On 1 March 2019, Irish Revenue released Tax and Duty Manual Part 15-03-03 that has been updated to reflect the amendment made in Finance Act 2018 which extended the relief for start-up companies under section 486C of the Taxes Consolidation Act (TCA) 1997 to companies commencing a new trade in 2019, 2020 or 2021.

Section 486C of the TCA 1997 was introduced by Finance (No. 2) Act 2008 and provides for relief from corporation tax for start-up companies in their first three years of trading. The relief is granted by reducing the corporation tax payable on the profits of the new trade and gains on the disposal of any assets used for the purposes of the new trade.

Finance Act 2018 has extended the date for commencement of a qualifying trade by a startup company to 31 December 2021.

Section 486C provides for relief from corporation tax for start-up companies that:

• are incorporated on or after 14 October 2008,
• set up and commence a qualifying trade between 1 January 2009 and 31 December 2021, and
• have corporation tax liabilities which do not exceed specified levels.

A qualifying trade is a new trade set up and commenced by a company in the period 1 January 2009 to 31 December 2021 but does not include a trade:

• which was previously carried on by another person and to which the company has succeeded,
• the activities of which were previously carried on as part of another person’s trade or profession,
• a trade of dealing in or developing land or exploration and extraction of petroleum or minerals (referred to in section 21A TCA 1997 as “excepted” trades),
• a trade consisting of service company activities as defined in section 441 TCA 1997. (Service companies include close companies whose businesses consist of the carrying on of a profession or the provision of professional services, or of exercising an office or employment. Service companies also include businesses that provide services to professionals),
• the activities of which form part of an undertaking to which subparagraphs (a) to (h) of Article 1 of Commission Regulation (EC) No. 1998/2006 apply, or
• the activities of which, if carried on by an associated company of the new company, would form part of a trade carried on by that associated company.

Where a company claiming relief takes over the activities of another trade, those activities will be treated as a separate trade, which will not be a qualifying trade, having been previously carried on by another person. Relief will continue to be available for corporation tax attributable to the qualifying trade within three years of commencement. The Revenue Commissioners may, for the purposes of ensuring compliance with EU de minimis State Aid Rules, disclose information on the tax relief claimed by companies under the provisions of section 486C, to government departments and agencies paying other de minimis aid and, if requested, to the EU Commission.