Revenue E-Brief

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Revenue E-Brief Issue 38, 17 September 2013

Relevant Contracts Tax – Clarification on Connected Persons Rule (Section 530A (1)(c) TCA, 1997)

Section 531 (1)(c) TCA 1997 provides that a person connected with a company involved in a construction, land development, meat processing or forestry business must operate RCT on payments made by that person to a subcontractor in the performance of a relevant contract.

Articles in Tax Briefing Issue 66 (July 2007) and Tax Briefing Issue 71 (April 2009) provided clarification on when the connected persons rule applies. However, following a review of the connected person rule, Revenue can confirm that the rule will not apply where the only connected parties carrying on relevant operations are non-resident and are not carrying on a trade or business in the State through a branch or agency. The RCT provisions will therefore not apply to a person solely on the basis that that person is connected to a company outside the State which carries on these activities outside the State. See Part 18.02.02 of the Income Tax, Capital Gains Tax, Corporation Tax section of the Tax and Duty Manuals.