Irish Interest Limitation Rule
We consider the implications of Ireland’s new Interest Limitation Rule, in particular for Irish securitisation companies (“Section 110 Companies”)
Finance Act 2021 was signed into Irish law on 21 December 2021. It implements, for the first time in Ireland, the interest limitation rule (“ILR”) under the Anti-Tax Avoidance Directive (“ATAD”), and it is now effective for accounting periods commencing on or after 1 January 2022.
We are pleased with the way in which the legislation has been drafted. Although there is no financial undertaking exemption as had been anticipated, the expected standalone exemption has been incorporated. Most Section 110 Companies should fall outside the scope of the ILR by virtue of being standalone entities or being part of a “single company worldwide group”. For those falling outside of this (e.g. Section 110 Companies which are subsidiaries), helpfully, the definition of “interest equivalent” has been widely drafted. We believe it includes all flows of funds through a Section 110 Company.
Read our detailed analysis of the new rule and its implications in full here.
To access our webinars and articles related to the revised framework for the establishment of closed-ended funds in Ireland, please see our Irish Private Funds webpage.
