Irish Revenue issued new guidance on 1 July 2019 setting out the rules for companies in calculating their taxable profits, gains or losses for the purposes of Case I or II of Schedule D. Case I or II of Schedule D deals with the profits of the company’s trade or profession which are assessable to tax.
- Requirements in preparing financial statements/ accounts
The new Tax and Duty manual provides an overview of how Irish incorporated companies are subject to both the requirements of Irish company law and their accounting framework in preparing their financial statements/ accounts.
- Methodology for computing Case I or II profits or gains or losses
The new Tax and Duty manual looks at the five subsections in Section 76A of the Taxes Consolidation Act, 1997 (TCA) as amended by Finance Act 2017 which set out the methodology for computing a company’s Case I or II profits or gains or losses. A summary is set out below.
Subsections 3, 4 and 5 were inserted by the Finance Act 2017 which expanded the section from one to three pages from when first introduced by the Finance Act 2005. Except for the Notes to Guidance released in 2018 this Tax and Duty Manual is the first guidance Irish Revenue have released in relation to the Finance Act 1997 insertions.