997A Credit in respect of tax deducted from emoluments of certain directors

Summary

This section provides that certain individuals, that is those with a “material interest” in the company, will not be given credit for tax deducted under the PAYE system from payments made to them by the company unless there is documentary evidence that the tax has been remitted to the Collector-General.

Details

Definitions

(1)(a) “control” has the same meaning as in section 432.

“ordinary share capital” in relation to a company, means all the issued share capital (by whatever name called) of the company.

(1)(b)(i) For the purposes of this section a person shall have a “material interest” in a company if the person, either on their own or with any connected person(s), or if the connected person with or without any such other connected person, is the beneficial owner of, or is able, directly or indirectly, to control more than 15% of the ordinary share capital of the company.

(1)(b)(ii) Whether a person is connected with another person shall be determined in accordance with section 10.

(2) This section applies to a person to who, in relation to a company, has a material interest in the company.

(3) No credit for tax deducted from the emoluments paid by a company to an individual with a material interest in the company shall be given, unless there is documentary evidence to show that the tax deducted has been remitted by the company to the Collector-General.

(4) Any tax remitted in a year of assessment to the Collector-General which has been deducted by the company from emoluments paid by the company for that year of assessment shall be treated as having been firstly deducted from emoluments of employees in priority to tax deducted from individuals to whom this section applies.

(5) Any tax remitted to the Collector-General which is deducted from emoluments paid to persons with a material interest in the company will be treated as deducted in the same proportion as the emoluments paid to the persons bears to the aggregate amount of emoluments paid by the company to all such persons.

(6) Where insufficient PAYE tax has been remitted in respect of persons to whom this section applies, the credit due to such persons, in respect of PAYE tax remitted to Revenue, cannot exceed the actual tax deducted from the remuneration of such persons and remitted to Revenue.

(7) Any tax remitted by the company to the Collector-General for a year of assessment shall firstly be set against an employer’s liability to employment contributions (PRSI), secondly against Universal Social Charge (USC) and lastly against Income Tax.

(8) An individual has a right to appeal against any decision made by the Revenue Commissioners in relation to Section 997A. An appeal must be made in writing to the Appeal Commissioners within 30 days after the date of the notice of the decision.

Relevant Date: Finance Act 2025