Revenue Precedents

Whether interest payable on borrowings between companies carrying on relevant trading operations within the meaning of section 445 or 446 TCA 1997 may be paid without deduction of tax? Yes, provided that the following conditions are satisfied: a) the loan is in a foreign currency; b) the making of the loan is covered by the terms of the certificate of the lending company i.e. it's licensed trading operations include lending to other IFSC/Shannon companies (in this connection, the lender should provide written confirmation that this is the case and that it will remain so throughout the period of the loan); c) the loan is applied by the borrower for the purpose of it's own licensed trading operations; d) authorisations are granted on a case by case basis. Applications for exemption should be made in letter form to the Revenue Commissioners, Direct Taxes: Incentives Branch, Dublin Castle, Dublin 2. 5047/97

Whether obligation to deduct and account for tax applies where payment is made from taxed profits? Yes; section 246 treats a payment of interest as one to which section 238 TCA applies i.e. the payment is treated as made out of profits or gains not brought into charge to tax. 922017

Where a local authority is late in making a payment of an amount under a compulsory purchase order and is required to pay interest on such amount because it is late, the interest “yearly interest” is within the meaning of section 246 1997. IT952534