Finance Act 2021

Interest limitation

31. (1) Part 3 of the Principal Act is amended—

(a) in section 37, in subsection (3), by the substitution of “Notwithstanding anything in the Tax Acts, other than Part 35D,” for “Notwithstanding anything in the Tax Acts,”, and

(b) in section 38, in subsection (3), by the substitution of “Notwithstanding anything in the Tax Acts, other than Part 35D,” for “Notwithstanding anything in the Tax Acts,”.

(2) Part 12 of the Principal Act is amended—

(a) in section 400, by the insertion of the following subsection after subsection (7):

“(7A) The predecessor shall not be entitled to relief under section 835AAD or 835AAE and the successor shall be entitled to relief under section 835AAD(8) or (10) or, on making a claim, under section 835AAD(3) or section 835AAE(2), for any amount for which the predecessor would have been entitled to claim relief if the predecessor had continued to carry on the trade.”,

and

(b) in section 401, in subsection (2)—

(i) in paragraph (i), by the substitution of “after the change of ownership,” for “after the change of ownership, or”,

(ii) in paragraph (ii), by the substitution of “after the change of ownership, or” for “after the change of ownership.”, and

(iii) by the insertion of the following paragraph after paragraph (ii):

“(iii) under section 835AAE for total spare capacity (within the meaning of Part 35D) arising to the company in an accounting period beginning before the change of ownership for any accounting period after the change of ownership.”.

(3) The Principal Act is amended by the insertion of the following Part after Part 35C:

“PART 35D

Implementation of Council Directive (EU) 2016/1164 of 12 July 2016 as regards interest limitation

Chapter 1

Interpretation and general (Part 35D)

Interpretation (Part 35D)

835AY. (1) In this Part—

‘allowable amount’ shall be construed in accordance with subsection (2);

‘alternative body of accounting standards’ means standards that accounts of entities are to comply with which are laid down by such body or bodies having authority to lay down standards of that kind in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, the Republic of Korea, the United States of America, the Republic of India and the People’s Republic of China;

‘associated enterprise’, other than in Chapter 3, means an enterprise that is associated with another enterprise in accordance with subsections (2) and (4) of section 835AA, other than enterprises which would be considered associated enterprises pursuant only to paragraphs (e), (f) or (g) of section 835AA(2);

‘CGT rate’ means—

(a) other than in the cases referred to in paragraphs (b) and (c), the rate specified in section 28(3),

(b) in the case of a relevant disposal (within the meaning of Chapter 2 of Part 22), the rate specified in section 649A(1)(b), and

(c) in the case of a disposal of an asset to which section 747A applies, the rate specified in section 747A(4);

‘consolidating entity’ means an entity which is included in the ultimate consolidated financial statements, other than a non-consolidating entity;

de minimis amount’—

(a) in respect of an accounting period of 12 months, means €3,000,000, and

(b) in respect of an accounting period of less than 12 months, the amount referred to in paragraph (a) reduced pro rata;

‘deductible interest equivalent’ means the amount in respect of interest equivalent that is deducted in calculating the relevant profit or loss of a relevant entity;

‘deemed borrowing cost’ has the meaning assigned to it by section 835AAD(1);

‘Directive (EU) 2016/1164’ has the same meaning as it has in Part 35C;

‘disallowable amount’ means the amount by which the exceeding borrowing costs is greater than the allowable amount;

‘EBITDA’ shall be construed in accordance with section 835AAB(5);

‘EBITDA limit’ means 30 per cent;

‘enterprise’ has the same meaning as it has in Part 35C;

‘entity’ has the same meaning as it has in Part 35C;

‘exceeding borrowing costs’ has the meaning assigned to it by section 835AAB(4);

‘finance cost element of non-finance lease payments’ in respect of a company and an accounting period, means the portion of the deductible lease payment in that accounting period calculated as follows—

P x (A - B) /A

where—

P is the deductible lease payment,

A is the total expected cost of the lease, over the course of the life of the lease on the date the lease was entered into, and

B is the value of the right of use asset recognised in the accounts under international accounting standards, or would be so recognised if accounts were prepared in accordance with international accounting standards, on the date the lease was entered into,

but where the terms of the lease are amended during the life of the lease such that either of A or B are amended, then, for the accounting period in which that amendment was made and all successive accounting periods, A and B shall be calculated as if a new lease was entered into at the date of that amendment;

‘finance element of finance lease payments’ in respect of a company and an accounting period, means the portion of the deductible, or taxable, finance lease payment, as the case may be, in that accounting period calculated as follows—

P x (A/B)

where—

P is the deductible, or taxable, finance lease payment, as the case may be,

A is the expected total finance cost, or finance income, as the case may be, which will be recognised in the accounts under generally accepted accounting practice over the course of the life of the lease on the date the lease was entered into, and

B is the total expected cost of the lease, or income of the lease, as the case may be, over the course of the life of the lease on the date the lease was entered into,

but where the terms of the lease are amended during the life of the lease such that either of A or B are amended, then, for the accounting period in which that amendment was made and all successive accounting periods, A and B shall be calculated as if a new lease was entered into at the date of amendment;

‘finance income element of non-finance lease payments’ in respect of a company and an accounting period, means the portion of the taxable lease payment in that accounting period calculated as follows—

P x (A - B) /A

where—

P is the taxable lease payment,

A is the total expected income of the lease, over the course of the life of the lease on the date the lease was entered into, and

B is the value of the leased asset recognised in the accounts under generally accepted accounting practice on the date the lease was entered into less the expected depreciated value of the leased asset at the end of the lease, determined in accordance with the accounting policy in the financial statements for the year in which the lease is entered into,

but where the terms of the lease are amended during the life of the lease such that either of A or B are amended, then, for the accounting period in which that amendment was made and all successive accounting periods, A and B shall be calculated as if a new lease was entered into at the date of amendment;

‘finance lease’ means a lease which, under generally accepted accounting practice, falls to be treated as a finance lease;

‘interest equivalent’ means—

(a) interest,

(b) amounts economically equivalent to interest including—

(i) a discount, where securities are issued at a discount,

(ii) the finance element of finance lease payments,

(iii) the finance income element and finance cost element of non-finance lease payments of a company that carries on a trade of leasing that is treated for the purposes of the Tax Acts as a separate trade distinct from all other activities carried on by such company under section 403(2),

