Revenue Note for Guidance

The content shown on this page is a Note for Guidance produced by the Irish Revenue Commissioners. To view the section of legislation to which the Note for Guidance applies, click the link below:

Revenue Note for Guidance

243A Restriction of relevant charges on income


This section places a ringfence on the deduction of charges incurred by a company in an activity which is taxable at the standard rate of corporation tax.

The general corporation tax rule in relation to “charges on income” is that charges may be offset against total profits of the company for the accounting period. Any charges incurred for the purposes of a trade which are not offset in this way are carried forward and offset against the profits of the company concerned in subsequent accounting periods.

This section ringfences the offset of trading charges incurred in a trade which is subject to tax at the standard corporation tax rate. Where such charges incurred in an accounting period are being offset sideways in that accounting period or backwards to the previous accounting period, they may only be offset against income which is taxable at the standard rate. A similar restriction applies to the offset of such losses under group relief (see section 420A).


(1),(2) & (3)relevant trading charges” are identified as charges paid for the purpose of a trade other than so much of the charges as relate to an excepted trade (i.e. a trade which is taxable at the 25 per cent rate). The section provides that relevant trading charges may not be set off under section 243 against a company’s profits for an accounting period. Instead, those charges may only be set against relevant trading income and certain other income. “Relevant trading income” is identified as trading income of a company for an accounting period other than trading income which is taxable at the 25 per cent rate.

The section thus allows charges paid for a trade the income from which is taxed at the standard corporation tax rate to be offset only against income taxable at the standard rate. Standard rate charges may also be set against income of a trade of non-life insurance, reinsurance and against the investment income of a life assurance company that is attributable to its shareholders.

Relevant Date: Finance Act 2017