Funds - Overview Of Irish Tax Registration And Filing Requirements

Author:Mr David Lawless, Sean Murray, Paul Moloney, Michael Tansley and Richard Lacken
Profession:Dillon Eustace

One of the key drivers behind the growth and development of the Irish Funds Industry has been the favourable Irish taxation regime for regulated collective investment funds ("Investment Undertakings"). This favourable taxation regime essentially provides that Investment Undertakings themselves are not chargeable to Irish tax in respect of their relevant income & gains and furthermore non-resident investors are not taxed in Ireland on either (i) a disposal of their shares/units in the Investment Undertaking or (ii) distributions from the Investment Undertaking. Notwithstanding the above it is important to note that Investment Undertakings (and where relevant Fund Management Companies) will have certain tax registration and filing requirements to comply with under Irish tax law. It is important that Irish tax advices are sought from the outset so as to ensure that the various tax registration and filing requirements are satisfied as Irish tax law provides for the imposition of interest and penalties for failure to comply with such requirements. The below is an outline of three of the main Irish tax considerations for an Investment Undertaking and a Fund Management Company from a registration and filing perspective on set up1. 1. Investment Undertaking Tax Following authorisation by the Central Bank of Ireland and launch an Investment Undertaking must register for investment undertaking tax ("IUT") with the Irish Revenue Commissioners. Once registered for IUT an Investment Undertaking will be allocated a tax reference number by the Revenue Commissioners and this will allow the required bi-annual IUT Returns to be made in respect of the Investment Undertaking. While Investment Undertakings are not subject to Irish taxation on any income or gains they may realise from their investments and there are no Irish withholding taxes in respect of a distribution of payments by Investment Undertakings to non-resident investors or on any encashment, redemption, cancellation or transfer of units in respect of non-resident investors, to the extent there are Irish resident investors (other than certain categories of exempt Irish investors) tax must be deducted by the Investment Undertaking on distributions made to such Irish resident investors. The purpose of the bi-annual IUT Returns is to facilitate the collection of any such taxes (appropriate tax) that are due. Consequently, these IUT Returns would typically be "nil" where there are no Irish resident investors...

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