exit tax for corporations transferring assets offshore

[Brendan Burgess]

Vorporation Tax – Anti Tax Avoidance Directive

Exit Tax
As part of Ireland’s commitment to implementing the Anti-Tax
Avoidance Directive (ATAD), Budget 2019 introduces a new ATAD
compliant exit tax regime from Budget night. It will tax unrealised
capital gains where companies migrate or transfer assets offshore
such that they leave the scope of Irish tax. The rate for the new
ATAD compliant exit tax will be set at 12.5%. Early introduction of
this measure will provide certainty to businesses currently located
in Ireland and considering investing in Ireland in the futur

 

[Brendan Burgess]

Controlled Foreign Company (CFC) Rules
The Finance Bill will also provide for the introduction of a Controlled
Foreign Company (CFC) regime as required by the ATAD. CFC rules
are an anti-abuse measure, designed to prevent the diversion of
profits to offshore entities (the CFCs) in low- or no-tax jurisdictions.
CFC rules are traditionally a feature of territorial tax regimes. As
Ireland has a worldwide tax regime, CFC rules have not previously
been a feature of the Irish corporate tax regime

 

[Setanta12]

Interesting to note that Ireland was argued to be a low-tax jurisdiction in some overseas court-cases where their local CFC rules were challenged by tax-payers. (The taxpayer won in that particular instance)