Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Section 22 amends section 246 of the Taxes Consolidation Act 1997, which provides an exemption from the requirement to deduct withholding tax from payments of annual interest in a broad range of circumstances where withholding tax is considered unnecessary. The section extends this range of exemptions to allow interest to be paid from an Irish treasury company to another Irish company within the same group without the need to deduct interest withholding tax. A similar exemption is already available where the Irish company receiving the interest payment is a member of an EU group. The section provides an exemption where the related Irish company in receipt of the interest payment is a 51% subsidiary of a company located in a treaty-partner country or listed on a recognised stock exchange in such a country.

This provision makes no change in the underlying tax liability on the interest. It is a technical measure to eliminate the administrative burden associated with operating withholding tax on such payments. Therefore, there is no cost associated with this measure. These provisions will apply to interest paid on or after 1 January 2014.