Financial Services Ireland

Tax Alert: Securitisation Entities

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Tax Alert: Securitisation Entities

Update to the Tax notification requirements for Section 110 securitisation entities

The Finance Act 2016 introduced changes to the way in which securitisation entities are required to notify Irish Revenue of their intention to be qualifying companies under Section 110 of the Taxes Consolidation Act 1997 (‘TCA 1997’).

Background

Revenue recently released the new form which is to be used when notifying Revenue of a company’s intention to be a qualifying company. Revenue also issued an eBrief which clarifies the deadline by which the new form is to be submitted (details below). Completing this form correctly and on-time is one of the conditions in section 110 TCA 1997 and failure to do this can result in adverse Irish tax consequences.

In addition to issuing the new form, called Form S.110, Revenue also released a withdrawal form, Form S.110W (Withdrawal of notification that a company is a ‘qualifying company’ for the purposes of Section 110 TCA 1997).  This should be submitted once a company no longer qualifies as a qualifying company or if a company chooses to withdraw its previously filed Form S.110 notification and, thus, no longer be taxed as a qualifying company.

Deadlines

New Notification Procedure Deadline

The Form S.110 must be filed with Revenue within 8 weeks of:

  • the ‘qualifying company’ meeting the requirements of paragraph (e) of the definition of a ‘qualifying company’, i.e. acquiring €10,000,000 worth of qualifying assets.

In respect of a qualifying company who met the requirements of paragraph (e) of the definition of a qualifying company before 1 January 2017 and who had not submitted a Form S.110 to Revenue before that date, the Form S.110 must now be returned within 8 weeks of 23 February 2017 (i.e. by 20 April 2017).

As Revenue has now released the new Form S.110, any company that had filed a previous version of the Form S.110 between 1 January 2017 and 23 February 2017, must now provide any additional information required, as stipulated by the new form. In this case, a company should submit the new form to Revenue within 8 weeks of 23 February 2017 (i.e. by 20 April 2017). Failure to provide this information within this timeframe will result in the company ceasing to be a qualifying company from 23 February 2017.

Anomaly

Companies who had not met the ‘€10,000,000 requirement’ in 2016 but had filed the old version of the Form S.110 in 2016 should please contact us for further guidance.

Withdrawal of a Notification

A company that either:

  • no longer satisfies the criteria of a qualifying company; or
  • wishes to withdraw the original qualifying company notification

should submit a Form S.110W to Revenue within 8 weeks of the date the company has or wishes to cease to be a qualifying company for the purposes of section 110 TCA 1997.

This is a non-statutory form and it is not clear what, if any, penalties will be imposed by Revenue should a company choose not to file it. However, we understand that Revenue decided to issue the Form S.110W as a result of calls from the Industry to make the ‘opt out’ process more straightforward.  It is also to make it clear to Revenue when a company no longer qualifies or wishes to qualify under the S110 regime.

What should you do now?

  • Companies who had not met the ‘€10,000,000 requirement’ in 2016 but had filed the old version of the Form S.110 in 2016 contact us for further guidance.
  • Submit a new Form S.110 for any new securitisation companies that have been set up and have not submitted the required form.
  • For any Form S.110 submissions since 1 January 2017 review the new Form S.110 for any additional information that is required and re-submit the new Form S.110 within 8 weeks of 23 February 2017.
  • Control processes should be implemented to ensure all new securitisation companies satisfy the new reporting requirements.
  • Be mindful of the withdrawal process now required for a securitisation company wishing to cease to be a ‘qualifying company’ in accordance with section 110 TCA 1997.

Anne Tobin

Securitisation Solution Leader
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