Tax Appeals Commission determination 161TACD2023 regarding Income Tax & DWT, 2023

Administrative Decision Number161TACD2023
Year2023
Date04 October 2023
Subject MatterIncome Tax & DWT
RespondentTHE REVENUE COMMISSIONERS
1
161TACD2023
Between
Appellants
and
THE REVENUE COMMISSIONERS
Respondent
Determination
2
Contents
Introduction ........................................................................................................................... 3
Background ........................................................................................................................... 3
Documentation presented to the Commission ....................................................................... 6
Witness Evidence ............................................................................................................... 13
............................................................................................................. 13
The First-Named Appellant ............................................................ 16
The Appellants’ accountant ............................................................... 18
Commissioner Intervention and Adjournment ...................................................................... 19
Expert Witness Valuation Reports ....................................................................................... 22
Appellants’ Report ........................................................................................................... 22
Respondent’s Report ....................................................................................................... 23
The Expert Witnesses’ Evidence ......................................................................................... 26
The Appellants’ Expert Witness ........................................................... 26
The Respondent’s Expert Witness ...................................................... 28
Submissions ....................................................................................................................... 30
Appellants ....................................................................................................................... 30
Respondent ..................................................................................................................... 32
Material Facts ..................................................................................................................... 35
Determination ..................................................................................................................... 44
Appendix 1 Legislation ..................................................................................................... 46
Appendix 2 .......................................................................................................................... 55
3
Introduction
1. This matter comes before the Tax Appeals Commission (hereinafter “the Commission”)
as an appeal against a Notice of Amended Assessment to Income Tax issued to the first-
named Appellant. That assessment which was issued by the Respondent on 5th
December 2018 is in respect of the tax year 2014 and the amount of income tax sought
on the assessment is €609,445.
2. This appeal also relates to a Notice of Assessment to Dividend Withholding Tax (“DWT”)
issued to the second-named Appellant. That assessment in the sum of €353,830 was
issued by the Respondent on 13th March 2018 and is in respect of a deemed distribution
of €1,769,150 made by the second-named Appellant on 27th March 2014.
3. As both the first and second assessment relate to the same underlying transaction, it was
agreed between the Appellants and the Respondent (“the parties”) that the two appeals
would be heard at the same time by the Commissioner in accordance with the provisions
of section 949H TCA 1997.
4. The hearing of the appeal took place with the parties in physical attendance on 15th
December 2022. At the request of the parties and to facilitate settlement negotiations,
the Commissioner agreed to adjourn that hearing. Following a Case Management
Conference (“CMC”) on 1st March 2023 at which the Commissioner was informed by the
parties that settlement negotiations had been unsuccessful, the hearing resumed and
concluded on 28th March 2023.
5. The Appellants were represented by Counsel and their accountant. The Respondent was
represented by both Senior and Junior Counsel, its solicitor and three members of its
staff. In addition, the Commissioner heard sworn testimony from a number of witnesses
including expert witnesses, in additional to legal submissions from the parties’
representatives.
Background1
6. On 14th February 2014, the first-named Appellant entered into a loan agreement with
for a loan in the amount of €1,769,150. At the time of acquiring
the loan was an Irish incorporated and Irish tax resident company but it ceased to be
tax resident in Ireland on 30th December 2015.
1 For ease of reference and to aid comprehension, the Commissioner sets out at Appendix 2, a
summary of the transactions undertaken by the Appellants.

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