Revenue eBrief No. 156/22
04 August 2022
Guidance on the Interest Limitation Rule
Tax and Duty Manual (TDM) Part 35D-01-01 was created in July 2022. It provides guidance on the Interest Limitation Rule ("ILR") following the transposition of Council Directive (EU) 2016/1164 of 12 July 2016, as amended by Council Directive (EU) 2017/952 of 29 May 2017 ("ATAD"), which lays down rules against tax avoidance practices that directly affect the functioning of the internal market.
The ILR applies to accounting period commencing on or after 1 January 2022 for all corporate taxpayers. A group of Irish companies may, where certain conditions are met, be treated as a single taxpayer when calculating the impact of the restriction.
Where the restriction applies, it operates by deferring the deductibility of interest from the accounting period in which the restriction applies to future accounting periods in which there are sufficient earnings to allow an interest deduction.