(iv) amounts under derivative instruments or hedging arrangements directly connected with the raising of finance, and

(v) such portion of the profit or loss on—

(I) a financial asset (within the meaning of section 76B), or

(II) a financial liability (within the meaning of section 76B),

the coupon or return on which principally comprises interest or one or more of the amounts referred to in this paragraph, to the extent that it would be reasonable to consider that such amount is economically equivalent to interest,

(c) any amounts referred to in paragraph (a) or (b) claimed by a claimant company under section 420(6),

(d) amounts arising directly in connection with raising finance, including—

(i) guarantee fees,

(ii) arrangement fees, and

(iii) commitment fees,

(e) foreign exchange gains and losses on interest or amounts economically equivalent to interest, and

(f) any amount arising from an arrangement, or part of an arrangement, which could reasonably be considered, when the arrangement is considered in the whole, to be economically equivalent to interest;

‘interest group’ shall be construed in accordance with section 835AAK(1);

‘interest spare capacity’ has the meaning given to it by section 835AAB(4);

‘large scale asset’ means—

(a) a development, within the meaning of the Planning and Development Act 2000 , specified in the Seventh Schedule of that Act, approved by—

(i) An Bord Pleanála under section 37G of that Act, on foot of an application made pursuant to section 37A(2)(a) or (b) of that Act, or

(ii) a local authority under section 170 of that Act,

(b) a development, referred to in section 182A of the Planning and Development Act 2000 , approved by An Bord Pleanála under section 182B of that Act,

(c) a development, referred to in section 182C of the Planning and Development Act 2000 , approved by An Bord Pleanála under section 182D of that Act,

(d) railway works, within the meaning of the Transport (Railway Infrastructure) Act 2001 , in respect of which an order has been made under section 43 of that Act,

(e) a scheme, within the meaning of the Roads Act 1993 , which has been approved under section 49 of that Act,

(f) a strategic housing development, within the meaning of Chapter 1 of Part 2 of the Planning and Development (Housing) and Residential Tenancies Act 2016 approved by—

(i) An Bord Pleanála, under section 9 of that Act, or

(ii) a local authority, under section 170 of the Planning and Development Act 2000 ,

(g) an asset (within the meaning of the State Authorities (Public Private Partnership Arrangements) Act 2002 ) constructed pursuant to a public private partnership arrangement (within the meaning of that Act),

(h) an installation generating energy from renewable sources (within the meaning of the European Union (Renewable Energy) Regulations ( S.I. No. 365 of 2020 )), which is regulated, either solely or jointly with another party, by the Commission for the Regulation of Utilities, or

(i) an asset specified by the Minister for Finance in regulations made under section 835AAA(1),

that has a minimum expected life span of 10 years;

‘limitation spare capacity’ is the amount by which the exceeding borrowing costs are less than the allowable amount;

‘long-term infrastructure project’ means a project to provide, upgrade, operate or maintain a large scale asset;

‘non-consolidating entity’ means an entity which is valued in ultimate consolidated financial statements—

(a) using fair value accounting (within the meaning of international accounting standards),

(b) on the basis that it is an asset held for sale or held for distribution (within the meaning of international accounting standards), or

(c) where the ultimate consolidated financial statements are prepared under an alternative body of accounting standards, on an equivalent basis under those standards;

‘non-finance element of finance lease payments’ in respect of a company and an accounting period, means the deductible, or taxable, finance lease payments, as the case may be, in that accounting period less the finance element of the finance lease payments;

‘P rate’ is the rate specified in section 21A(3)(a);

‘payment for relief’ means a payment made by one member of an interest group to another member of an interest group pursuant to an agreement between them as respects an allocation of a disallowable amount or total spare capacity, being a payment not exceeding the reduction in tax payable in the current accounting period or successive accounting periods as a result of the allocation in respect of the member of the interest group making the payment;

‘qualifying long-term infrastructure project’ means a long-term infrastructure project—

(a) in respect of which the operator is established in, and tax resident in, a Member State,

(b) in respect of which the large scale asset concerned is in a Member State, and

(c) the income arising from which and the deductible interest equivalent relating to which arise in a Member State;

‘relevant entity’ means a company or an interest group;

‘relevant loss’ shall be construed in accordance with section 835AZ(7);

‘relevant profit’ has the meaning assigned to it by section 835AZ(1);

‘reporting company’ shall be construed in accordance with section 835AAM(1);

‘single company worldwide group’ means a company that is not—

(a) a member of a worldwide group,

(b) a member of an interest group, or

(c) a standalone entity;

‘specified return date for the accounting period’ has the same meaning as it has in Part 41A;

‘standalone entity’ means a company resident in the State that—

(a) is not a member of a worldwide group,

(b) has no associated enterprises, and

(c) does not have a permanent establishment in a territory other than the State;

‘T rate’ is the rate specified in section 21(1)(f);

‘taxable interest equivalent’ means the amount in respect of interest equivalent that is income, profits or gains included in the calculation of the relevant profit or loss of a relevant entity, including a reversal of deductible interest equivalent;

‘total spare capacity’ is the aggregate of interest spare capacity and limitation spare capacity;

‘ultimate consolidated financial statements’ means the consolidated financial statements prepared by an ultimate parent under generally accepted accounting practice or an alternative body of accounting standards;

‘ultimate parent’ means an entity that prepares consolidated financial statements under generally accepted accounting practice, or an alternative body of accounting standards, and whose results are not fully included in any other consolidated financial statements prepared under such a practice or standard;

‘worldwide group’ means the ultimate parent and all consolidating entities in the ultimate consolidated financial statements and ‘member of a worldwide group’ shall be construed accordingly.

(2) The ‘allowable amount’ in respect of a relevant entity for an accounting period shall be calculated as follows:

allowable amount = EBITDA x EBITDA limit.

(3) A word or expression which is used in this Part and is also used in Directive (EU) 2016/1164 has, unless the context otherwise requires, the same meaning in this Part as it has in Directive (EU) 2016/1164.

