Revenue Note for Guidance

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Revenue Note for Guidance

997A Credit in respect of tax deducted from emoluments of certain directors


Certain directors of companies, that is, those with “material interest” in the company will not be given credit for PAYE tax deducted from payments made to them by the company unless there is documentary evidence that the tax has been remitted to the Collector-General.



(1)(a)control” has the meaning assigned to it in section 432.

ordinary share capital” in relation to a company, means all the issued share capital (by whatsoever name called) of the company.

(1)(b) For the purposes of this section a person shall have a “material interest” in a company if the person on the person’s own or with any connected person/s or if the connected person with or without any such other connected person is the beneficial owner of, or is able directly or through the medium of other companies or any other indirect means to control more than 15% of the ordinary share capital of the company and connected persons shall be determined in accordance with section 10.


(2) The section applies to a person to who, in relation to a company, has a material interest in the company.

(3) No credit for tax deducted from the emoluments paid by a company to a director/employee with a material interest in the company shall be given, unless there is documentary evidence to show that the tax deducted has been remitted by the company to the Collector-General.

(4) Any tax remitted in a year of assessment to the Collector-General which has been deducted by the company from emoluments paid by the company for that year of assessment shall be treated as having been firstly deducted from emoluments of employees and in priority to tax deducted from directors or employees to whom this section applies.

(5) Any tax remitted to the Collector-General which is deducted from emoluments paid to the directors with a material interest in the company will be treated as deducted in the same proportion as the emoluments paid to the person bears to the aggregate amount of emoluments paid by the company to all such directors.

(6) In the case where insufficient PAYE tax has been remitted in respect of directors/employees to whom this section applies, the credit due to such director/employee in respect of PAYE tax remitted to Revenue cannot exceed the PAYE tax actually deducted from the remuneration of such director/employee and remitted to Revenue.

(7) Any tax remitted by the company to the Collector-General for a year of assessment shall firstly be set against an employers liability to employment contributions (PRSI), secondly against universal social charge and lastly against income tax.

(8) An individual has a right to appeal against any decision made by the Revenue Commissioners in relation to Section 997A in writing to the Appeal Commissioners within 30 days after the date of the notice of the decision.

Relevant Date: Finance Act 2020