Revenue Note for Guidance

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Revenue Note for Guidance

600F Certificates of qualification

Summary

This section provides for the certification process for a company to be issued certificates of qualification. In order to be eligible to claim this relief, amongst other conditions, a qualifying investor must hold a copy of the company’s certificates of qualification which are valid at the time of investment. The certificate of qualification process is a two-step process, a company must obtain a certificate of going concern and a certificate of commercial innovation. This section also provides that the Revenue Commissioners may consult with Enterprise Ireland for the purposes of considering applications for certificates.

Details

(1)A company (referred to in this section as the “applicant company”) that is seeking to raise investments from qualifying investors or qualifying partnerships may make an application to the Revenue Commissioners for the certificates of qualification.

(1)(a)An applicant company may apply to the Revenue Commissioners for—

  1. (a)(i)a certificate of going concern, and
  2. (a)(ii)a certificate of commercial innovation.

(1)(b)An applicant company is required to provide certain information to the Revenue Commissioners. The application under paragraph (a) must include—

  1. (b)(i)a business plan in respect of which the company is seeking investment,
  2. (b)(ii)relevant shareholder information of the company which includes details of the shareholders of the company (such as the name and address of the shareholders) and any shareholdings or ownership interests of the shareholders in linked businesses or partner businesses, and
  3. (b)(iii)any other information as requested by the Revenue Commissioners in order to determine if the company satisfies certain conditions as prescribed under subsection (2) of this section.

(2)There are a number of conditions that a company must satisfy in order to be eligible to make an application to the Revenue Commissioners for the certificates of qualification, pursuant to subsection (1) of this section. In order to apply for a certificate of going concern and/or a certificate of commercial innovation, the applicant company must fulfil the conditions as set out in paragraphs (a) to (d) of subsection (2).

(2)(a)The applicant company must satisfy the conditions laid out in this paragraph.

  1. (a)(i)The applicant company must be incorporated in the State, another EEA state or the UK;
  2. (a)(ii)The applicant company must be tax resident in the State, another EEA state or the UK and carries on, or intends to carry on relevant trading activities from a fixed place of business in the State;
  3. (a)(iii)The applicant company must hold a tax clearance certificate within the meaning of section 1095;
  4. (a)(iv)The applicant company—
    1. (a)(iv)(I)does not control, either on its own or together with any person connected with the company, any company other than a qualifying subsidiary, and
    2. (a)(iv)(II)is not under the control of another company, or of another company and any person connected with that company, other than NAMA, and there must not be arrangements in place that would cause the company to come under such control as referred to in clause (I) or (II) within 3 years from the issuance of a certificate of commercial innovation;
  5. (a)(v)The applicant company is a company that—
    1. (a)(v)(I)exists wholly for the purpose of carrying on relevant trading activities, or
    2. (a)(v)(II)is a holding company whose business consists, or will consist, wholly of—
      1. (a)(v)(II)(A)the holding of shares or securities, or of making loans to one or more qualifying subsidiaries of the company, or
      2. (a)(v)(II)(B)both the holding of shares or securities, or of making loans and the carrying on of relevant trading activities where relevant trading activities are carried on from a fixed place of business in the State, and the money raised through the issue of eligible shares for the purposes of the relevant trading activities which are being carried on by a qualifying subsidiary or which a qualifying subsidiary intends to carry on, shall be used only for the purpose of acquiring eligible shares in the qualifying subsidiary;
  6. (a)(vi)The applicant company must be an innovative enterprise, or one or more than one qualifying subsidiary of the company is an innovative enterprise;
  7. (a)(vii)The applicant company is—
    1. (a)(vii)(I)a company that it is reasonable to consider intends to, and has sufficient expertise and experience, to implement its business plan, or
    2. (a)(vii)(II)a company referred to in paragraph (v)(II) (i.e. it is a holding company) and it is reasonable to consider the company and its qualifying subsidiary have sufficient expertise and experience to implement their respective business plan;

(2)(b)Each company of the relief group of which the applicant company is a member must meet the following conditions—

  1. (b)(i)each company of the relief group must be unlisted, and no arrangements must be in existence in relation to a company becoming a listed company,
  2. (b)(ii)each company of the relief group must not be subject to a recovery order, and
  3. (b)(iii)all shares are fully paid up in respect of each company of the relief group.

