Irish Revenue has published eBrief No. 292/24 updated guidance on the Interest Limitation Rule on 29 November 2024. This includes revisions to sections 8 and 9 of the guidance, reflecting changes introduced by the Finance Act 2024.
In sections 8 and 9 for the Finance Act 2024 amendments to Part 35D TCA97, which deals with the interaction of the interest limitation rule with leasing transactions, provide further clarity on the operation of the long-term public infrastructure project exemption.
The manual provides an overview of the Interest Limitation Rules (ILR) introduced in Part 35D of the Taxes Consolidation Act (TCA) 1997 by the Finance Act 2021. It covers various aspects essential to understanding and applying the ILR, including the introduction of key terms, phrases, and definitions (section 3); the concept of interest equivalent and related terms like legacy debt (section 4); the definition, scope, and application of relevant profit and loss (section 5); and the calculation and role of EBITDA, including the use of an EBITDA limit (section 6).
Further topics include the calculation and application of spare capacity (section 7); the treatment of trading lessors’ income and expenses (section 8); and the recognition of long-term public infrastructure projects (section 9).
The manual also explains the operation of the ILR (section 10); the carry-forward of disallowable amounts and total spare capacity (sections 11 and 12); the availability and application of group reliefs (section 13); and the application of the ILR to interest groups (section 14). Additionally, it addresses the interaction of the ILR with foreign currencies (section 15), reporting obligations of relevant entities and interest groups (section 16), and its interaction with preliminary tax obligations (section 17).