Revenue Note for Guidance

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Revenue Note for Guidance

Treatment for double taxation relief purposes of foreign tax incentive reliefs


This section provides that tax spared under foreign law is, where a double taxation agreement between the territory concerned and Ireland so provide, to be treated as having been payable. The concept known as “tax sparing” relates to the giving of a credit against Irish tax or other double taxation relief in respect of foreign tax which has not actually been paid because the tax concerned has been foregone by the country concerned because of a relief from tax available in that country which is designed to promote industrial or other development in that country.


(2) Any tax which would have been payable in the territory concerned but for a relief under the law of that territory given with a view to promoting certain developments outside of the State is treated for the purposes of giving double taxation relief as tax payable in the territory if a double taxation agreement between that territory and Ireland so provides.

(1) This treatment applies to any relief given with a view to promoting industrial, commercial, scientific, educational or other development in a territory outside of the State.

(3) The Revenue Commissioners are given a general power to make regulations for the purpose of giving effect to the tax-sparing relief. No such regulations have been made.

Relevant Date: Finance Act 2020