(2)(c)No company or business which is in the relief group of which the applicant company is a member can be in existence for more than 7 years at the date of application for the certificates of qualification.

  1. (c)(i)No company in the relief group, or predecessor company in the case of a company formed following an acquisition or merger, can be more than 7 years old at the date the application for the certificates of qualification under section 600F(1) is made.
  2. (c)(ii)In the case of a merger or acquisition, where the acquisition or merger was with a member of the relief group other than the company, the date it commenced carrying on the enterprise cannot be more than 7 years prior to the date of the application for the certificates of qualification under section 600F(1) is made.
  3. (c)(iii)Where a member is an enterprise other than a company, the date it commenced carrying on the enterprise cannot be more than 7 years prior to the date of the application for the certificates of qualification under section 600F(1) is made.

(2)(d)The relief group of which the applicant company is a member must—

  1. (d)(i)be an SME, and
  2. (d)(ii)not be an undertaking in difficulty.

(3)The Revenue Commissioners will issue a certificate called a “certificate of going concern” where the applicant company has demonstrated to the Revenue Commissioners that it satisfies certain conditions.

(a)(i)A certificate of going concern will issue to a company where the company has demonstrated to the satisfaction of the Revenue Commissioners that the relief group of which the applicant company is a member satisfies the conditions specified in subsection (2)(d) (i.e. it is an SME and not an undertaking in difficulty).

(a)(ii)Where the applicant company has not demonstrated to the satisfaction of the Revenue Commissioners that the relief group of which the applicant company is a member, satisfies the conditions specified in paragraph (i) or (ii) in subsection (2)(d), (i.e. whether it is an SME or, an undertaking in difficulty), the Revenue Commissioners will issue a determination to this effect, which will outline the reasons for the determination.

(3)(b)The Revenue Commissioners may issue to the applicant company a certificate, or a renewal of a certificate, of going concern. The Revenue Commissioners may consult with Enterprise Ireland on whether a company satisfies the conditions to be issued a certificate of going concern. Where the Revenue Commissioners consult with Enterprise Ireland for these purposes, the Revenue Commissioners may take into account any recommendations or reports Enterprise Ireland shall make to the Revenue Commissioners on whether or not the company has demonstrated that it has satisfied the conditions necessary to obtain a certificate of going concern.

(3)(c)Where the Revenue Commissioners have reason to believe that the relief group of which the applicant company is a member, or any company that is a member of the relief group, has not demonstrated the conditions under subparagraphs (i) to (v) of paragraph (a), or paragraph (b) or (c) of subsection (2) are met, in order to be issued a certificate or a renewal of a certificate, of going concern, the Revenue Commissioners shall issue a determination stating the reason for this decision.

(3)(d)An applicant company aggrieved by a decision under paragraph (a)(ii) (i.e. where the applicant company or the relief group of which the applicant company is a member does not satisfy that, it is an SME, or is not an undertaking in difficulty) or paragraph (c) (i.e. where the applicant company or the relief group of which the applicant company is a member does not satisfy the necessary conditions as outlined under subsection (2)(a)(i) to (v), subsection (2)(b) and subsection (2)(c) that a company is required to satisfy in order to be make an application to the Revenue Commissioners for the certificates of qualification) has 30 days after the date of the notice of the determination, in which to appeal such a determination to the Tax Appeal Commission in accordance with section 949I.