Relevant profit and loss

835AZ. (1) Subject to subsections (2) and (3), ‘relevant profit’, in respect of a relevant entity and an accounting period, means—

(a) the amount of the profits on which corporation tax falls finally to be borne, and

(b) the amount of the gains or losses on a relevant disposal (within the meaning of section 648),

reduced by the amount, if any, of—

(i) the amount of the excess referred to in subsection (2) of section 243B, to the extent relief may be claimed under that subsection, but for this Part, and

(ii) the amount of the excess referred to in subsection (2) of section 396B, to the extent relief may be claimed under that subsection, but for this Part.

(2) Where an amount of charge, income, expense, gain or loss used to calculate an amount referred to in subsection (1) is subject to corporation tax or provides relief at the P rate, that amount shall be adjusted for the purpose of calculating ‘relevant profit’ under subsection (1) as follows:

Aadj = Aact x (P rate/T rate)

where—

Aadj is the adjusted amount of charge, income, expense, gain or loss, as the case may be, and

Aact is the actual amount of charge, income, expense, gain or loss, as the case may be.

(3) Where an amount of charge, income, expense, gain or loss used to calculate an amount referred to in subsection (1) is subject to corporation tax or capital gains tax or provides relief at the CGT rate, that amount shall be adjusted for the purpose of calculating ‘relevant profit’ under subsection (1) as follows:

Aadj = Aact x (CGT rate/T rate)

where—

Aadj is the adjusted amount of charge, income, expense, gain or loss, as the case may be, and

Aact is the actual amount of charge, income, expense, gain or loss, as the case may be.

(4) For the purpose of calculating relevant profit under subsection (1), no account shall be taken of—

(a) any relief for losses, or excesses, as the case may be, carried forward from a previous accounting period under section 396(1), 399(1) or 399(2),

(b) any relief for losses or excesses, as the case may be, carried back from a subsequent accounting period under section 396(2), 396A(3), 396B(3), 397(1) or 399(2), or

(c) amounts set off under section 420 (other than interest treated as a charge on income that may be set off under section 420(6), but for this Part) or 420A.

(5) Subject to subsection (6), for the purpose of calculating relevant profit under subsection (1) of a relevant entity carrying on a qualifying long-term infrastructure project, no account shall be taken of any income or expenses directly connected with a qualifying long-term infrastructure project.

(6) Where a relevant entity carries on both a qualifying long-term infrastructure project and activities other than a qualifying long-term infrastructure project, income and expenses shall be apportioned between the qualifying long-term infrastructure project and those other activities on a just and reasonable basis.

(7) The amount of relevant loss for an accounting period shall be calculated in the like manner as relevant profit would have been calculated and for these purposes the reference in subsection (1) to an amount of profits on which corporation tax falls finally to be borne shall be read as a reference to the amount of losses, after making all deductions and giving all reliefs that for the purposes of corporation tax are made or given from or against profits, including deductions and reliefs which under any provision are treated as reducing profits for those purposes.

Long-term public infrastructure projects

835AAA. (1) The Minister for Finance, in consultation with the Minister for Public Expenditure and Reform, may make regulations for the purpose of this section specifying an asset is to be treated as a large scale asset, but an asset shall not be so specified unless—

(a) specifying the asset would not give rise to a breach of Article 107 of the Treaty of Functioning of the European Union,

(b) the purpose of the asset is to enhance the general public interest,

(c) it is in the public interest to so specify the asset, and

(d) the financing arrangements for the long-term infrastructure project to which the large scale asset relates present special features which justify such specification.

(2) For the purposes of subsection (1), in determining whether it is in the public interest to specify the asset concerned, the Minister shall have regard to whether—

(a) the asset concerned would be likely to be provided, upgraded, operated, or maintained in the absence of such specification,

(b) specifying the asset concerned would distort fair competition, and

(c) specifying the asset would give rise to a loss of Exchequer income, and whether the public benefit of specifying the asset outweighs any such loss.

Chapter 2

Interest limitation

Interpretation (Chapter 2)

835AAB. (1) In this Chapter—

‘legacy debt’ means a debt the terms of which were agreed before 17 June 2016, together with any contract entered into before or after that date with the sole purpose of eliminating or reducing interest rate risk on that debt, but where the terms of that debt include provision for an amount of principal not yet drawn down at that date, such principal shall only be considered an agreed term of that debt to the extent the lender is legally obliged to make available such amounts upon the happening of milestones as set out in the terms agreed before 17 June 2016;

‘milestone’ means a pre-determined deliverable or project phase defined in the terms of a debt, connected with the drawdown of principal, but does not include a call by the borrower for drawdown of principal.

(2) The deductible interest equivalent in respect of legacy debt of a relevant entity for an accounting period is the lower of—

(a) the deductible interest equivalent that arises on the legacy debt in the accounting period, and

(b) the deductible interest equivalent that would have arisen on the legacy debt in the accounting period in accordance with the terms of the legacy debt as they stood on 17 June 2016.

(3) For the purposes of this Part, the ‘net interest equivalent’ in respect of a relevant entity for an accounting period shall be calculated as follows:

IEnet = (IEded - IELD-ded) - IEtax

where—

IEnet is the amount of net interest equivalent in respect of the relevant entity for the accounting period,

IEded is the amount of deductible interest equivalent in respect of the relevant entity for the accounting period,

IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period, and

IEtax is the amount of taxable interest equivalent in respect of the relevant entity for the accounting period.

(4) Where the net interest equivalent in respect of a relevant entity for an accounting period is greater than or equal to zero, it shall be referred to in this Part as ‘exceeding borrowing costs’ and where the net interest equivalent in respect of a relevant entity for an accounting period is less than zero, it shall be referred to in this Part as ‘interest spare capacity’.

