IRELAND Law and Practice Contributed by: Diarmuid Mawe, Craig Kenny, Katelin Toomey and William Fogarty, Maples Group
and registration must be completed electroni - cally. Failure to comply may only be remedied by a costly court application. The creation of security does not attract tax, although a written notification must be made to Revenue by both the charge-holder and any subsequent transferee of that charge where a company creates a fixed charge over its book debts. Withholding Tax Where repayments under a security document or loan agreement include interest payments with an Irish source, a 20% withholding tax must be applied to the payments in Ireland. Numerous exemptions are available to compa - nies that make payments of Irish-source inter - est to foreign lenders. Foreign lenders that are “qualifying lenders” should be entitled to receive Irish-source interest payments free from the withholding tax; qualifying lenders include cer - tain foreign banks, companies that are resident for tax purposes in the EU or in jurisdictions with a double tax treaty agreement with Ireland, and certain treaty lenders. Capital Gains Tax The sale of Irish real estate, or of unquoted shares in companies deriving the greater part of their value from Irish real estate, will be subject to Irish capital gains tax. The gain is calculated on the proceeds of sale minus acquisition and enhancement costs, and minus the incidental costs of acquisition and the incidental costs of disposal. Irish capital gains tax is subject to a withholding procedure applicable to the seller’s capital gains tax liability. The procedure requires the buyer to withhold 15% of the consideration and pay this amount to Revenue, unless the seller provides a
clearance certificate. A capital gains clearance certificate is automatically available on applica - tion to Revenue if the seller is resident in Ire - land for tax purposes. A non-resident seller will need to agree and discharge its capital gains tax liability in order to obtain a clearance certifi - cate. This withholding procedure only applies to a buyer where the consideration payable to the seller exceeds the relevant threshold at the date of the transfer agreement (currently EUR500,000 or EUR1 million if the asset sold is a house or an apartment). The current rate of capital gains tax is 33%. Registration Fee A registration fee of EUR175 is payable to reg - ister security in the Land Registry and EUR50 to register security in the Registry of Deeds. 3.5 Legal Requirements Before an Entity Can Give Valid Security The CA prohibits the provision of financial assis - tance by an Irish company in the form of a guar - antee, security or otherwise to a person that is purchasing or subscribing for shares in the company or its holding company. There is a vali - dation procedure by which financial assistance may be approved in advance, and the approving documentation must be filed with the CRO by the company within the prescribed time. The CA contains a prohibition on Irish compa - nies providing guarantees or security in relation to the debts or obligations of its directors (or directors of its holding company) or persons connected to those directors (including family members and spouses). There is an exemption from this prohibition if the debts or obligations relate to a group company.
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