(3)(e)Where a company holds a valid certificate of going concern, and the certificate of going concern has expired or is about to expire, the company may apply to the Revenue Commissioners for a renewal of its certificate of going concern. The provisions of this section apply on a renewal of a certificate of going concern as it would for an application for a certificate of going concern, with any necessary modifications.

(3)(f)Subject to section 600P, which provides for the withdrawal of certificates of qualification in certain circumstances, a certificate of going concern shall be valid for the later of two days.

  1. (3)(f)(i)The first of the two days to be considered is the day that is the earlier of three days. This first day is the earlier of—
    1. (f)(i)(I)the day that the oldest company in the relief group is registered for 3 years,
    2. (f)(i)(II)where any company that is a member of the relief group was formed by way of acquisition or merger, it is the day which is 3 years from the date of registration of any company that was party to the acquisition or merger, or
    3. (f)(i)(III)where a member of the relief group is an enterprise other than a company, it is the day that is 3 years from the date that enterprise commenced carrying on the enterprise, or
  2. (f)(ii)The second of the two days to be considered is the day that is the earlier of two days. These two days to be considered are—
    1. (f)(ii)(I)the first of the second day to be considered for the purposes of determining the validity period of a certificate of going concern is the later of two days—
      1. (f)(ii)(I) (A)the first day is the day that is the last day of the accounting period, of the company to which the certificate was issued, in which the certificate was issued, or
      2. (f)(ii)(I) (B)the second day is the day that is 9 months after the day on which the certificate of going concern issued to the company in accordance with subclause (A) where that day is later than the day referred to in subclause (A), or
      3. (f)(ii)(II)the second day of the second day to be considered is the day on which the certificate of commercial innovation ceases to be valid, where the certificate of going concern was renewed in accordance with paragraph (e). This acts as a backstop to ensure that a certificate of going concern will only remain valid for the period of validity of the certificate of commercial innovation.

This subsection provides for the issue of a second certificate, the certificate of commercial innovation, which confirms the company has demonstrated to the Revenue Commissioners that:

  • the company, or one or more than one qualifying subsidiary of the company, is an innovative company, and
  • the company has a business plan that it is reasonable to consider can be implemented by the company, or where the company is a company referred to in subsection (2)(a)(v)(II) it is reasonable to consider the company and its qualifying subsidiary intend to, and have sufficient expertise and experience, to implement their respective business plan.

(4)The Revenue Commissioners may consult with Enterprise Ireland on whether the applicant company satisfies these conditions.

(4)(a)The Revenue Commissioners will issue the applicant company either, a certificate of commercial innovation where the applicant company has demonstrated to the Revenue Commissioners that it satisfies certain conditions, or a determination in respect of a certificate of commercial innovation where the applicant company has not demonstrated to the Revenue Commissioners that it satisfies certain conditions.

  1. (a)(i)The Revenue Commissioners will issue a certificate of commercial innovation where the applicant company has demonstrated to the Revenue Commissioners that the applicant company satisfies the conditions specified in subparagraphs (vi) and (vii) of subsection (2)(a), (i.e. it is an innovative enterprise (or one or more than one qualifying subsidiary of the applicant company is an innovative enterprise) and has a business plan that it is reasonable to consider can be implemented by the company (or where the applicant company is a holding company, it is reasonable to consider the company and its qualifying subsidiary intend to, and have sufficient expertise and experience, to implement their respective business plan), or
  2. (a)(ii)The Revenue Commissioners will issue a determination that the applicant company has not demonstrated to the satisfaction of the Revenue Commissioners that the applicant company satisfies the conditions specified in subparagraphs (vi) and (vii) of subsection (2)(a) (i.e. the company is an innovative enterprise, (or one or more than one qualifying subsidiary of the company is an innovative enterprise), and has a business plan that it is reasonable to consider can be implemented by the company (or where the company is a holding company, it is reasonable to consider the company and its qualifying subsidiary intend to, and have sufficient expertise and experience, to implement their respective business plan). The Revenue Commissioners will provide the reasons for the determination.

