On 10 June 2021, the Irish Revenue published an eBrief 114/21 and a manual regarding updated guidance on the surcharge on undistributed income of service companies. Section 441 Taxes Consolidation Act 1997 provides for an additional charge of corporation tax referred to as a surcharge on close companies which are service companies in respect of certain undistributed income. The rate of the surcharge is 15% on such undistributed income.
According to the manual, a surcharge may also apply in respect of a service company’s undistributed investment and estate income. Section 440 TCA 1997 provides for a surcharge on close companies at 20% rate of the excess of the aggregate of the distributable investment income and the distributable estate income over the distributions made for an accounting period.
