Revenue has updated Tax and Duty Manual Part 02-02-03 to highlight the expiration of the transition period for companies incorporated before 1 January 2015 for the purposes of determining a company’s tax residency. Tax residency rules for companies changed under Finance Act 2014 to provide that all companies incorporated in Ireland are tax resident here unless the company is tax resident elsewhere under the term of a double tax treaty. For companies incorporated in Ireland before 1 January 2015, a transition period applied until 31 December 2020 and section 23A as it was before the 2014 Finance Act amendment continued to apply during the transition period.

Then Minister for Finance, Michael Noonan, in his 2015 Budget Day speech said “Aggressive tax planning by multi-national companies has been criticised by governments across the globe and has damaged the reputation of many countries. Schemes that exploit mismatches in tax legislation are being heavily scrutinised by the OECD and others and through the Base Erosion and Profit Shifting project they will come to an end over time.

The so called “Double Irish” is one of many such schemes. I am abolishing the ability of companies to use the “Double Irish” by changing our residency rules to require all companies registered in Ireland to also be tax resident. This legal change will take effect from the 1st of January 2015 for new companies. For existing companies, there will be provision for a transition period until the end of 2020.”

For further details on tax residency rules for companies, see eBrief No. 020/21.