Provisions of the Finance Act 2010, effective from 3 April 2010, reduce the administrative burden for qualifying non-resident companies when claiming an exemption from Dividend Withholding Tax (DWT) on receipt of dividends from Irish companies.
For DWT purposes a qualifying non-resident company is:
- a company which is resident in the EU or in a tax treaty jurisdiction and not controlled by an Irish resident individual;
- a company which is ultimately controlled by a person or persons who are resident for the purposes of tax in the EU or a tax treaty jurisdiction; or
- a company where the principal class of shares are regularly traded on a stock exchange in the EU or a tax treaty jurisdiction.
Prior to these changes, a dividend could be paid without deducting DWT where a qualifying non-resident company provided a certificate of tax residency from the relevant foreign tax authority and/or an auditor’s certificate, together with a signed non-resident declaration form to the Irish company. Under the new rules, self-certification by a qualifying non-resident company is sufficient and this should speed up the payment of dividends by Irish companies without DWT to qualifying non-resident companies.
The new declaration certification published by the Irish Revenue requires:
- an undertaking from an authorised signatory such as company director or person approved by board of directors (or a person authorised under power of attorney of the company) that the named company is beneficially entitled to the distribution in respect of which the declaration is made;
- details of the tax residency of the named company; and
- an undertaking to provide any further supporting documentation relating to the residency or control of the company to the Irish Revenue upon request.
Any self-certification declaration completed under the self-certification system is valid up to 31 December in the year in which it is signed and for five full calendar years thereafter. Declarations in place prior to 3 April 2010, remain valid until their current expiry date has passed.
This article has been authored by Conor Bradbury.