On 30 July 2018, the Irish Revenue Commissioners issued revised and updated guidance on claims by a successor company, or a group of companies, for overpaid tax that is claimed following a merger or demerger.
Overview Of Repayments
Irish tax legislation provides for a general right to repayment of tax. This right covers income tax, corporation tax, capital gains tax, income levy, domicile levy, and the universal social charge. It also covers any interest, surcharge, or penalty relating to those taxes, levies, or charges.
Repayment To Successor / Transferor Company Or Companies
The Finance Act 2017 introduced rules under which the Revenue Commissioners may repay tax to a successor company or companies where a valid claim is made in respect of tax overpaid by a transferor company, following a merger or division undertaken in accordance with the Companies Act 2014.
The guidance confirms that where there is more than one successor company, any repayment of tax will be apportioned on a “just and reasonable basis”.
It also states that the amount of any repayment of tax to a successor company, or companies, will not exceed the total amount that would have been repayable to a transferor or company.
Generally, a claim for repayment of tax will not be approved by Revenue where it is made more than four years after the end of the tax year or accounting period to which the claim relates. However, shorter deadlines for making claims can apply where this is specifically provided for in Irish tax law.
Right Of Appeal
According to the guidance, the Revenue Commissioners is generally obligated to pay interest along with repayments of overpaid tax.
Where Revenue has mistakenly made assumptions about a taxpayer’s circumstances that resulted in an overpayment by the taxpayer, interest is payable by Revenue from the date after the end of the chargeable period for which the repayment is due, or the date on which the tax was paid, whichever is the later.
In almost all other repayment cases, Revenue is obligated to pay interest 93 days after it receives a valid claim. This includes cases where there has been an administrative delay on the part of Revenue in processing a valid claim.
Revenue says no interest is payable for days when a repayment is withheld pending the receipt of information which the taxpayer was reasonably obligated to submit with a valid claim. In such a case the claim is not a valid claim until the information is furnished.