ARTICLE
21 July 2017

The Perils Of IREF Legislation

MG
Maples Group

Contributor

The Maples Group is a leading service provider offering clients a comprehensive range of legal services on the laws of the British Virgin Islands, the Cayman Islands, Ireland, Jersey and Luxembourg, and is an independent provider of fiduciary, fund services, regulatory and compliance, and entity formation and management services.
In 2016, Ireland introduced a new withholding tax on distributions from Irish regulated funds which invest in Irish real estate (IREFs).
Ireland Tax

In 2016, Ireland introduced a new withholding tax on distributions from Irish regulated funds which invest in Irish real estate (IREFs). The tax is calculated based on a formula set out in section 739L of the Taxes Consolidation Act 1997. The legislation introducing the changes describes the formula as (A x (B/C) - D). Unfortunately, in at least one legislative textbook, the formula is reprinted as (A x ((B-D)/C). This produces a different (and larger) tax liability. Perhaps it is a valuable illustration that in law, sometimes you need to go to the source, in order to find the truth.

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