Home About Us Services Tax Booklet 2011 International Services Useful Links Contact Us                      Be part of Ireland's Smart Economy Advantages of locating in Ireland        Latest Economic Commentary Budget 2012 An Assessment        Starting your own Business? Tax Exemption for Start-Up Companies        Useful Resources: Key Tax Planning Dates for 2012 Tax Planning Tips for 2012                               Special Purpose Vehicles for Financial Transactions        Favourable Tax Treatment          Ireland is a popular location for basing special purpose vehicles (‘SPVs’) for use in various financial transactions such as securitisation and acquisitions of distressed assets, regardless of where in the world the assets are located. This is due to the reasons already set out above, such as Ireland having a vast network of tax treaties allowing for income and profits to be repatriated easily, and a stable ‘onshore’ regime reinforced by long term EU membership. Ireland also provides special tax treatment for SPVs set up to acquire certain types of assets, including shares, bonds and other securities, derivatives and similar instruments, lease portfolios, reinsurance contracts and other investment assets.          As noted above, investment companies in Ireland are charged corporation tax at the investment rate of (25%), as opposed to the lower trading rate (12.5%) and while qualifying SPVs must pay the 25% rate, they are permitted to calculate their corporation tax as a trading company rather than an investment company.        Interest Payments and Repatriation of Profits        Due to the large number of double tax treaties which Ireland has emerged into, generally most income and profits from Irish SPVs can be distributed tax free. In most instances where interest is paid by a qualifying SPV to an EU or treaty country there will no withholding tax in Ireland, no Irish income tax for the payee, and a full corporation tax deduction for the SPV. Furthermore, there will not be withholding tax on any dividends payable to EU or treaty countries and the operations of such SPVs are exempt from value added tax.        Qualifying SPVs        SPVs must satisfy a number of requirements in order to qualify for the favourable tax treatment outlined above. The SPV must be resident in Ireland, it must carry on business involving the management of ‘qualifying assets’ (and no other activities) and the market value of all qualifying assets that a company acquires on its first day must not be less that €10 million (although this level does not have to be maintained). There is also a requirement that the company must notify the Irish Revenue Commissioners that it is trading in the prescribed form, however, Revenue approval is not required.               If you require more information in relation to this matter please email or call us on +353 1 6120580 today.                                                          Byrne & McCall, Core B, Block 71, The Plaza, Park West, Dublin 12, Ireland   Tel: +353-1-6120580   Fax:+353-1- 6205625   Email: info@byrnemccall.ie Privacy Policy          powered by go2web