700 Special computational provisions

This section provides special rules in relation to share and loan interest paid by a credit union and an industrial and provident society. Such interest is not treated as a distribution. It is to be paid without deduction of income tax and is to be chargeable to tax under Case III of Schedule D, except where it is payable to a person whose usual place of abode is outside the State. (In respect of dividends paid by credit unions on or after 1 January, 2001 refer to Chapter 5 of Part 8.) For the purposes of computing an industrial and provident society’s corporation tax liability, interest paid by the society under section 243 (allowance of charges on income) is offset against the company’s total profits. Every industrial and provident society must make a return to the Revenue Commissioners each year on or before the next 31 January stating the share or loan interest paid in excess of €89 to members in the year of assessment ending before that date. If the society fails to do so, it is not entitled to a deduction for the interest paid. If a society does not make a full return it is not entitled to a deduction under section 97(2)(e) (computational rules and allowable deductions), 243 (allowance of charges on income) or 699(1) (deduction as expenses of certain sums) for share interest or loan interest paid, and any additional tax due as a result of this restriction is to be raised by means of an additional assessment.

Relevant Date: Finance Act 2021