(5) In this Part, the EBITDA in respect of a relevant entity for an accounting period shall be the greater of zero and the amount calculated as follows:

R + I + FT + [(Capallow - IEded allow) - (Capcharge - IEded charge)] + IELD-ded

where—

R is the relevant profit or relevant loss, as the case may be, of the relevant entity for the accounting period,

I is the net interest equivalent of the relevant entity for the accounting period,

FT is the amount deducted in respect of foreign tax in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period,

Capallow is the amount of allowances in respect of capital expenditure under Parts 9, 24 and 29 made to a relevant entity, and the amount in respect of the non-finance element of finance lease payments deducted in calculating that entity’s relevant profit or relevant loss, as the case may be, for the accounting period,

Capcharge is the amount of charges in respect of capital expenditure under Parts 9, 24 and 29 made on a relevant entity in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period,

IEded allow is the amount of deductible interest equivalent referable to allowances in respect of capital expenditure under Parts 9, 24 and 29 made to a relevant entity in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period,

IEded charge is the amount of deductible interest equivalent referable to charges in respect of capital expenditure under Parts 9, 24 and 29 made on a relevant entity in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period, and

IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period.

Interest limitation

835AAC. (1) This section shall apply to a relevant entity for an accounting period where—

(a) the relevant entity is not, at any time in that accounting period, a standalone entity,

(b) the relevant entity has a disallowable amount greater than zero in respect of the accounting period, and

(c) the exceeding borrowing costs of the relevant entity exceeds the de minimis amount.

(2) For the purposes of determining whether the exceeding borrowing costs of a relevant entity exceeds the de minimis amount for an accounting period—

(a) in a case in which an amount of deductible interest equivalent is deducted against profits chargeable to tax at the P rate, the amount of that deductible interest equivalent shall be adjusted as follows:

IEded-adj = IEded x (T rate/P rate)

where—

IEded-adj is the adjusted amount of deductible interest equivalent in respect of the relevant entity for the accounting period, and

IEded is the amount of deductible interest equivalent in respect of the relevant entity for the accounting period deducted against profits chargeable to tax at the P rate,

(b) in a case in which an amount of taxable interest equivalent is chargeable to tax at the P rate, the amount of that taxable interest equivalent shall be adjusted as follows:

IEtax-adj = IEtax x (T rate/P rate)

where—

IEtax-adj is the adjusted amount of taxable interest equivalent in respect of the relevant entity for the accounting period, and

IEtax is the amount of taxable interest equivalent in respect of the relevant entity for the accounting period chargeable to tax at the P rate,

(c) in a case in which an amount of deductible interest equivalent is deducted against chargeable gains chargeable to tax at the CGT rate, the amount of that deductible interest equivalent shall be adjusted as follows:

IEded-adj = IEded x (T rate/CGT rate)

where—

IEded-adj is the adjusted amount of deductible interest equivalent in respect of the relevant entity for the accounting period, and

IEded is the amount of deductible interest equivalent in respect of the relevant entity for the accounting period deducted against chargeable gains chargeable to tax at the CGT rate,

(d) in a case in which an amount of deductible interest equivalent in respect of the legacy debt of the relevant entity is deducted against profits chargeable to tax at the P rate, the amount of that deductible interest equivalent shall be adjusted as follows:

IELD-ded-adj = IELD-ded x (T rate/P rate)

where—

IELD-ded-adj is the adjusted amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period, and

IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period deducted against profits chargeable to tax at the P rate, and

(e) in a case in which an amount of deductible interest equivalent in respect of the legacy debt of the relevant entity is deducted against chargeable gains chargeable to tax at the CGT rate, the amount of that deductible interest equivalent shall be adjusted as follows:

IELD-ded-adj = IELD-ded x (T rate/CGT rate)

where—

IELD-ded-adj is the adjusted amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period, and

IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period deducted against chargeable gains chargeable to tax at the CGT rate.

(3) Subject to section 835AAL, and subsections (4) and (5), where this section applies to a relevant entity for an accounting period, the amount of tax payable (within the meaning of section 959A) by the relevant entity for the accounting period, or where there is no amount of tax payable due to an insufficiency of income, profits or gains, the amount of any loss or excess arising to the relevant entity in an accounting period, but for the application of this Part, shall be adjusted by reducing the amount of interest equivalent that, but for this Part, would have been deducted in the calculation of that tax payable or that loss or excess, as the case may be, by the disallowable amount until the disallowable amount has been exhausted.

(4) For the purposes of subsection (3), where the interest equivalent mentioned in that subsection is deducted against profits chargeable to tax at the P rate, or treated as reducing the corporation tax payable on profits chargeable to tax at the P rate, then the amount by which the interest equivalent shall be reduced in respect of a disallowable amount shall be calculated by applying the following fraction:

T rate/P rate.

(5) For the purposes of subsection (3), where the interest equivalent mentioned in that subsection is deducted against chargeable gains, or treated as reducing the corporation tax payable on profits chargeable to tax at the CGT rate, then the amount by which the interest equivalent shall be reduced in respect of a disallowable amount shall be calculated by applying the following fraction:

T rate/CGT rate.

(6) Where a reduction of interest equivalent in accordance with subsection (3) reduces an amount of interest equivalent deducted in connection with the provision of a specified intangible asset, by reference to which allowances referred to in section 291A(6)(a)(i) are made, then for the purposes of section 291A(6), the aggregate amount for an accounting period referred to in section 291A(6)(a) shall be an amount calculated by reference to the interest equivalent so reduced.

Carry forward of disallowable amount

835AAD. (1) Where section 835AAC applies to a relevant entity for an accounting period (in this section referred to as the ‘first-mentioned accounting period’), the relevant entity may carry forward the disallowable amount to succeeding accounting periods in accordance with this section and any such amount carried forward shall be referred to in this section as a ‘deemed borrowing cost’.

(2) This subsection applies where an amount of deemed borrowing cost arises from a disallowable amount which would have, but for this Part, reduced the amount of tax payable by the relevant entity in the first-mentioned accounting period or the accounting period immediately prior to the first-mentioned accounting period.

(3) Subject to subsections (5), (6), (15) and (16), where subsection (2) applies, a relevant entity may make a claim to deduct the amount of deemed borrowing cost referred to in subsection (2), or a portion thereof—

(a) from its total profits or chargeable gains arising in an accounting period subsequent to the first-mentioned accounting period, or

(b) where there is an insufficiency of such profits, to create a loss or excess in an accounting period subsequent to the first-mentioned accounting period and relief for that loss or excess shall be given in accordance with section 31, 396(1) or 399, as the case may be, and sections 397, 400 and 401 shall apply to that loss.

