Paschal Donohoe (Dublin Central, Fine Gael)

I move amendment No. 81:

In page 125, between lines 11 and 12, to insert the following: “(m) in section 111AAD(2), by the substitution of the following paragraph for paragraph (e):

“(e) there were inserted in section 111O the following subsections after subsection (3):

‘(3A) (a) Notwithstanding subsections (2) and (3) and subject to subsection (3B), the financial accounting net income or loss of a qualifying entity for the fiscal year shall be determined in accordance with a local accounting standard where—

(i) the qualifying entity is an entity within the meaning of section 111AAB(1)(c), or

(ii) subject to paragraph (b), all of the qualifying entities of the MNE group, large-scale domestic group or joint venture group, as the case may be, located in the State have financial accounts prepared in accordance with a local accounting standard and the accounting period of all such accounts is the same as the fiscal year of the consolidated financial statements of the MNE group, large-scale domestic group or joint venture group as the case may be, and—

(I) all such constituent entities are required to prepare or use such accounts for the purposes of determining their liability to tax in the State or to comply with any other law of the State, or

(II) such financial accounts are subject to an external financial audit.

(b) For the purposes of paragraph (a)(ii), where a qualifying entity of an MNE group, large-scale domestic group or joint venture group, as the case may be, located in the State has financial accounts prepared in accordance with a local accounting standard, but the accounting period of such financial accounts is not the same as the fiscal year of the consolidated financial statements of the MNE group, large-scale domestic group or joint venture group, as the case may be, as a result of—

(i) the qualifying entity being formed or created, or in the case of a permanent establishment being established, during the fiscal year,

(ii) the qualifying entity being liquidated, dissolved or otherwise ceasing to exist during the fiscal year,

(iii) a merger or division, within the meaning, respectively, of section 638A(1), in relation to the qualifying entity during the fiscal year,

(iv) a cross-border merger or cross-border division, both within the meaning, respectively, of the European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023 (S.I. No. 233 of 2023), or a merger resulting in the formation of a Societas Europaea in accordance with the SE Regulation, in relation to the qualifying entity during the fiscal year, or

(v) the qualifying entity being acquired by the MNE group, large-scale domestic group or joint venture group, as the case may be, during the fiscal year,

then, for the purposes of paragraph (a)(ii), the accounting period of the financial accounts of the qualifying entity shall be deemed to be the same as the fiscal year of the consolidated financial statements of the MNE group, large-scale domestic group or joint venture group, as the case may be, for that fiscal year and, where subparagraph (v) applies, for the fiscal year following the fiscal year in which the qualifying entity is acquired (referred to in this paragraph as ‘the subsequent fiscal year’), the accounting period of the financial accounts of the qualifying entity shall also be deemed to be the same as the fiscal year of the consolidated financial statements of the MNE group, large-scale domestic group or joint venture group, as the case may be, for the subsequent fiscal year.

(c) In this subsection, ‘SE Regulation’ means Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company (SE), as amended by Council Regulation (EC) No. 885/2004 of 26 April 2004, Council Regulation (EC) No. 1791/2006 of 20 November 2006 and Council Regulation (EC) No. 517/2013 of 13 May 2013.

(3B) (a) Subject to paragraph (b), where any of the qualifying entities of an MNE group, large-scale domestic group or joint venture group, as the case may be, located in the State prepare financial accounts under more than one local accounting standard then, for the purposes of subsection (3A), the financial accounting net income or loss of a constituent entity for the fiscal year shall be determined in accordance with—

(i) the local accounting standard used for the purposes of determining the profits, losses or gains of the qualifying entity for the purposes of Case I or II of Schedule D, or

(ii) where no such profits, losses or gains exist, the local accounting standard used for the preparation of the financial accounts that are annexed to the annual return to be filed with the Registrar in accordance with the Companies Act 2014, for the accounting period which corresponds to the fiscal year.

(b) Where a qualifying entity does not prepare financial accounts—

(i) for the purposes of determining the profits, losses or gains of the qualifying entity for the purposes of Case I or II of Schedule D, or

(ii) that are annexed to the annual return to be filed with the Registrar in accordance with the Companies Act 2014, for the accounting period which corresponds to the fiscal year,

the financial accounting net income or loss of a constituent entity for the fiscal year shall be determined in accordance with subsections (2) and (3).’,”,”.