Dáil Éireann Debate, Wednesday - 29 May 2013
80. Deputy Pearse Doherty asked the Minister for Finance the amount that could be raised for the Exchequer if corporation tax was applied to dividends received by one Irish resident company from another Irish resident company. [26069/13]
View answerSection 129 of the Taxes Consolidation Act 1997 provides that corporation tax is not charged on dividends received by an Irish resident company from another Irish resident company. The reason for this is that such dividends are paid out of profits of the paying company which have already been subject to corporation tax and to apply a corporation tax charge on the company receiving the dividends would, in effect, amount to double taxation. If an Irish resident company were to be made chargeable to corporation tax on dividends it received from other companies resident in the State, it would be necessary to provide a credit for corporation tax paid by the paying company on profits out of which the dividends are paid. As such a credit would offset the corporation tax payable on dividends received, there would be no net gain to the Exchequer from the removal of this exemption.