(4) Where a claim is made for a deduction under subsection (3), any such deduction shall be applied after all other claims for relief have been made.

(5) Where a deemed borrowing cost is deducted from profits chargeable to tax at the P rate, for the purpose of calculating the amount of the deemed borrowing cost applied in reducing the amount of profits chargeable to tax at that rate, the amount of deemed borrowing cost shall be multiplied by the following fraction:

P rate/T rate.

(6) Where a deemed borrowing cost is deducted from chargeable gains, for the purpose of calculating the amount of the deemed borrowing cost applied in reducing the amount of chargeable gains chargeable to tax at the CGT rate, the amount of deemed borrowing cost shall be multiplied by the following fraction:

CGT rate/T rate.

(7) This subsection applies where an amount of deemed borrowing cost arises from a disallowable amount which would have, but for this Part, resulted in the relevant entity—

(a) incurring a loss or excess,

(b) incurring a greater loss or excess than would have been incurred, or

(c) offsetting a lower amount of loss or excess against its income under section 396(1), 399(1) or 399(2) than would have been offset,

in the first-mentioned accounting period.

(8) Subject to subsections (9), (10), (15) and (16), where subsection (7) applies, a relevant entity’s deemed borrowing cost shall be treated as a loss or excess incurred in the first-mentioned accounting period (to the extent such a loss or excess would have arisen but for this Part) and relief for that loss or excess shall be given in accordance with section 31, 396(1) or 399, as the case may be, and sections 397, 400 and 401 shall apply to the amount of deemed borrowing cost referred to in subsection (7) in the same manner as they apply to a loss.

(9) Where a deemed borrowing cost that is treated as a loss or excess incurred in the first-mentioned accounting period is deducted from profits chargeable to tax at the P rate, for the purpose of calculating the amount of deemed borrowing cost treated as a loss or excess applied in reducing the amount of profits chargeable to tax at that rate, the amount of deemed borrowing cost treated as a loss or excess shall be multiplied by the following fraction:

P rate/T rate.

(10) Where a deemed borrowing cost that is treated as a loss incurred in the first-mentioned accounting period is deducted from chargeable gains, for the purpose of calculating the amount of deemed borrowing cost treated as a loss applied in reducing the amount of profits chargeable to tax at the CGT rate, the amount of deemed borrowing cost treated as a loss shall be multiplied by the following fraction:

CGT rate/T rate.

(11) This subsection applies where an amount of deemed borrowing cost arises from a disallowable amount which would have, but for this Part, resulted in a relevant entity incurring—

(a) an excess of expenses of management referred to in section 83(3), or

(b) a greater excess of expenses of management than would have been incurred,

in the first-mentioned accounting period.

(12) Subject to subsections (13), (14), (15) and (16), where subsection (11) applies, the amount of deemed borrowing cost of the relevant entity shall be treated for the purposes of subsection (3) of section 83, and any further application of that subsection, as if it has been disbursed as expenses of management for the first-mentioned accounting period.

(13) Where a deemed borrowing cost that is treated as if it has been disbursed as expenses of management incurred in the first-mentioned accounting period is deducted from profits chargeable to tax at the P rate, for the purpose of calculating the amount of deemed borrowing cost treated as expenses of management applied in reducing the amount of profits chargeable to tax at that rate, the amount of deemed borrowing cost treated as an expense of management shall be multiplied by the following fraction:

P rate/T rate.

(14) Where a deemed borrowing cost that is treated as if it has been disbursed as expenses of management incurred in the first-mentioned accounting period is deducted from chargeable gains, for the purpose of calculating the amount of deemed borrowing cost treated as expenses of management applied in reducing the amount of chargeable gains chargeable to tax at the CGT rate, the amount of deemed borrowing cost treated as an expense of management shall be multiplied by the following fraction:

CGT rate/T rate.

(15) The aggregate of the deemed borrowing cost utilised in an accounting period under subsections (3), (8) and (12) shall be limited to the amount of the total spare capacity in the accounting period.

(16) Where the relief available under subsections (3), (8) and (12) would, but for subsection (15), exceed the total spare capacity of a relevant entity in an accounting period, relief under subsection (8) shall be given in priority to relief under subsection (3) or (12).

(17) For the purposes of determining, in respect of a disallowable amount carried forward in accordance with subsection (1), the amount of relief available in accordance with subsections (3), (8) and (12) in an accounting period (in this subsection referred to as the ‘relevant accounting period’) subsequent to the first-mentioned accounting period, the amount of relief given in respect of the deemed borrowing cost concerned under those subsections in the accounting periods, if any, prior to the relevant accounting period shall be deducted from the amount of the deemed borrowing cost.

(18) A deemed borrowing cost shall not be taken into account in calculating a relevant entity’s deductible interest equivalent in an accounting period subsequent to the first-mentioned accounting period.

(19) Notwithstanding anything in this section, no amount shall be deductible in respect of a deemed borrowing cost that arises from a disallowable amount which reduced an amount of interest equivalent deducted in connection with the provision of a specified intangible asset, by reference to which allowances referred to in section 291A(6)(a)(i) are made, and for the purposes of section 291A(6)(b)(ii) such amount shall, for the accounting period in which the disallowable amount arises, be treated as an amount of interest for which relief cannot be given by virtue of section 291A(6)(a).

Carry forward of total spare capacity

835AAE. (1) A relevant entity may carry forward its total spare capacity for a period not exceeding 60 months from the end of the accounting period in which the total spare capacity arose (in this section referred to as the ‘relevant period’).

(2) Where a disallowable amount arises in respect of a relevant entity for an accounting period during a relevant period, the relevant entity may, on making a claim, reduce the disallowable amount by an amount of the total spare capacity carried forward from a previous accounting period in accordance with subsection (1).

(3) Where a claim is made under subsection (2)—

(a) the disallowable amount for the accounting period concerned shall, subject to subsection (4), be reduced by the amount of total spare capacity carried forward from the previous accounting period, and

(b) the amount of total spare capacity not applied to reduce the disallowable amount in the accounting period shall be carried forward to the next accounting period.

