Tax Appeals Commission determination 204TACD2025 regarding Dividend Witholding Tax & Income Tax, 2025

• Administrative Decision Number: 204TACD2025
• Year: 2025
• Date: 17 June 2025
• Respondent: The Revenue Commissioners

1

Between

Appellant

and

The Revenue Commissioners

Respondent

Determination

204TACD2025

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Table of Contents

Introduction ........................................................................................................................... 3

Background ........................................................................................................................... 4

Section 949AN TCA 1997.................................................................................................. 6

Documentation presented to the Commissioner ................................................................ 7

Legislation and Guidelines .................................................................................................... 8

Evidence and Submissions ................................................................................................. 11

Appellants’ evidence ........................................................................................................ 11

Appellant’s submissions .................................................................................................. 21

Respondent’s evidence ................................................................................................... 24

Respondent’s submissions .............................................................................................. 29

Material Facts ..................................................................................................................... 32

Analysis .............................................................................................................................. 34

Statutory interpretation .................................................................................................... 34

The burden of proof ......................................................................................................... 39

Substantive matter........................................................................................................... 42

Section 130(a) TCA 1997 ................................................................................................ 42

An asset .......................................................................................................................... 43

The transactions and the benefit...................................................................................... 45

The market value of the benefit ....................................................................................... 54

Duties of an expert witness .............................................................................................. 55

The valuation of shares – the statutory hypothesis .......................................................... 57

The market value of the shares ....................................................................................... 61

Conclusion .......................................................................................................................... 72

Determination ..................................................................................................................... 74

Notification .......................................................................................................................... 74

Appeal ................................................................................................................................ 74

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Introduction

1. This is an appeal to the Tax Appeals Commission (“the Commission”) pursuant to and in

accordance with the provisions of section 949I of the Taxes Consolidation Act 1997 (“TCA

1997”) brought on behalf of (“the Appellant”) and (“the

Appellant company”)(“collectively “the Appellants”) in relation to a Notice of Amended

Assessment to Income Tax dated 10 September 2019, in the amount of €65,843 and a

Notice of Assessment to Dividend Withholding Tax (“DWT”) dated 18 September 2019,

in the amount of €54,719.27 (“the assessments”). The assessments were raised in

relation to the tax year 2019 (“the relevant year”).

2. The liabilities arose in circumstances where the Respondent treated an amount of

€200,000 paid to the Appellant, by the Appellant company, in return for 20,000 class B

redeemable non-voting preference shares in (“company B”), as a

distribution to the Appellant from the Appellant company, in accordance with section

130(3)(a) TCA 1997, and the Appellant company was obliged to deduct DWT in

accordance with section 172B TCA 1997.

3. On 4 October 2019, the Appellants duly appealed the assessments to the Commission

by submitting a Notice of Appeal in respect of each assessment. On 13 January 2020, in

accordance with section 949Q TCA 1997, the Appellants submitted a Statement of Case

which built on the Appellants’ Notices of Appeal and on 14 January 2020 the Respondent

submitted its Statement of Case. Furthermore, on 8 March 2024, in accordance with

section 949S TCA 1997, the Appellants submitted an Outline of Arguments. On 14 March

2021 the Respondent submitted an Outline of Arguments and on 14 May 2024, the

Respondent submitted Supplemental Legal Submissions. In accordance with section

949E(2)(b) TCA 1997, the Commissioner consolidated the appeals in respect of the

Appellant and the Appellant company (as defined as the Appellants as referred to above)

which were heard together (“the appeal”).

4. On 4 February 2025, a two-day hearing took place in respect of the appeal. The parties

chose a physical hearing and so it proceeded on that basis. Both parties had the benefit

of legal advice and representation. The Appellants were represented by junior counsel

and the Respondent was represented by senior counsel. A stenographer was present for

the two days of the hearing and as such, a transcript was produced by the stenographer

of the two-day hearing. The Commissioner has referenced applicable extracts from this

transcript in this Determination. In addition to legal submissions, the Commissioner heard

evidence, including expert evidence, from the following witnesses:

(1) The Appellant;