(4)(b)The Revenue Commissioners may issue to the applicant company a certificate of commercial innovation. The Revenue Commissioners may consult with Enterprise Ireland on whether a company satisfies the conditions to be issued a certificate of commercial innovation. Where the Revenue Commissioners consult with Enterprise Ireland for these purposes, the Revenue Commissioners may take into account any recommendations or report Enterprise Ireland shall make to the Revenue Commissioners on whether or not the company has demonstrated that it has satisfied the conditions necessary to obtain a certificate of commercial innovation.

(4)(c)Where the Revenue Commissioners have reason to believe that the relief group of which the applicant company is a member, or any company that is a member of the relief group, has not demonstrated that the conditions under paragraphs (a) to (d) of subsection (2) are met (these are the necessary conditions as outlined under subsection (2) that a company must satisfy in order to apply to the Revenue Commissioners for certificates of qualification), the Revenue Commissioners shall not issue a certificate of commercial innovation..

(4)(d)An applicant company aggrieved by a decision under paragraph (a)(ii) (where the Revenue Commissioners will not issue a certificate of commercial innovation on the basis that the applicant company has not demonstrated that the applicant company or its qualifying subsidiary is an innovative enterprise, and that it is reasonable to consider that the applicant company or its qualifying subsidiary intend to, and has sufficient expertise and experience, to implement their respective business plan) has 30 days after the date of the notice of the determination, in which to appeal such a determination to the Tax Appeal Commission in accordance with section 949I.

(4)(e)Subject to section 600P TCA 1997 which provides for the withdrawal of the certificates of qualification in certain circumstances, a certificate of commercial innovation will be valid until the date that the oldest member of the relief group is established for 7 years. This will be the earliest of three dates which are contained in subparagraphs (i), (ii) and (iii) of subsection (4)(e).

  1. (e)(i)The first date of these three dates is the date of the registration of any company that is a member of the relief group of which the applicant company is a member. Thus, the certificate of commercial innovation may remain valid to the date the oldest company in the relief group is registered for seven years.
  2. (e)(ii)The second date is comprised of either of the following two dates—
    1. (e)(ii)(I)the date of the registration of any company that was party to the acquisition or merger where any company that is a member of the relief group was formed by way of acquisition or merger. Therefore, the certificate of commercial innovation may remain valid until the date the oldest company in the relief group, where any company was formed by way of acquisition or merger, is registered for seven years.
    2. (e)(ii)(II)for the purpose of an acquisition or merger referred to in clause (I), the date of the commencement of the carrying of an enterprise where the acquisition or merger was with a party other than the company. Thus, where there is an acquisition or merger with a party that is an unincorporated enterprise the certificate of commercial innovation may remain valid until the date which is seven years from the date that unincorporated enterprise commenced carrying on its business.
    3. (e)(iii)The third date of these three dates is the date of the commencement of the carrying on of an enterprise, where a member of the relief group is an enterprise other than a company. Thus, the certificate of commercial innovation may remain valid until the date which is seven years from the date of the commencement of a business by an unincorporated member of the relief group.

(5)Enterprise Ireland may consult with any person who in their opinion may assist in providing any recommendations or report where the Revenue Commissioners consult with Enterprise Ireland, to determine whether an applicant company satisfies the conditions in order to be issued, or retain, certificates of qualification. Subsection (5) is comprised of paragraphs (a) to (f) which outline the steps to be followed before Enterprise Ireland may engage or share information with the person Enterprise Ireland intend to consult with.

(5)(a)The Revenue Commissioners may authorise the disclosure of information by Enterprise Ireland to a person they may consult, who may in the opinion of Enterprise Ireland be of assistance in providing any recommendations or report referred to in subsection (3)(b) or (4)(b) or section 600P(4)(d)(ii) (i.e. for ascertaining whether the applicant company satisfies the criteria in order to be issued a certificate of going concern, or a certificate of commercial innovation or the retention of these certificates where additional information come to the attention of the Revenue Commissioners and such information may invalidate the certificates of qualification).