(4) Where the total spare capacity carried forward from previous accounting periods is greater than the disallowable amount for an accounting period, the relevant entity shall, in reducing the disallowable amount, apply total spare capacity which has arisen in an earlier accounting period in priority to total spare capacity which has arisen in a later accounting period.

(5) Where a disallowable amount arises in respect of a relevant entity for an accounting period which begins before the end of a relevant period in respect of an amount of total spare capacity being applied to reduce the disallowable amount, the amount of total spare capacity shall be reduced by multiplying it by the following fraction:

A/B

where—

A is the length of the period common to the relevant period and accounting period, and

B is the length of the accounting period.

(6) For the purposes of determining the amount of relief available for total spare capacity, after the making of a claim or claims for relief under this section, or under subsection (3), (8) or (10) of section 835AAD, the amount of total spare capacity available for any subsequent claims shall be reduced by the amount claimed under the first-mentioned claims.

Reporting

835AAF. (1) Subject to subsection (2), a company shall make a return, by the specified return date for the accounting period, in the form specified by the Revenue Commissioners for that purpose.

(2) The return referred to in subsection (1) may include the following details in respect of the company and an accounting period:

(a) EBITDA;

(b) the allowable amount;

(c) exceeding borrowing costs;

(d) the disallowable amount;

(e) interest spare capacity;

(f) limitation spare capacity;

(g) in respect of amounts carried forward from prior accounting periods—

(i) deemed borrowing cost carried forward,

(ii) deemed borrowing cost utilised in the accounting period,

(iii) total spare capacity carried forward, and

(iv) total spare capacity utilised in the accounting period;

(h) where the group ratio election is made in accordance with section 835AAH—

(i) group exceeding borrowing costs, and

(ii) group EBITDA;

(i) where the group equity election is made in accordance with section 835AAI—

(i) the amount inserted in respect of E, for the company and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1), and

(ii) the amount inserted in respect of A, for the company and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1);

(j) whether the company is a single company worldwide group.

(3) Where a company is a member of an interest group and section 835AAM applies, paragraphs (a), (b), (c), (h), (i) and (j) of subsection (2) shall not apply.

Chapter 3

Group and equity ratio

Interpretation (Chapter 3)

835AAG. (1) In this Chapter—

‘associated enterprise’ has the same meaning as it has in Part 35C, other than in Chapters 2, 3 and 8 of that Part and in the application of that Part to hybrid entities;

‘group EBITDA’ means the amount included in respect of profit or loss, before taking into account any amount of income tax, finance income, finance costs, depreciation, amortisation or impairments, excluding any amounts in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the group of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends;

‘group exceeding borrowing costs’ means the amount included in respect of net finance expense, excluding any amount of finance income or finance expense in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the group of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends;

‘group ratio’ means the following fraction expressed as a percentage:

(group exceeding borrowing costs)/(group EBITDA).

(2) Where a relevant entity is a single company worldwide group, group exceeding borrowing costs and group EBITDA shall be calculated on the basis of the financial statements of the relevant entity prepared under generally accepted accounting practice, adjusted such that transactions with associated enterprises are disregarded.

(3) Where arrangements are entered into by any person and it is reasonable to consider that the main purpose or one of the main purposes of the arrangements, or any part of them, is the avoidance of the effect of the adjustment referred to in subsection (2), then that subsection shall apply as if the arrangements, or the part of them, as the case may be, had not been entered into.

Group ratio

835AAH. (1) Subject to section 835AAJ(2) and (3), where the group ratio exceeds 30 per cent for an accounting period of a relevant entity, the relevant entity may make an election under this subsection.

(2) Where a relevant entity makes an election under subsection (1), the definition of ‘allowable amount’ in section 835AY(2) shall, for the purposes of the application of this Part to the relevant entity for the accounting period concerned, be subject to the modification that the reference in that definition to the EBITDA limit shall be construed as a reference to the group ratio of the relevant entity for that accounting period.

Equity ratio

835AAI. (1) In this section, ‘ratio of equity over total assets’ means the following fraction expressed as a percentage:

E/A

where—

E is the equity, including share capital, share premium and reserves of a relevant entity, worldwide group or single company worldwide group, and

A is the total assets, of a relevant entity, worldwide group or single company worldwide group,

in each case, as disclosed in the financial statements of the relevant entity, worldwide group or single company worldwide group, as the case may be, which are prepared under generally accepted accounting practice or an alternative body of accounting standards.

(2) For the purpose of calculating the ratio of equity over total assets for a single company worldwide group, the amount to be included as E in the formula in subsection (1) shall be increased by an amount equal to the amount owed by the relevant entity to its associated enterprises which gives rise to deductible interest equivalent.

(3) This section applies to a relevant entity in respect of an accounting period where—

(a) the relevant entity’s ratio of equity over total assets is greater than, equal to or not more than two percentage points less than the worldwide group’s ratio of equity over total assets, calculated on the basis of the ultimate consolidated financial statements relating to the period in which the relevant entity’s accounting period ends, or

(b) the relevant entity is a member of a single company worldwide group, the relevant entity’s ratio of equity over total assets is greater than, equal to or not more than two percentage points less than the single company worldwide group’s ratio of equity over total assets calculated on the basis of the financial statements relating to the period in which the relevant entity’s accounting period ends.

(4) Where, in the period of 6 months prior to the end of an accounting period of a relevant entity, a scheme or arrangement is entered into which results in an increase in the amount represented by E in the formula in subsection (1) for the relevant entity, the effect of that scheme or arrangement shall not be taken into account in calculating the relevant entity’s ratio of equity over total assets for that accounting period, unless—

(a) it is shown that the scheme or arrangement was entered into for bona fide commercial reasons, and

(b) it is not reasonable to consider that the scheme or arrangement is, or forms part of, any scheme or arrangement of which the main purpose, or one of the main purposes, is the satisfaction of paragraph (a) or (b) of subsection (3).

(5) Where arrangements are entered into by any person and it is reasonable to consider that the main purpose, or one of the main purposes, of the arrangements, or any part of them, is the avoidance of an increase, in accordance with subsection (2), in the amount included as E in the formula in subsection (1), subsection (2) shall apply as if the arrangements, or that part of them, had not been entered into.

