Revenue Note for Guidance

The content shown on this page is a Note for Guidance produced by the Irish Revenue Commissioners. To view the section of legislation to which the Note for Guidance applies, click the link below:

Revenue Note for Guidance

432 Meaning of “associated company” and “control”


This section defines “associated company” and “control” for the purposes of Part 13.


(1) Two companies are at any time associated if at that time or within one year previously one company controls the other company or both are under common control. Thus, if 2 companies have been associated, they will be treated as continuing to be associated for one year after they cease to satisfy the conditions.

(2) A person controls a company if the person is able to control or to acquire control, either directly or indirectly, of the company’s affairs. Without prejudice to the generality of this provision, a person is regarded as having control of a company if the person has or is entitled to acquire —

  • the majority of the issued share capital or voting power,
  • such part of that capital as would entitle the person on a total distribution of income to more than 50 per cent of such distribution, or
  • such rights as would entitle the person on a winding up or otherwise to more than 50 per cent of the distributable assets.

(3) Where 2 or more persons together satisfy these conditions, the persons concerned are taken to control the company.

(4) A person is treated as entitled to acquire voting power, share capital or rights which that person is entitled to acquire in the future or will at a future date be entitled to acquire.

(5) The rights or powers of a nominee of a person are attributable to the person on whose behalf the nominee has those rights or powers.

(6) The rights and powers of a person and of the person’s associates are to be regarded as belonging to that person. The position is similar in relation to the rights and powers of any company which the person or the person and the person’s associates control. The rights and powers of nominees of an associate are also included but not those of associates of an associate. If this provision can be applied in such a way as to enable control of the company to be exercised by 5 or fewer participators, it is to be so applied.


A company’s issued capital consists of 1,000 ordinary shares. A, B, C, D and E hold 100 shares each. This does not give them control of the company.

X who holds 10 shares is an “associate” of A and is also an associate of another shareholder, Y, who holds 50 shares.

Under subsection (6), the 10 shares held by X may be attributed to either A or Y. If they are attributed to Y, the company still is not under the control of 5 or fewer participators. If they are attributed to A, then A, B, C, D and E between them will hold 510 shares and the company will be under the control of 5 or fewer participators. In these circumstances, the final clause of subsection (6) directs that these 10 shares must be attributed to A.

Relevant Date: Finance Act 2021