Irish Revenue has published eBrief No. 014/25 20 January 2024, providing updated guidance on the surcharge for certain undistributed income of close companies, Tax and Duty Manual Part 13-02-05.
Section 440 TCA 1997 provides for an additional charge of corporation tax (referred to as a “surcharge”) on close companies.
The imposition of this surcharge is to discourage the practice of allowing passive non-trading profits of close companies to accumulate, thereby avoiding income tax at the higher rate on distributions from such profits. Section 441 deals specifically with the surcharge on the undistributed income of Service Companies. Tax and Duty Manual Part 13-02-06 provides further guidance on this surcharge.
