Direct Tax Acts, Finance Act 2018

129 Irish resident company distributions not generally chargeable to corporation tax
CTA76 s2

Except where otherwise provided by the Corporation Tax Acts, corporation tax shall not be chargeable on dividends and other distributions of a company resident in the State, nor shall any such dividends or distributions be taken into account in computing income for corporation tax.

Go to Revenue Guidance Notes on TCA

Case Law

Taxation of dividends and whether legislation constituting a restriction on freedom of establishment – Proceedings brought by Aberdeen Property Fininvest Alpha Oy [2009] STC 1945

Whether EU law allowed exemption from withholding tax on dividends to companies with seat or establishment in that country, but not to non-residents

Whether the UK tax treatment of foreign dividends and Controlled Foreign Company Legislation was compatible with European Law. Certain conditions applied. Test Claimants in the CFC and Dividend Group v Revenue and Customs Commissioners (Case C-201/05) – 2008 STC 1513

National provision giving tax credits to dividends of Finnish company but not dividends from other EU states was contrary to free movement of capital – Manninen v Finland. Case C-319/02 & [2004] STC 1444

An Austrian income tax provision which taxed foreign dividends at twice the rate of domestic ones, to take account of the underlying tax paid with regard to the latter, was contrary to EU law – Lenz. Case C-315/02

Corporation tax is chargeable on a capital distribution (as opposed to an income distribution) deemed to be received by a company in respect of shares in another resident company – Strand Options and Futures Limited v Vojak [2003] BTC 344; 395

EU law and differing treatment of domestic and foreign dividends received by companies. Test Claimants in the FII Group Litigation v Revenue and Customs Commissioners - [2013] STC 612

Dividends paid to UK company by wholly-owned Dutch subsidiary with UK corporation tax paid on dividends and UK company claimed restitution from HMRC on UK corporation tax unlawfully charged on dividends paid to it by subsidiary and whether UK company entitled to credit at Dutch standard rate of corporation tax for dividends in question. Six Continents Ltd and another v Inland Revenue Commissioners and another – [2016] EWHC 2426 (Ch)

Irish Tax Review Articles

ECJ Litigation to Pay Dividends for Irish Taxpayers. David Fennell – Irish Tax Review, March, 2005

Time to move? UK and Irish Issues on Foreign Profits. Conor Begley and Heather Self, Irish Tax Review, July, 2008

Corporation Tax and Foreign Dividend Income – “Once More Unto The Breach, Dear Friends …”. Tom Maguire, Irish Tax Review, September, 2010

Finance Act 2012: Corporation Tax Changes. Tom Maguire, Irish Tax Review, Issue 2, 2012

Tax Treatment of Foreign Dividends and EU Law: Are We There Yet?. Tom Maguire, Irish Tax Review, Issue 2, 2013

FII GLO and the Additional Foreign Tax Credit: Here We GLO Again? Mark Connor, Irish Tax Review, Issue 4, 2016

Corresponding UK Tax Provision

Section 208, Income and Corporation Taxes Act 1988. Now re-enacted at various places in the Corporation Tax Act 2009. Refer to the Destination Table of that Act for details.

Cross references

129A Dividends paid out of foreign profits

172B Dividend withholding tax on relevant distributions

174 Taxation of dealer’s receipts on purchase of shares by issuing company or by its subsidiary

434 Distributions to be taken into account and meaning of “distributable income”, “investment income”, “estate income”, etc

705J Taxation of shareholders

712 Distributions received from Irish resident companies

714 Life business: computation of profits

717 Pension business

738 Undertakings for collective investment