Revenue eBrief No. 179/19
09 October 2019
A new Tax and Duty Manual Part 35-01-11, Dual-Resident Companies, has been created which outlines the new rule under Article 4 of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ('the MLI') regarding the residence for treaty purposes of companies which are resident of more than one jurisdiction ('the tie-breaker rule').
The MLI came into force for Ireland on 1 May 2019. It operates to modify Ireland's Double Taxation Conventions ('DTCs') in accordance with the final positions adopted by Ireland and its treaty partner on ratification of the MLI.
Where both Ireland and its treaty partner have opted for the tie-breaker rule, the particular treaty will be modified to include this provision. From the effective date, the tie-breaker rule requires the competent authorities to endeavour to resolve cases of corporate dual residence by mutual agreement having regard to a number of factors. Taxpayers affected or potentially affected by the tie-breaker rule must request the initiation of the mutual agreement procedure under the Mutual Agreement Procedure (MAP) Article of the relevant DTC.
In general, the tie-breaker rule will come into effect in respect of any of Ireland's DTCs at the earliest for taxable periods beginning on or after 1 November 2019.