection and recovery of the tax and any interest or penalties on the tax.

Relevant Date: Finance Act 2021