111K Effect of qualified domestic top-up tax

(1) Notwithstanding section 111AI (which provides for the qualified domestic top-up tax safe harbour), where a Member State does not apply a qualified domestic top-up tax to collect any additional top-up tax arising in accordance with Article 29 of the Directive (which provides for additional top-up tax to be collected where there is an adjustment to covered taxes or qualifying income or loss that results in the re-computation of the effective tax rate and top-up tax of the MNE group or the large-scale domestic group for a prior fiscal year), then additional top-up tax shall be computed pursuant to section 111AF and such additional top-up tax shall be considered to be jurisdictional top-up tax for the purposes of section 111AD(3) (which provides for the calculation of top-up tax).

(2) Where the amount of qualified domestic top-up tax in respect of a constituent entity for a fiscal year has not been paid within the four fiscal years following the fiscal year in which it was due, the amount of domestic top-up tax that was not paid, shall be added to the jurisdictional top-up tax in respect of the jurisdiction where the constituent entity is located for the purposes of section 111AD(3).

(3) Where a qualified domestic top-up tax is applied by a Member State or third country jurisdiction, the financial accounting net income or loss of the constituent entities located in that Member State or third country jurisdiction may be determined in accordance with:

• (3)(a) an acceptable financial accounting standard, or
• (3)(b) an authorised financial accounting standard that is different than the financial accounting standard used in the consolidated financial statements of the ultimate parent entity, provided that such financial accounting net income or loss is adjusted to prevent any material competitive distortion.

(4) Where an amount of domestic top-up tax in respect of a qualifying entity for a fiscal year has not been paid to and collected by the Collector-General within 4 fiscal years following the fiscal year in which it was due, that amount of domestic top-up tax shall no longer be due and payable to the Revenue Commissioners.

Relevant Date: Finance Act 2024