(6) Subject to section 835AAJ(2) and (3), where this section applies in respect of an accounting period of a relevant entity, the relevant entity may make an election under this subsection.

(7) Where a relevant entity makes an election under subsection (6) in respect of an accounting period, section 835AAC shall not apply to the relevant entity in respect of the accounting period.

Election

835AAJ. (1) An election under section 835AAH or 835AAI shall be made—

(a) in such form as the Revenue Commissioners shall specify, and

(b) on or before the specified return date for the accounting period to which the election relates.

(2) An election shall not be made by a relevant entity under section 835AAH and 835AAI in respect of an accounting period.

(3) An election shall not be made by a relevant entity under section 835AAH or 835AAI in respect of an accounting period where the relevant entity is an interest group and its members include a company referred to in section 835AAK(1)(a)(ii).

Chapter 4

Application of this Part to interest groups

Interpretation (Chapter 4)

835AAK. (1) For the purposes of this Part, an ‘interest group’ shall comprise the companies within the charge to corporation tax in the State that—

(a) are—

(i) members of the same worldwide group, or

(ii) where not members of the same worldwide group, deemed to be members of the same group of companies under section 411,

and

(b) have elected to be members of the interest group.

(2) Where a company, branch or agency, or any activities of a company, branch or agency, falls to be included in two interest groups, then the company, branch or agency shall elect to be treated as a member of one such group only for the purposes of this Part.

(3) The election referred to in subsection (1) shall—

(a) apply for a period of at least three years from the beginning of the accounting period in respect of which the election is made or, if later, the date on which one of the conditions set out in subsection (1)(a) is satisfied,

(b) be made in such form as the Revenue Commissioners shall specify, and

(c) be made on or before the specified return date for the accounting period to which the election first relates.

(4) Subsequent to the period referred to in subsection (3)(a), an election referred to in subsection (1) may be withdrawn and such withdrawal shall—

(a) apply for a period of at least three years from the beginning of the accounting period in respect of which the withdrawal is made,

(b) be made in such form as the Revenue Commissioners shall specify, and

(c) be made on or before the specified return date for the accounting period to which the withdrawal first relates.

Application of Part to interest group

835AAL. (1) This section applies where a company is a member of an interest group.

(2) Where a relevant entity is an interest group, section 835AAC shall apply, subject to the modification that a reference to a disallowable amount of a relevant entity shall be construed as a reference to the disallowable amount of the member of the interest group calculated or allocated, as the case may be, in accordance with subsection (6), (7) or (8), as the case may be.

(3) Where an amount is required to be calculated in respect of an interest group for the purposes of this Part, it shall comprise the results of all the members of the interest group.

(4) The accounting period of an interest group shall be the accounting period which is common to more than half of the members of the interest group or, where there is no such accounting period, the accounting period of the reporting company.

(5) Where the accounting period of a member of an interest group does not coincide with the accounting period of the interest group—

(a) the results of such a member shall be apportioned such that the income and expenses are those which, on a just and reasonable basis, arose during the accounting period of the interest group, and

(b) all balance sheet amounts shall be those which would be reflected in the balance sheet of the member of the interest group on the final day of the accounting period of the interest group.

(6) Subject to subsections (7) and (8), the disallowable amount of a member of an interest group shall be calculated as follows:

DAmember = DAgroup x (DIEmember/DIEgroup)

where—

DAmember is the disallowable amount of the member of the interest group,

DAgroup is the disallowable amount of the interest group,

DIEmember is the deductible interest equivalent of the member of the interest group, and

DIEgroup is the deductible interest equivalent of the interest group.

(7) Where a reporting company and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the disallowable amount, or a portion of the disallowable amount, of the interest group should be deemed to be the disallowable amount of a member of the interest group, the disallowable amount of that member shall be the amount so notified.

(8) A disallowable amount allocated under subsection (7) to a member of an interest group in an accounting period shall not exceed the deductible interest equivalent of that group member for that accounting period.

(9) Subject to subsection (10), the total spare capacity of a member of an interest group arising in an accounting period shall be calculated as follows:

TSCmember = TSCgroup x (TIEmember/TIEgroup)

where—

TSCmember is the total spare capacity of the member of the interest group,

TSCgroup is the total spare capacity of the interest group,

TIEmember is the taxable interest equivalent of the member of the interest group, and

TIEgroup is the taxable interest equivalent of the interest group.

(10) Where a reporting company and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the total spare capacity, or a portion of the total spare capacity, of the interest group should be deemed to be the total spare capacity of a member of the interest group, the total spare capacity of that member shall be the amount so notified.

(11) For the purposes of the application of section 835AAD or 835AAE to an interest group, a reference in the section concerned to a relevant entity shall be construed as a reference to a member of an interest group.

(12) Where—

(a) an amount of total spare capacity is carried forward from a preceding accounting period by a member of an interest group, and

(b) the reporting company of the interest group and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the total spare capacity so carried forward, or a portion of that total spare capacity, should be reallocated to a member of the interest group,

the total spare capacity so notified shall be allocated to the member of the interest group.

(13) Subject to subsection (14), where the relevant entity is an interest group, section 835AAI shall apply subject to the modification that the relevant entity’s ratio of equity over total assets shall be calculated on the basis of a consolidation of the results of the members of the interest group as if each member of the interest group had a common ultimate parent resident in the State prepared under the same body of accounting standards and same accounting policies as applies to the ultimate consolidated financial statements of the worldwide group concerned, but where a member of an interest group is a branch or agency of a company not resident in the State, then the results of that member of the interest group shall be the results of the branch or agency.

(14) Where members of an interest group hold investments in companies which are not members of an interest group, and such investments would, but for this subsection, be fully consolidated in the results of the members of an interest group prepared pursuant to subsection (13), those investments shall, for the purposes of subsection (13) be accounted for at cost, measured at the lower of their carrying amount and fair value less costs to sell, as if the relevant entity was a company required to prepare non-consolidated financial statements.

