IRELAND Law and Practice Contributed by: Amelia O’Beirne and Trevor Glavey, A&L Goodbody
in an amount of tax, refundable or otherwise payable to a person. In considering whether a transaction constitutes a “tax avoidance transaction”, Revenue will consider a vari - ety of factors, including the following: • the form and substance of the transaction; • the substance of any transaction(s) that may rea - sonably be regarded as being directly or indirectly related or connected with the transaction in ques - tion; and • the final outcome of the transaction and any com - bination of those other transactions which are so related or connected. Revenue will also have regard to the results of the transaction, its use as a means of achieving those results and any other means by which the results or any part of those results could have been achieved. 5.2 Anti-Avoidance Mechanisms Irish tax law contains a number of anti-tax avoidance provisions. Generally, these provisions require that a relief can be relied upon only where the transaction is undertaken for bona fide commercial purposes and is not carried out primarily for tax avoidance purposes. Section 811C TCA sets out the Irish GAAR provision for transactions entered into after 23 October 2014 (see 5.1 Definition and Identification of Tax Fraud, Evasion, Tax Avoidance and Abusive Schemes for what constitutes a “tax avoidance transaction” and the meaning of “tax advantage” for the purposes of Section 811C TCA). Under the GAAR, Revenue can reverse an assessment on the basis that it would be reasonable to consider that the transaction gives rise to a tax advantage and that obtaining the tax advan - tage was the purpose of the transaction. Ireland’s GAAR does not apply where a transaction (or series of transactions) is: • undertaken with a view, directly or indirectly, to the realisation of profits in the course of a business activity of a business carried on by a person, and is not undertaken or arranged primarily to give rise to a tax advantage; or
• undertaken or arranged for the purpose of obtain - ing the benefit of any relief, allowance or other abatement, and would not result directly or indi - rectly in a misuse or abuse of the relevant provision having regard to the purposes for which it was provided. Separately, Schedule 33 TCA contains a list of specific targeted anti-tax avoidance rules that are contained throughout Ireland’s tax legislation. This list includes, for example, anti-avoidance rules in respect of bond washing, the misuse of losses and the transfer of rights to receive interest from securities. As a member state of the EU, Ireland has also imple - mented the provisions of the Anti-Tax Avoidance Directive (ATAD). In line with its commitments under ATAD, in recent years Ireland has introduced: • controlled foreign company rules; • hybrid and reverse hybrid mismatch rules; As a member state of the EU, Ireland has adopted the EU list of non-cooperative jurisdictions for tax pur - poses. The list currently includes American Samoa, Anguilla, Guam, Palau, Panama, Russia, Turks and Caicos Islands, the US Virgin Islands, Vanuatu and Vietnam. The Finance (No 2) Act 2023 introduced certain defen - sive measures with effect from 1 April 2024, applying withholding taxes to outbound payments to associ - ated entities of interest, dividends and royalties where the recipient is resident or situated in a jurisdiction that is on the EU list of non-cooperative jurisdictions or in a no-tax or zero-tax jurisdiction. Arrangements that were in place on or before 19 October 2023 were grandfathered to the later date of 1 January 2025. In broad terms, where Ireland’s outbound payments defensive measures apply, they remove certain exclu - sions from the obligation to deduct withholding taxes and impose certain reporting obligations to Revenue on the payer. • an ATAD-compliant exit tax; and • interest limitation rules (ILRs). 5.3 Blacklists and Non-Cooperative Jurisdictions
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