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11.2. Tax Consequence of Business Emigration, Corporate Inversions and the Cessation of Business

Emigration of Business

A company formed under Irish law cannot be re-registered under law in another jurisdiction. Likewise, companies formed under the law of other jurisdictions cannot be re-registered in Ireland.

Cessation of Business

In Ireland, there are three ways to officially cease business, through liquidation, through receivership, or through examinership. The following outlines the main tax issues that may arise in cessation of business:

  • Inability to transfer losses to group members in the case of liquidation
  • CGT on gains arising from the sale of assets to third parties or distribution in kind to shareholders - CGT relief for group transfers continues to apply
  • Stamp duty on the transfer of assets to third parties or distribution in kind to shareholders
  • Recapture of CGT and stamp duty relief previously claimed, including recapture of group relief previously claimed if the 90% association is broken within two years of a transfer
  • VAT in relation to disposal of assets

In some cases it may be possible to apply for concessionary treatment in advance of the business cessation process.

If an enterprise has completely ceased activity and has no assets or liabilities, a tax clearance can be obtained and request made to the Registrar of Companies for a simple strike-off.

Deferral of Exit Tax

The deferral of exit tax levied on companies ceasing to be tax resident in Ireland is available for companies migrating to an EU or EEA Member State beginning 1 January 2014. Under section 628A of the Taxes Consolidation Act 1997, companies migrating to an EU/EEA Member State have the option to defer its exit tax charge by either paying the tax in equal installments over six years, or deferring payment entirely for up to ten years (or until the asset is subsequently disposed of, if sooner).

A migrating company that wishes to defer its exit tax charge is required to select the preferred option in its final tax return. Interest will be charged on the deferred exit tax and Irish Revenue may require a migrating company to provide security to ensure payment, if deemed necessary.