On 18 May 2023, the Irish Revenue issued eBrief No. 117/23 to provide guidance on classifying foreign entities for Irish tax purposes. Accordingly, Revenue provides Tax and Duty Manual (TDM) Part 35C-00-02 – Foreign Entity Classification For Irish Tax Purposes.
Where a foreign entity is involved in a transaction the classification of that foreign entity can be central in determining any Irish tax implications. The purpose of the guidance is to provide clarity on the approach taken by Revenue when classifying a foreign entity for the purposes of Irish tax law.
The classification determines tax implications, with two main categories: opaque entities (taxed directly) and transparent entities (taxed through members). Foreign entities with complex structures are examined individually to determine their classification based on established principles. Uncertainty can be resolved through the RTS framework. Details can be found in Tax and Duty Manual (TDM) Part 37.00.00a for Business, Personal, and Medium Enterprise Divisions, and TDM Part 37.00.40 for Large Corporates and High Wealth Individuals.
