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The crux of this tax appeal concerned whether an EU company was within the charge to Irish capital gains tax on the disposal of shares in an Irish company. A non-Irish company is only within the charge to CGT on the sale of shares if the shares sold derive their value, or the greater part of their value, directly or indirectly from “land in the State”.
ForeignCo, an EU incorporated and tax resident company, entered into a contract for the sale of shares in IrishCo, an Irish-resident company which designs, builds and operates toll booths on Irish motorways (Motorway) on behalf of the National Road Authority (NRA).
One of the completion deliverables included in the sale contract was that ForeignCo had to provide a CGT clearance certificate (Form CG50A) or a letter from Revenue confirming that a Form CG50A was not required concerning the sale of the shares. Prior to completion, Revenue contended that ForeignCo’s proposed disposal of the IrishCo shares would be subject to CGT. IrishCo’s shares were sold and Revenue assessed ForeignCo to CGT on the chargeable gain.
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