(15) A payment for relief shall not—

(a) be taken into account in computing profits or losses of either the payor or the recipient of the payment for relief for corporation tax purposes, and

(b) be regarded as a distribution or a charge on income for any of the purposes of the Corporation Tax Acts.

Interest group reporting

835AAM. (1) An interest group shall appoint a member of the group that is a chargeable person, within the meaning of Part 41A, for the purposes of this Chapter (in this Part referred to as a ‘reporting company’).

(2) Where an election has been made in accordance with section 835AAK to form an interest group, the reporting company shall make a return on behalf of the interest group on or before the specified return date for the accounting period, in the form specified by the Revenue Commissioners.

(3) The return referred to in subsection (2) may include the following details in respect of the interest group and an accounting period of the interest group:

(a) the name and tax reference number of each member of the interest group;

(b) EBITDA;

(c) the allowable amount;

(d) exceeding borrowing costs;

(e) the disallowable amount and its allocation as amongst the members of the interest group;

(f) total spare capacity and its allocation as amongst the members of the interest group;

(g) in respect of amounts carried forward from prior accounting periods—

(i) deemed borrowing cost carried forward and its allocation as amongst the members of the interest group,

(ii) deemed borrowing cost utilised in the accounting period and its allocation as amongst the members of the interest group,

(iii) total spare capacity carried forward and its allocation as amongst the members of the interest group, and

(iv) total spare capacity utilised in the accounting period and its allocation as amongst the members of the interest group;

(h) where an election is made in accordance with section 835AAH(1)—

(i) group exceeding borrowing costs, and

(ii) group EBITDA;

(i) where an election is made in accordance with section 835AAI(6)—

(i) amount inserted in respect of E, for the interest group and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1), and

(ii) amount inserted in respect of A, for the interest group and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1);

(j) where a payment for relief is made in accordance with section 835AAL(15)—

(i) the name and tax reference number of the payee and payor, and

(ii) the amount of the payment.

Chapter 5

Application of this Part

Scope of application

835AAN. This Part shall apply to an accounting period of a relevant entity commencing on or after 1 January 2022.

Order of application

835AAO. This Part shall apply after all provisions of the Tax Acts and the Capital Gains Tax Acts, other than section 811C.”.

(4) The Principal Act is amended in Part 35C, in section 835AX, in subsection (1), by the substitution of “other than section 811C and Part 35D” for “other than section 811C”.

(5) The Principal Act is amended in Part 41A—

(a) in section 959AR, by the substitution of the following subsection for subsection (4)—

“(4) Where as respects an accounting period, other than a relevant accounting period, of a company—

(a) for accounting periods other than those referred to in paragraph (b)—

(i) the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is less than 90 per cent of the tax payable by the chargeable person for the accounting period,

(ii) the preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period—

(I) in respect of chargeable gains on the disposal of assets in the part of the accounting period which is after the date by which preliminary tax for the accounting period is payable in accordance with subsection (1), or

(II) in the case of a relevant company, in respect of profits or gains or losses accruing, and not realised, in the accounting period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the accounting period which is after the end of the month immediately preceding the month in which preliminary tax for the accounting period is payable in accordance with subsection (1),

and

(iii) the chargeable person makes a further payment of preliminary tax for the accounting period within one month after the end of the accounting period and the aggregate of that payment and the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period,

or

(b) for accounting periods commencing on or after 1 January 2022 and ending on or before 31 December 2027—

(i) the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is less than 90 per cent of the tax payable by the chargeable person for the accounting period,

(ii) the preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period, in respect of a disallowable amount (within the meaning of Part 35D),

(iii) the chargeable person makes a further payment of preliminary tax for the accounting period within a period of 6 months after the end of the accounting period, but where the last day of that period of 6 months is later than day 21 of the month in which it occurs, the further payment of preliminary tax for the accounting period is paid no later than—

(I) day 21 of the month in which that last day occurs, or

(II) where payment is made by such electronic means as are required by the Revenue Commissioners, day 23 of the month in which that last day occurs,

and

(iv) the aggregate of that payment and the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period,

the further payment of preliminary tax paid by the chargeable person for the accounting period shall be treated for the purposes of subsection (3) as having been paid by the date by which it is due and payable.”,

and

(b) in section 959AS, by the substitution of the following subsection for subsection (7):

“(7) Where, as respects a relevant accounting period, either—

(a) for accounting periods other than those referred to in paragraph (b)—

(i) the aggregate of the initial instalment and the final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is less than 90 per cent of the tax payable by the chargeable person for the accounting period,

(ii) the aggregate of the initial instalment and the final instalment of preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period—

(I) in respect of chargeable gains on the disposal of assets in the part of the accounting period which is after the date by which the final instalment of preliminary tax for the accounting period is payable in accordance with subsection (2), or

(II) in the case of a relevant company, in respect of profits or gains or losses accruing, and not realised, in the accounting period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the accounting period which is after the end of the month immediately preceding the month in which the final instalment of preliminary tax for the accounting period is payable in accordance with subsection (2),

and

(iii) the chargeable person makes a further payment of preliminary tax for the accounting period within one month after the end of the accounting period and the aggregate of that payment and the initial instalment and final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period,

or

(b) for accounting periods commencing on or after 1 January 2022 and ending on or before 31 December 2027—

(i) the aggregate of the initial instalment and the final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is less than 90 per cent of the tax payable by the chargeable person for the accounting period,

(ii) the aggregate of the initial instalment and the final instalment of preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period, in respect of a disallowable amount (within the meaning of Part 35D),

(iii) the chargeable person makes a further payment of preliminary tax for the accounting period within a period of 6 months after the end of the accounting period, but where the last day of that period of 6 months is later than day 21 of the month in which it occurs, the further payment of preliminary tax for the accounting period is paid no later than—

(I) day 21 of the month in which that last day occurs, or

(II) where payment is made by such electronic means as are required by the Revenue Commissioners, day 23 of the month in which that last day occurs,

and

(iv) the aggregate of the payment referred to in subparagraph (iii) and the initial instalment and final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period,

the final instalment of preliminary tax paid by the chargeable person for the accounting period shall be treated for the purposes of subsection (4) as having been paid by the date on which it is due and payable.”.