(5)(b)Before disclosing information to the person referred to under paragraph (a) (i.e., the person Enterprise Ireland intend to engage and consult with), Enterprise Ireland will be required to notify the Revenue Commissioners in writing of—

  1. (b)(i)the purposes of the consultation,
  2. (b)(ii)the intention to disclose information,
  3. (b)(iii)the information that Enterprise Ireland intends to disclose, and
  4. (b)(iv)the identity of the person Enterprise Ireland intends to consult.

(5)(c)The Revenue Commissioners may authorise the disclosure of information by Enterprise Ireland in certain circumstances, notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise.

  1. (c)(i)The Revenue Commissioners may authorise the disclosure of information to the person referred to in paragraph (a) where the applicant company provides consent regarding same pursuant to paragraph (d). This is notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise.
  2. (c)(ii)Enterprise Ireland will not be authorised to disclose information to the person referred to in paragraph (a) (i.e., the person Enterprise Ireland intend to engage and consult with), without the applicant company providing consent regarding same pursuant to paragraph (d).

(5)(d)Before the Revenue Commissioners may provide the authorisation referred to in paragraph (c) to Enterprise Ireland (i.e., to engage with the person and disclose information to that person), the Revenue Commissioners shall notify the applicant company in writing of—

  1. (d)(i)the purposes of the consultation,
  2. (d)(ii)the intention to disclose information,
  3. (d)(iii)the information Enterprise Ireland intends to disclose, and
  4. (d)(iv)the identity of the person Enterprise Ireland intends to consult.

The applicant company has 30 days after the date of the notice to show to the satisfaction of the Revenue Commissioners that the Revenue Commissioners providing the approval referred to in paragraph (c) (i.e., providing the approval to Enterprise Ireland to engage with the person and disclose information to that person) could prejudice the company’s business.

(5)(e)Where the applicant company does not show to the satisfaction of the Revenue Commissioners that disclosure of such information to the person referred to in paragraph (c) (i.e., the person Enterprise Ireland intends to engage) could prejudice the company’s business within the 30-day timeframe, the Revenue Commissioners may provide the approval to Enterprise Ireland to disclose the information to the consultant where the Revenue Commissioners—

  1. (e)(i)notify the company in writing of the decision to provide the approval referred to in paragraph (c) (i.e., providing the approval to Enterprise Ireland to engage with the person and the authorisation to disclose the information to the person), and
  2. (e)(ii)allow the company 30 days after the date of the notice to appeal the decision to the Appeal Commissioners in accordance with section 949I.

(5)(f)An applicant company aggrieved by a decision under paragraph (e) may appeal such a determination to the Appeal Commissioners within a 30-day period after the date of the notice of the decision.

(6)Certain details are to be included in the certificates of qualification. Paragraphs (a) to (e) provide for the details to be included.

(6)(a)The certificate type issued (either the certificate of going concern or the certificate of commercial innovation) shall be included.

(6)(b)The name, address, Companies Registration Office (CRO) number of the company (or equivalent), shall be included.

(6)(c)The date of issue of the certificate shall be included.

(6)(d)The validity period of the certificate shall be included.

(6)(e)A unique sequential identification number shall be assigned to each certificate.

(7)A publicly available register of certificates of qualification shall be maintained and the information to be included in the register is provided. Paragraphs (a) to (c) provide for the details to be included in the register.

(7)(a)The Revenue Commissioners shall establish and maintain a register of companies to which certificates of qualification have been issued.

(7)(b)The Revenue Commissioners shall publish the register on a website.

(7)(c)The register shall only contain the information specified in subsection (6) in respect of the certificates of qualification that have been issued. Where the certificates of qualification have been withdrawn, the date of withdrawal shall be included.

Relevant Date: Finance Act 2024