Tax Appeals Commission determination 75TACD2021 regarding CGT, 2021

Administrative Decision Number75TACD2021
Year2021
Date18 February 2021
Subject MatterCGT
Respondent THE REVENUE COMMISSIONERS
75TACD2021
Between/
Appellant
-and-
THE REVENUE COMMISSIONERS
Respondent
DETERMINATION
A. Introduction
1. This appeal is against an assessment to capital gains tax (hereinafter referred to
as‘CGT’”) for the year 2016 issued by the Respondent on the 11th of October 2016
in the sum of €868,388 in respect of alleged chargeable gains of €2,631,479. The
core issue in the appeal is whether
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(hereinafter referred to as the “Appellant”) as a non-resident company was
within the charge to CGT in respect of the chargeable gains assessed. The gains
assessed were alleged to arise in relation to the disposal by the Appellant on the
of February 2016 of shares in Ltd
(hereinafter referred to as “COMPANY A”).
B. Facts relevant to the Appeal
2. A Statement of Facts was prepared by the Appellant and submitted to the Tax
Appeals Commission (hereinafter referred to as the “Commission”). It was not
formally agreed by the Respondent but there is little dispute between the parties
in relation to the facts central to the determination of the appeal.
3. The Statement of Facts prepared by the Appellant records that the Appellant is a
incorporated and tax resident company which, until the of F
2016, held beneficially 66% of the shares in COMPANY A, an Irish incorporated
and tax resident company. The principal activity of COMPANY A is that of
designing, building, maintaining, operating and financing the
Motorway (hereinafter referred to as the "Motorway") and operating the
toll on behalf of Transport Infrastructure Ireland (hereinafter referred to as
"TII"). The TII is the body formerly known as the National Roads Authority
(hereinafter referred to as the “NRA”)
4. On the , COMPANY A entered into a contract by way of public-
private partnership agreement with TII in respect of the Road project
(hereinafter referred to as the "PPP Contract"). The PPP Contract obliged
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COMPANY A to design, construct, finance, operate and maintain the Motorway.
The Appellant submits that the PPP Contract did not confer upon COMPANY A any
proprietary interest in the Motorway or in the land on which the Motorway is
built, and the Respondent accepts that this is correct as a matter of property law.
At all times ownership of the land and the Motorway remained with TII. Pursuant
to the terms of the PPP Contract, COMPANY A was granted a licence to perform
its functions under the PPP Contract.
5. COMPANY A is a service company which was appointed to perform obligations
under the PPP Contract in return for which it received certain milestone payments
in respect of the construction and operation of the Motorway, and also had the
right to collect the tolls on behalf of TII and retain a portion collected under the
Toll Scheme. The term of the concession granted under the PPP Contract was
years.
6. COMPANY A operated and continues to operate under the supervision of TII and
has significant reporting requirements to TII. The PPP Contract set out strict
deadlines for delivery of the project and also in respect of the standards of work
delivered in respect of the Motorway. TII had and continues to have considerable
supervisory duties and powers, and ultimately has rights to step in should
COMPANY A fail to perform its obligations under the PPP Contract.
7. Pursuant to the powers under the Roads Act 1993, a draft Toll Scheme in respect
of the Motorway was adopted and was appended at Schedule of the PPP
Contract. The final scheme was adopted by TII on the
(hereinafter referred to as the "Toll Scheme"). The Toll Scheme specifically
provided that TII, in accordance with section 63 of the Roads Act, could enter into
an agreement with a third party concessionaire in respect of the collection of tolls

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