Ireland’s Taxes Consolidation Act contains general anti-avoidance rules (GAAR). Under the rules the Irish tax authorities are empowered to disallow any tax advantage arising as a result of arrangements or transactions that are deemed to have the purpose of avoiding or reducing tax, or to create an artificial tax deduction.

The rules are not typically applied to commercially justifiable arrangements and transactions with incidental tax avoidance effects, as long as they are made with a view to the realization of profits and not primarily to provide a tax advantage. Any arrangement or transaction made in order to gain benefit of any relief, credits, allowances, etc. provided for under Irish tax legislation will not be consider avoidant as long as such provisions are not misused.

In cases where deliberate tax avoidance is found to exist, disallowance will occur and additional surcharges and interest on tax due may be applied. If an enterprise believes a particular transaction may be deemed tax avoidant in nature, they may make notification to the Irish tax authorities within 90 days of beginning the transaction. This will not remove the possibility of the GAAR being implemented, but will generally protect the enterprise from addition surcharges and interest if the transaction is deemed avoidant and adjustment made.