Ireland's Implementation Of Interest Limitation – Impact For Securitisation Regime

As expected, Ireland has published the draft legislation on the interest limitation rule in the Finance Bill 2021 (the "Finance Bill") as required by the Anti-Tax Avoidance Directive ("ATAD").

The interest limitation rule ("ILR") will limit the net interest deductions of a company within the charge to Irish corporation tax to 30% of EBITDA in a given period in certain circumstances.  The ILR will apply to accounting periods commencing on or after 1 January 2022.

Ireland has an effective securitisation regime that permits a qualifying Irish resident SPV ("Section 110 Company") to engage in an extensive range of financial and leasing transactions in a tax neutral manner as set out in more detail in the attached Appendix.